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Fresh doubts cast over Boyd deal

10 Nov 2016

Fresh doubts cast over Boyd deal Image

By Sean Car

Just over a month after the City of Melbourne secured a new commercial contract for the redevelopment of the Boyd site, fresh controversy has emerged surrounding the developer’s finances.

After tearing up its original contract with developer Mackie in May, the City of Melbourne announced in September that it had entered into a new agreement with developer Cairo Melbourne Pty Ltd.

Like the previous agreement, the joint venture includes plans for a residential apartment complex comprising affordable housing and retail space, but with a fractionally larger piece of public open space.

However, many locals will be surprised to learn that Cairo is, in fact, Mackie.  

While council had allocated an additional $200,000 in its recent budget for marketing and legal fees to secure a new development partner, it has re-entered business with the same developer that failed to uphold its original contract.

The new revelations have emerged about the Boyd redevelopment project in the wake of the resignation of Family First senator Bob Day.

Senator Day was recently forced to resign from Federal Parliament after declaring bankruptcy in the wake of the collapse of his property business Home Australia.

In a recent interview with the Australian Financial Review’s Phillip Coorey, Senator Day said he had signed a contract to sell a 75 per cent stake in his company to Goshen Capital Resources – a company based in the Philippines.

Senator Day attributes his bankruptcy to this deal after Goshen allegedly presented him with fraudulent financial documents, which ultimately forced his company into liquidation.

He went on to claim that the offshore financer was tied up in a number of other Melbourne-based deals, one of which was Mackie’s and, now Cairo’s, Regent Square project at the Boyd site in Southbank.  

Cairo Melbourne Pty Ltd director Oliver Mackie did not respond to Southbank Local News when contacted for comment.

However, a consultant working for the developer said Cairo was seeking permission from the council before it could respond.

The City of Melbourne’s former finance chair Stephen Mayne was unaware of the developer’s connection with Goshen when contacted by Southbank Local News.

He said that while it was “highly unusual” for council to re-enter business with the same developer, council officers had been confidently assured that Cairo would “deliver the scheme as agreed”.

“The developer had to jump through a lot of hoops,” he said. “We were informed that Cairo had secured a new offshore financer.”

“We didn’t ask who it was. As councillors it’s not necessarily our business to know those sorts of things.”

“They’ve (Goshen) obviously been playing footsies with Bob Day as they have with Mackie but council has been confidently assured.”

Mr Mayne revealed that Cairo has agreed to increase its sale price by 50 per cent resulting in a new $15.5 million contract with the City of Melbourne.

Most of this windfall will go towards funding council’s deal for the Munro site as part of the redevelopment of the Queen Victoria Market.

“It’s important to get on with something,” Mr Mayne said. “The financials of the Munro deal were costly and this new agreement would help fund QVM and open space in Southbank at Boyd and Southbank Boulevard.”

Southbank Residents’ Association president Tony Penna said the news was very disappointing and predicted that the deal could fall over once again.

“The last thing we need is delay after delay as a result of the City of Melbourne entering into another agreement with a developer that may not come to fruition due to a lack of finances,” he said.  

“This will only serve to further agitate the community as we are forced to endure repeated setbacks while waiting for a measly patch of open space.”

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