It's a strange one. (And here's another long one)
My opinion is that the development should go ahead, but under the existing planning regs, eg 3 levels above ground. At the price Makris paid for the site, by my rough estimates a residential development with a retail component on O'Connell St would offer a reasonable return.
Is it the old story of buying land then using your muscle to have it rezoned so you can develop it more extensively and take a profit far in excess of what would be expected considering the purchase price?
You have to wonder about this odd 'approval' process, with Adelaide City Council agreeing to spend $50k of ratepayers money consulting the public on a project for which there has been no development application. Does it set an expensive precedent? Will Council consult the whole of North Adelaide on my behalf if I bought an allotment there and wanted to develop it an extra 100% or so outside the limits of the planning regulations?
North Adelaide residents are being actively lobbied by pr experts Makris has employed Premier Rann's former head spin doctor as well as a bevy of planning lawyers and consultants such as QED, in addition to his own in-house architects Ignite. Local residents who object not to the idea of redevelopment but to the height, scale and likely impact of this development are being characterised by the Makris group as NIMBY's, anti-progressive etc. (ref Makris brochures, media statements etc).
Again, my information from folks up on the hill (my mate calls it North Air Delight) is that they are very keen to see a development, just not a seven level one creating such large traffic flows.
Here are a few points:
The proposal as far as can be made out from Makris' PR includes a 7 star hotel.
The international hotels association recognises up to five stars, and a few hotels describe themselves as six stars. Only one hotel in the world the Burj al-Arab hotel in Dubai calls itself a 7 star establishment. Have a look at
for pics and
for other info
You have to wonder how Makris' hotel in O'Connell St is going to measure up to a place like that. Round the clock English butlers, on call current model Rolls Royces, helicopter pad, 18th floor gymnasium, 8 restaurants including one only accessible by submarine, laptop, printer copier fax etc in each suite - published daily rates from AUD2000 for a single bedroom to AUD4150 for a twin. Pretty competitive for Adelaide.
There is a 1000 seat auditorium and 5 cinemas, too. Hard to make money with those, I would have thought, in spite of having a few high end specialty shops and cafes to support them. There's no major 'anchor tenant'. The underground supermarket is not overly large as supermarkets go, and wouldn't really qualify.
My thinking is that the proposal is a sort of 'ambit claim' containing a number of elements that can be sacrificed to give the appearance of a painful reduction in the scale etc of the development, right down to near unprofitability. Other city developers are past masters at this game. The idea is that after all the crocodile tears you end up still 40% over the planning limit and you go home very happy indeed. But if you ask for the 40% over straight off, you'll probably be told no.
But with Rundle Mall traders struggling, how would Adelaide City Council going to explain to their commercial backers their approval what is clearly a regional shopping centre in North Adelaide?
Industry standards of floor area per resident suggest that the two supermarkets already operating in North Adelaide provide more than enough supermarket shopping for the locals. Casual visits to those two supermarkets at peak time suggest that the checkouts are not over stressed.
A few words about retail in Adelaide (I stand to be corrected if anyone can update my figures):
Rundle Mall gets only about 20% of the metro retail spend. Westfield centres get most of the rest. Marion alone picks up about 30% of the total metro retail spend. Westfield (and its successors at Arndale) have neatly triangulated the CBD with TTP, Arndale, and Marion so that the majority of metro dwellers have to actually drive past a Westfield to get to the CBD. So the traditional strip of Rundle Mall needs all the help it can get.
88 O'Connell seems planned to suck customers from the gentrifying inner suburbs from say, Croydon around to Hampstead Gardens. That's a crucial and growing market for Rundle Mall. I don't think the city traders will be pleased.
As for the notoriously tetchy North Adelaide residents, I'd say most of them would love to see the eyesore Le Cornu site developed.
As an aside, though North Adelaide is desperately short of parking, ACC will not allow the vacant site of 17 years standing to be used as an open air carpark, even landscaped. Two reasons - zoning, and public risk (tripping, assault etc). Who will pay the insurance premiums for that risk?
Anyway, the present planning allows three levels above ground on the site. The price Makris paid for the site reflected that three level potential. To have the zoning changed to allow 7 levels after the sale will not only make the previous owner spit chips, it is very poor planning practice.
And what about the supermarket across the road, which Makris owns? The tenants there have been told nothing. Perhaps the scheme closely involves redevelopment that site. Not so much is being said about its future. The traders there are all on monthly tenancies, but have not been offered anything across the road (so they say), where we are told Gucci, Versace etc will be the tenants. The big names international names couldn't sustain such shops in the fashion mecca of Melbourne - how are they going to survive here? Maybe the $4000 per night customers of the 7 star hotel will patronise them.
The question is, what is behind all this? Is it ego tripping on the part of Makris? Or does he think that this elaborate performance will swing the public and the council and allow him to make a super-profit on a site that he bought with the potential of only three levels?
Good information is hard to get. Makris' architects, Ignite, are an in-house operation. Everything else is top secret and what information there is is heavily massaged by QED and the other spinners on the Makris payroll.
What is wrong with a primarily residential three level development with a solid retail component on O'Connell St,plus some much needed parking. History suggests that the residential component would sell like hot cakes. Good retail in North Adelaide lets well too at the right rents.
Can Makris expect ACC to approve a development that requires heavy delivery trucks and garbage removal trucks for an underground supermarket and Australia's most prestigious international hotel to be loading and unloading after hours in a primarily residential area, sharing by the way the hotel's passenger setdown and main entrance, which is to be situated off a skinny little side street (Centenary Street)?
What about the 700-1000 cars from the proposed auditorium and cinema complex which will overfill the onsite parking (already shared by the hotel, the private apartments, customers for the supermarket, shops, restaurants etc and maybe staff as well) onto the street within relatively short time spans?
With respect, the argument that the 30 year old apartments at 13 Brougham Place and the 40 year old Hotel Adelaide, now well outside the Development Act height limits, are a good precedent is specious. It's like deliberately speeding then saying 'But many years ago there was no speed limit on this road, officer.'
It's a strange one, as I said. Makris seems to be aiming for something, but what?