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OPINION: Another setback for the Empire Hotel site

TWO years after it bought the Empire Hotel site in Hunter Street for $2.8 million to build a high-rise tower with a component of “affordable housing”,the Maitland-Newcastle diocese of the Catholic Church has thrown in the towel, selling the site for a hefty $8.3 million, pocketing, on paper, a handy profit of $5.5 million in the process.
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The sale has not endeared the church to the Hunter Development Corporation –which sold it the land –or to some on Newcastle City Council, with Deputy Lord Mayor Declan Clausen attacking the diocese for taking an “outrageous” profit and leaving the site “empty and boarded”.

For its part, the church has pointed to a combination of difficulties that it says combined to kill the project, some of which are directly related to the promised“affordable housing”.

This is important because governments, fearing that everyday workers are being priced out of city centres, have offered variousincentives to organisations providing officially defined “affordable housing”.

The church says that in the past few years it has successfully provided 74 affordable housing dwellings in suburban Hunter region surroundings, but that the state of the Newcastle CBD property market is such that the high-rise tower it was planning for the Empire site could not be built as a feasible economic proposition.

Having struggled to attract builder interest to the site, the church says it wasrushed with offers as soon as developers learned the land was for sale.

A few things are at play here. To start with, the Newcastle CBD property market has risendramatically in the past few years.

But more importantly, there is nothing obliging the new owner to buildaffordable housing. Yes, the approved tower has been granted some concessions on the basis of anaffordable housing component, but Bloc will likely negotiate a slightly altered DA, and finance the project based on higher sales prices than would have beenthe case with more thanhalf the building dedicated to affordable housing.

Hopefully, this will mean a building on this long-troubled site, sooner rather than later. As far as the finger pointing between the church, the council and HDC are concerned, only those involved will know the true state of those negotiations.

Either way, the church’s failure must inevitably put more pressure on HDC to succeed with its own affordable housing proposal on the rail corridor at Merewether Street.

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