Shopping centres await resolution
A COURT action involving Rose City Shoppingworld and more than 200 other shopping centres in Queensland fighting State Government land valuations could be months away from resolution.
The massive case follows the round of valuations released in June 2007 which had the Warwick centre’s unimproved capital value (UCV) soar from $2 million to $14m.
Councils use UCVs to calculate rates, with a recent State Government move ensuring that even if the centres have a win in court and their UCVs are reduced, councils will not be forced to pay back the extra rates collected since 2007.
Had the government not opted to amend the Land Act, councils across Queensland, including the Southern Downs Regional Council, would have been forced to pay back up to $600 million collectively in rates, causing a budget black hole.
But the shopping centres remain determined to have their valuations and rates reduced, in line with an earlier court ruling on the Gold Coast’s Pacific Fair Centre.
In the Pacific Fair action, seen as a test case for other centres, the Court of Appeal reduced its valuation from $180m to $47.49m.
A spokeswoman for the Land Court said the Rose City matter, and the others included with it, had been the subject of a “directions hearing” last week, in which preliminary legal arguments were heard. No date has yet been set for a further hearing but it is understood this may not happen until the new financial year.
The government has also moved to introduce a new method of calculating land valuations in the 2011-2012 financial year, which would involve including an estimated value of structures on land to produce a figure closer to market value.
While the “site valuation” method will include a goodwill value for commercial property – seen by councils – rural property will continue to be subject to the unimproved method.
Mayor Ron Bellingham said yesterday he and his fellow councillors were “still grappling” with the proposed reforms but stressed the need for equity in any valuation method used.
“The problems with the shopping centre valuations were the State Government’s own doing – they did them internally and as a desktop exercise, instead of getting valuers to inspect centres on the ground,” Cr Bellingham said.
“While the site valuation system is complex and I cannot see how you can accurately estimate business goodwill, we welcome the State Government’s recent decision not to require councils to pay back revenue if shopping centre values are reduced.”
Rose City Shoppingworld owner Robert McConaghy yesterday declined to comment on the Land Court action.
For more information on the valuation reforms visit the Property Council of Australia website at www.propertyoz.com.au