Bold Metro Tunnel compensation bid

By Shane Scanlan

In an apparent audacious bid to boost compensation, the owners of a Swanston St property earmarked for compulsory acquisition have applied for permission to add seven storeys.

The owners of the KFC building at 27-29 Swanston St in October lodged a planning application with the City of Melbourne for 14 apartments above the three-storey building.

The Melbourne Metro Rail Authority (MMRA) in October 2015 made it known that the building was among those it was looking to acquire to build the CBD South Station.

The planning application comprises little more than architectural drawings, with the council still seeking essential details before it can properly assess the bid.

The council has advised the owners to speak with the MMRA.  It originally said the bid would lapse if the missing details were not provided by January 24.  It has now granted an extension until mid-April.

The planning application to the City of Melbourne estimates the cost of the planned works at $12 million and it was accompanied by a cheque for $8189.80 from real estate agents Allard Shelton to cover the permit fee.

The owners are seeking council permission to build the extra seven floors, construct two apartments per floor and connect each of them direct into the heritage-protected Nicholas Building, which they also own.

In the process, all south-facing windows in the Nicholas Building would be lost.

The owners are also currently conducting an aggressive Allard Shelton drive to convert month-to-month tenants within the Nicholas Building to long-term leases.

The building is owned by a consortium of four companies, with the planning application being lodged by Myrgo Pty Ltd, a company led by the Cohen family.

Myrgo Pty Ltd directors are: Trevor Cohen, Norman Kotzman, Natalie Kotzman, Heather Cohen, Tania Smorgon and Hannah Cohen.

The Cohens in 2014 bought the Block Arcade and soon lost many long-term tenants after a regime of Allard Shelton-led rent increases.

The other companies in the consortium are: Dymbro Nominees Pty Ltd, Adele Pty Ltd and Lynnlea Nominees Pty Ltd.  Directorships include: Robert Davis, Myrna Goldsmith, Rohan Davis, Yvonne Fink, Bruce Davis, Rosalie Silverstein, Delysia Pahoff, Neville Southwick, Marilyn Faiman, Lea Woolf and Rose Samuel.

Myrgo Pty Ltd declined to answer CBD News’s questioning of its motivation behind the planning application.

The three-story 27-29 Swanston St is known as the Nicholas Building’s annexe and shares a basement.  Melbourne Heritage Action argued last year to the planning panel assessing the environmental impacts of the Metro Tunnel project that it should be spared because of its architecturally distinctive design and association with architect Harry Norris.

The Nicholas Building itself also argued for the retention of the annexe, saying this would protect the Nicholas Building’s south-facing windows, as well as maintain its commercial viability.

In its November 21 report, the planning panel agreed, saying: “The committee agrees that it would be preferable to retain 27-29 Swanston St above basement level because of its design and relationship with the Nicholas Building.”

Allard Shelton was registered to make a submission to the planning panel but failed to do so.

The MMRA on February 3 sent formal notices of “intention to acquire” to the owners of six buildings in CBD South (including 27-29 Swanston St) and a further six around CBD North. The authority has said it intends to own most of the properties by the end of this year.

Under the Land Acquisition and Compensation Act 1986, compensation is based on the value of properties at the time of acquisition.  In an information sheet prepared by the MMRA in 2015, the authority said: “Compensation recognises the value of improvements and renovations that add value to your property.”

Owners and representatives of some other affected CBD South property owners argued against compulsory acquisition.

Owners of the Commonwealth Bank building and McDonalds objected to compulsory acquisition.  CBA building owner Oscard Pty Ltd suggested it could be offered to the MMRA through a licence for temporary operation then redeveloped into a 9-10 storey tower after the station was completed.

Similarly McDonalds wanted to retain its store and provide strata access below ground. Michelle Blackburn for McDonalds Australia told the hearing that the store was a family-run business and the most profitable McDonalds in the CBD.

Young & Jackson’s, which is adjacent to the site but excluded from the project area, made a submission about access and the delivery of kegs.

Ms Michelle Quigley for the MMRA rejected submissions by McDonalds and the CBA building in Swanston St against being compulsorily acquired.

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