Redland Investment Corporation to be reviewed

The Council will review its property company, the Redland Investment Corporation (Item 7).

Redland City Council decided to undertake a review of its property company (the Redland Investment Corporation) at the general meeting held yesterday.

The findings of this review, will be made available to councillors during the second quarter of 2020 – after the local government elections on 28 March 2020, but before the newly elected council approves its first budget in June 2020.

The review will be overseen by Council CEO Andrew Chesterman. He is now tasked with preparing a report to the next Council about the options for the future operations of the Redland Investment Corporation.

In response to a question from Cr Murray Elliott, Mayor Williams confirmed that the CEO’s review scope would include the option of Redland City Council not having a property company.

Why has it taken so long?

In January 2019 Redland City Council was asked to wind up the Redland Investment Corporation, in a petition signed by about 260 Redlands residents. The petition said this should be done urgently, in order to:

Improve governance of Council’s real estate and property related transactions
Demonstrate full accountability in management of public land and assets; and
Reduce the risk of corruption within Redland City Council.

The petition was initiated by Redlands2030 after the Crime and Corruption Commision (CCC) released a report in August 2018 about corruption risks in local councils. In its Operation Windage report the CCC expressed concern about private companies being controlled by local government, saying (on page 25):

“Private companies established by local governments can create corruption risks through a lack of oversight and transparency in expenditure and decision-making. They can contribute to the misuse of power and public funds for the personal benefit of councillors and their close associates. ”

Councillors ignored the petition, and presumably took no notice of the CCC’s report.

Redland Investment Corporation makes a loss in 2018/19

A loss of $555,468 was posted by Redland Investment Corporation for the 2018/19 financial year.

When this disappointing result was discussed at the Council meeting on 9 October, some councillors raised concerns about the corporation’s future. The discussion can be viewed on the Council’s webcast video, starting at 58 minutes. Questions could reasonably be asked as to which councillors actually understood what they were discussing.

Redland Investment Corporation’s 2018/19 Annual Report can viewed in item 13.3 of the Council’s 9 October meeting minutes.

Annual reports for earlier years can be accessed via the Council’s website.

Secret beginnings for Redland Investment Corporation

In November 2014, Redland City Council decided in closed session to set up a private company to do property deals.The initial plan, hatched behind the community’s back, included sale of many neighbourhood parks.

When this became known many months later, the community was outraged. With an election coming up, the Council backflipped and neigbourhood parks were taken away from Redland Investment Corporation.

After 2016, the community expected better governance

Many expected the current Council, elected in March 2016, to improve Redland City Council’s governance. Instead, car parks used by the public have been privatised with little transparency by the Council acting through its property company.

Land sold by Redland City Council at Wynyard Street in Cleveland

A Council owned car park at Wynyard Street in Cleveland was sold to L.H. Hooker in 2016. When the site is eventually redeveloped, a number of all day car parks will be lost to train commuters and others who need to park for more than three hours in Cleveland.

A deal involving the sale of another Council owned car park, at Doig Street in Cleveland, was announced in July 2018. The site will be used for development of a five story aged care facility.

Redland Investment Corporation and its subsidiary companies are heavily involved in secretive plans for development at Toondah Harbour, and the controversial development of a large car park on flood-prone land at Weinam Creek.

We don’t need the Redland Investment Corporation

There’s no need for Council to do property deals through a private company, except to avoid public scrutiny. Private companies are not subject to Right to Information Laws and can’t be investigated by the Crime and Corruption Commission.

3 Comments

Ted Fensom, Nov 12, 2019

Should not the Queensland Auditor General be given a wider brief from local politicians and examine The Toondah Deal and the Redland Investment Corporation ?

Dr Dennis Tafe, Oct 25, 2019

Anyone who attended the evening public address by CCC Chair Alan MacSporran QC in August 2018 at seminar rooms adjacent to Indigiscapes, Capalaba, would have noted the red flag he waved in relation to councils that set up non transparent investment corporations on the side. Four councillors from Redland City Council (RCC) attended that eye opening address by Alan MacSporran so they probably relayed those CCC concerns onto the Mayor and other councillors. Yet over a year later the Redlands Investment Corporation is still operating behind closed doors in association with RCC. Some past atrocious decisions have been made, not only losing money ($555,000) but also against the welfare of the residents. Surely RCC realises that parking is inadequate for people who commute to the city during the day. So why would they sell off one car park to LJ Hooker and sell another in Doig Street Cleveland CBD for development of a 5-storey aged care facility ?? It makes no sense for a council that is supposed to be working in the best interests of the residents who elect them. These revelations are probably just as shocking for some of the councillors as they are for us, yet it continues.

Toni, Oct 25, 2019

Can’t believe the Council can justify RIC draining public money. The few blocks of land Council sold some without going to tender or public sale were managed by this development company. RIC Operational budget costs the ratepayers $1m a year. If the council’s land was sold by local real estate agent the commission would have been about $600,000 so for 6 years at $1million a year equal $6m compared with $600,000 that would have been paid to local agents, that alone should trigger some accountability to Council. So the community would like to know what this department has done for 6 years

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