Rural Land in Town with a Future

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When I first saw this property, which was introduced by a most unusual source, I saw huge potential. Well, who wouldn’t? It was almost 24 acres, it had a 300m frontage to the Maroochy River, plus its northern neighbour was a caravan park located in the middle of a growing coastal village with adjacent local shops (now a large chain supermarket complex). It was also just 10 mins from the main CBD. The best part though was the price: sub $200k. There were catches though. Being waterfront, it had mangroves, a good portion of it flooded, and the mosquitos would carry away a small child in summer. I felt only something good could come from owning such a large well-located piece of land, but how could I get the money to buy it? It was during a flat spell of surf where I was swimming the Cotton Tree pool, mesmerised by the black line when I had the idea. Design a home for the property, obtain a price to build it, and approach the bank as if it was a house and land package (on steroids). With rental income and the tax benefits from negative gearing it was almost cash flow neutral from the start. Phase two was to hold while the CBD grew out to us where I would work out how to capitalise on this wonderful piece of Australia. Total project cost at this stage was about $320k.

In 2006/2007 with the river front ‘home’ now valued at >$800k and the market in full boom, land supply was tightening. I engaged a team of consultants (engineer, town planner, environmental, traffic etc.) where we came up with a 20-lot subdivision proposal well above the high-water mark. Our hurdle was that the land was still zoned as ‘sustainable cane land’ and so under town planning rules, it was deemed not ready for this type of development. The problem with that was there was too much salinity in the soil from the river, and so an agricultural consultant confirmed you could not grow sugar cane on this land, and hence, why no one had for over 20 years.

As such, we had land zoned sustainable cane land that was, well, unsustainable. Our application to council explained this along with the fact that all of our lots were above the various high-water marks in the council codes, and it was fully located inside of the council sewer mains that ran right through our property. To really sweeten the proposal, we proposed to donate almost half the site – around four hectares – of the most river front part to the council (community). This would strategically link a council owned property to the south with land similarly designated to the north, which itself was bordered by an environmental park allowing a river side boardwalk to be constructed.

Perfect, right? No! Not perfect in the eyes of the political local government town planning process. First, the town planning department told us off-record that they loved it and would approve it if it was up to them, but their directions were to recommend refusal for anything against the current land use. 
This left us with the local councillors. You see, 12 councillors had a vote each and the mayor would have a tie-breaker vote if needed. As such, we personally spoke to a number of the councillors, including the mayor to explain the logic. Most agreed.

Vote time. Three of the councillors who supported us didn’t attend the vote; the result 4-5 to the negative and the mayor a raving fan prior who was one of the non-attendees. As a final bout of justice on this day, another application for a large subdivision (50+ lots) just one street away also on land zoned sustainable cane land was approved. I was dumb out of luck. 

The shame of this was not only that I estimated the subdivision would have netted a profit of around $1 million on top of the growth the property had already experienced, but also, it now sits there overgrown and unused when foreshore access could have been opened up right along that section of the river. That profit may have also helped the subsequent headwinds of the GFC and divorce which meant the site had to be sold, learning in action.