Carbrook’s “mini city” lacks a business case

Location of the proposed Carbrook property development

The proposed Carbrook ‘mini city’ located on the Logan River flood plain

An application for development of a 1,500 unit riverside ‘mini city’ at Carbrook will soon be considered by the Logan City Council.

Local residents have raised significant concerns about the environmental, social and ecological impacts of the development as well as the inadequate consultation process.

But what about the business case? The developer’s business case lacks plausibility and the public business case involves at risk infrastructure investment by Logan City Council with no certainty that the community would benefit.

Local resident David Keogh has written to Logan City councillors expressing his concerns about the proposed development and its lack of a business case. His letter is published below.

Where’s the business case for a Carbrook mini city?

During the 1980s and into the early 1990s I undertook many studies into the financial feasibility of tourism resorts in Australia. I previously worked in the planning and management of resorts in the UK. Many of the developments on which I consulted were ultimately successful, but many failed or did not get off the drawing board. Some of the projects that I worked on included Sanctuary Cove, Sea World and Hamilton Island. Consequently I believe that I am qualified to offer an opinion on the proposed resort development at Riedel Road, Carbrook.

Flawed business model

In my view, the proposed resort development is unlikely to stack up as a viable business proposition. Developments of this type and scale have a chequered history not only here in Australia but in the USA and elsewhere. Where they do succeed often follows a failed initial development, which is picked up by a subsequent developer at a significantly discounted capital cost. Examples in Australia include Sanctuary Cove and Hamilton Island both of which had their gestation via financial failure of the initial developers.

Lacks tourism potential

A key element to be successful such developments have to be located in already established tourism locations. Carbrook is hardly a place that features on anyone’s bucket list! Furthermore, although pitched to overseas tourists, to be successful the business model must be underpinned by a vibrant domestic market. Overseas tourists are fickle, being influenced by numerous factors: currency exchange rates, air fares, fashionable trends, competitive tourist developments, etc. Unless there is a strong demand from Australian tourists, a development of the scale as proposed will inevitably fail.

Although the proposed development will be staged, for it to succeed there needs to be other local tourist attractions to provide a diversity and attraction to potential tourists. Concentration of tourism facilities and services in specified tourist zones allows the efficient provision of infrastructure and complementary services and allow integration with transport services. Even if located in an established tourism area, e.g. Gold Coast, Whitsundays, the proposed project would most likely still struggle, particularly in the early years of development.

Infrastructure not available

Available infrastructure is totally inadequate for this development. The Beenleigh-Redland Bay Road is ready at capacity at peak times and would need substantial upgrading but this begs the question who will fund this? Mains water and sewer are each in excess of 5 kilometres away and the cost of extending the existing facilities would leave the ratepayer with an out of sequence cost, if the proposed development should fail.

Community consultation was poor

A significant factor in the success of established resorts is their local community engagement. Developments which are gated and provide a perception of exclusivity tend not to do as well as those resorts which engage positively with the local community. To date there has been little community consultation with a large number of locals objecting to the proposal.

Environmental protection

Another factor is measuring the success of resort developments is their commitment to protect local ecosystems. Inevitably with a large scale development substantial environmental damage is done particularly at the construction stage. Many successful developments have managed to achieve some degree of balance between environment protection and the resort development. At the intended site this will be exceedingly difficult to achieve as the proposed development is located in a flood plain and abutting a river with mangrove vegetation.

In summary

The proposed 1,500 unit ‘mini city’ development at Carbrook is very high risk both for the developer but also (more importantly) the Logan City Council, and its ratepayers.

It would require significant development and working capital, and would seem to have a poor prospects of success, given the lack of a strong business case, in a location with no supporting tourism infrastructure or services.

 David Keogh

Have your say about the Carbrook ‘mini city’

The Carbrook resort development application (MCUI-25 / 2016) was discussed by Redlands2030 in the story Logan River tourism units sidestep regional plan published in November 2016.

Redlands2030 understands that this development application will be considered in Committee on Tuesday 14 February with a final decision to follow soon afterwards.

If you are concerned about the proposed development, or the way in which it is being assessed, you can have your say to Logan City’s Mayor and Councillors:

  1. Email the councillors this open letter direct from this post (see symbol at top of the post)
  2. Print this open letter and post a copy to the councillors
  3. Phone the councillors and explain why you are concerned about this proposed development

You could also show your concern by attending Logan City Council meetings where this development application is being discussed.

Redlands2030 – 13 February 2017