Could church land be put to better use?

By Meg Hill

Divergent opinions are emerging about the management of church-owned land in the CBD.

Seven Christian churches in the CBD, and many more in the immediate surrounds, were built in the 1800s.

Church land acquisition costs in the 1800s were very low, sometimes non-existent. While there has been some pressure in recent years to undo the tax-exempt status of religious institutions, little has been said about land assets.

Zelman Ainsworth, a senior manager at CBRE, said the churches were sitting on “gold mine real estate”, and should consider commercialising some of their land in the city.

“Quite simply, there’s heaps of church real estate that’s not doing anything,” he said, while citing ongoing costs related to those sites – such as maintenance.

Mr Ainsworth highlighted a few examples of what he believed were “sustainable” decisions for the churches.

“Wesley Church has done a deal with Charter Hall, achieving huge wealth and longevity. It sets them up for the future,” he said.

The Wesley is a Uniting Church on Lonsdale St that made a $500 million redevelopment deal with investment and fund manager Charter Hall in 2016.

The deal, which secured a 34-floor office tower, has been controversial for reasons beyond the issue of commercialisation.

It involved demolishing the heritage-listed Princess Mary Club that had been used for accommodation for disadvantaged young women until 1970.

The Wesley instance highlights connected areas that can be negatively hit through church land commercialisation – the protection of heritage sites and the continuity of charity services.

Those implications, the tax exemption status and the low acquisition costs to begin with could suggest a different approach to Mr Ainsworth’s – that some church assets should be made public. The case could particularly be made for those that go through a long period essentially unused, and often deteriorating, like the Princess Mary Club.

“The leased Wesley Place redevelopment allows the restoration and rejuvenation of a heritage-listed church building and materially ensures its continued operation for the next 125 years while keeping the site church-owned,” a spokesperson for the Uniting Church said.

“Every property decision made by the Uniting Church in Australia is motivated by our Christian calling of worship, witness, and service to the community.”

Mr Ainsworth also highlighted St Michael’s Uniting Church on Collins St: “There was a deal about 30 years ago where an office tower called 120 Collins St was built on the land and they gave the church a long-term lease, and now the church doesn’t have financial stress.”

The total amount of church-owned land is hard to gauge. While Mr Ainsworth’s suggestions refer only to the land on which the church buildings sit, there are plenty of other assets under their control.

The Age reported in February that the Catholic Church alone owned 188 properties in the City of Melbourne, with a total value of $532 million.

A spokesperson for the Anglican Diocese of Melbourne, of which the St Paul’s Cathedral belongs, said: “The Anglican Diocese of Melbourne has not done any development of the type to which you refer, but we may do so in the future.”

The Melbourne Catholic Church did not respond to a request for comment.