Sunday, February 25, 2018

Canberra Times sleazes over Armidale and APVMA

Photo. Gordon Smith. Armidale Street Scene
One of side-effects from the Barnaby Joyce affair has been further blow-back on the proposed move of the Australian Pesticides and Veterinary Medicines Authority to Armidale. The Canberra Times has been running a constant campaign against the move. One can accept that. it's a local paper defending its patch. However, on 21 February it ran a piece Developers swoop on lucrative deal to house APVMA public servants in Armidale repeated in the Age that can only be classified as Canberra sleaze.

These may sound like strong and partisan words. After all, I am on record as supporting the move. Further my links with the city and my support for Northern Development are well known. I am not an objective observer. I suppose that I should note as well that worked in Canberra for twenty years living in Canberra and Queanbeyan, so I know the other side quite well.

To make my point, I will now repeat the whole piece interposed with comments and information. I leave it to you to decide whether or not my assessment is correct given my stated biases. .

The piece begins

The prospect of a new office block to house nearly 200 public servants in Armidale has developers fighting hard for a piece. Up to four sites are thought to have been short-listed for the lucrative build.

When the federal government called for bids to build and own a new headquarters for the Australian Pesticides and Veterinary Medicines Authority last year, local and interstate developers set their sights on the small town. Ten proposals were put forward.

Three sites and four development proposals were short-listed late last year. Among the frontrunners are sites with colourful histories in a town that has attracted more than its share of unwelcome headlines.

It's understood a preferred bidder is now in detailed negotiations as bosses race against an ambitious plan to have most of the authority's public servants working in the chosen office block by mid-2019. A decision is expected on the site by the end of February.


In a way, this opening sets the tone.

As I understand the tender, I haven't seen it, it involves developers putting forward proposals to construct the required office facilities and then to lease them to the APVMA. The Commonwealth is not paying the construction costs. While developers will no doubt build in a profit margin for costing purposes, their return will come from the consequent rental streams. I presume, and it is a presumption, that following completion they will sell the building to a super or other fund seeking a steady income stream.

Hopefully, and the report seems to imply that this is the case, there will be competition among developers, thus keeping costs down. One concern expressed earlier was that lack of competition would force the Commonwealth to meet the capital costs up front.

The project is being built in a "small town". For those who don't know Armidale, it is a university and education city on the New England Tablelands midway between Sydney and Brisbane with a population of about 23,000. It is also a place that has been through some tough times.The Dawkins reforms plus changes in boarding demand (the city is home to three boarding schools, down from five at its peak) cost the city a 1,000 jobs in the 1990s. The city went into free-fall and has only just fought its way back and above its previous population peak.

The project is a substantial one, but this needs to be kept in perspective. Current development projects just completed, under construction or about to begin construction include:

  • The $6 million TAFE Digital Hub, the headquarters for TAFE's digital service delivery  across NSW. Thanks to the hard work of Tony Windsor, the previous member for New England, Armidale became a first NBN test site. All the main city has fibre to the premises.
  • The redevelopment by the University of New England of its residential college system. The next phase of this has a reported price tag of around $21 million.
  • The $65 million construction of a Rural Medical Centre in the Hospital precinct to support doctor training.
  • The construction of a new High School at $65 million.
There are others. The only purpose of the list is to put the APVMA build into some perspective. It's big, but in proportion.

I will deal with the final sentence, "Among the frontrunners are sites with colourful histories in a town that has attracted more than its share of unwelcome headlines" a little later.

The piece continues

As Barnaby Joyce struggles through the crisis that has overtaken his political future, there could be pitfalls aplenty for the Canberra bureaucrats trying to give effect to his decision to move the veterinary medicines group to his home town of Armidale. In a small town (population 29,000), where new government buildings are an uncommon windfall and the small development community is coloured by remarkable tales, the choice is perhaps more fraught than most.

While no one in Armidale would name or officially confirm the short-listed bidders, there are limited options and few secrets. Among sites believed to be in the running are a building owned by the brother of Phillip Hanna, a well-known Armidale businessman who has hit the news more than once over his close links to Richard Torbay, the former NSW state MP who was to be the Nationals' federal candidate for New England.

Torbay's candidacy collapsed over his relationship with disgraced Labor powerbroker Eddie Obeid. And, in a neat circle that seems to encapsulate the Armidale community, his withdrawal cleared the way for Joyce to stand for the lower house seat in 2013, launching the ministerial career that led to the pesticides authority's move from Canberra to Armidale.


It will be five years next month since Richard Torbay's career collapsed in spectacular fashion. He had been a hardworking and popular local independent member who then chose to run for New England for the National  Party. One day he was running, the next he had stood down, a few days later he was subjected to nationally televised ICAC (NSW Independent Commission against Corruption) raids.

Mr Torbay was linked to Eddie Obeid through family connections. Part of the allegations made at the time was that his campaign as an independent had been facilitated by Labor Party money organised by Mr Obeid.

None of us know the truth. Five years down track, ICAC has still not taken any action against Mr Torbay, a delay that has become something of a scandal in itself.

Following the ICAC imboglio, Mr Torbay withdrew completely from public life. There is no evidence that he is in anyway connected directly or indirectly with the current tender.

Phillip Hanna is a member of a local Lebanese business family. Moses Hanna established a local retail business that developed into Armidale's second department store. Phillip, himself a controversial figure, supported and funded  the New England independents including Richard. We will come back to his involvement in the tender a moment. For the moment, and on the evidence provided by the Canberra Times. it appears to have been peripheral.

On the surface, it would appear  that the Canberra Times is drawing some rather long bows in their attempt to present what can only be described as the corruption of Armidale life.  

The piece continues

Hanna's name has come up in relation to another site in the running to build the authority's new headquarters, but it's unclear whether he's behind the bid. The lease of that site is in dispute after a deliberately lit fire in late 2016 destroyed the club that operated there and resulted in the club owner leaving town, deeply sceptical about how business is done in Armidale.

A third site is owned by grazier Peter Maguire – who is no relation of Greg Maguire, the Armidale businessman in the news for providing free accommodation to Barnaby Joyce and his new partner.

Peter Maguire's plan is to knock down buildings on four residential properties on the corner of Rusden and Markham streets, opposite the TAFE, and build the headquarters there. He wouldn't comment.

And the fourth site locals believe was in the mix is at 124 Taylor Street, where the local council approved an application for serviced apartments, but the deal to operate those apartments hasn't been completed.

The empty block is owned by Melbourne businessmen Bret Hartwig, Peter Breckenridge and Richard Minc. Hartwig would not name the developers behind a bid to build the authority's headquarters on his block, but he believes the bid didn't make it past the short-list and has lapsed.


This reporting appears broadly factual.

The piece continues - the fire at the Armidale Club

 First, to the property at 91 Beardy Street, where Kate Richards' Armidale Club was destroyed by arson in September 2016. Richards says couldn't restart her business after the fire. The owners told her the building was uninsured and couldn't be rebuilt.

But she says she has a 25-year lease on the site, signed in July 2015, and she insists the lease stands – a claim that complicates any new building on the site.    

Property owner Gary Burgess, who owns it with his son Greg, would not comment on the bid this week.

"There's three or four others in the running and I don't know which one's going to get it and I don't want to say anything about it. You would be the same if it was your bit of land," he said.

Asked whether Richards was still the leaseholder, he said "no, no, no, no, no" but would not elaborate.

As for Richards, she knew nothing about the club site being a possible new home for the authority until contacted by The Canberra Times.

She has spent 18 months fighting the loss of her business and, after waiting for the coroner's report on the fire this month, she now plans to sue Burgess for loss of profits and failing to insure the building.

Richards says she spent $80,000 setting up her club, ran it for little more than a year, and just two weeks before the fire she was granted a hotel licence, upgrading it from a club.

Armidale coroner Michael Holmes, reporting in February, found the fire was deliberately lit but did not name a suspect. The police did settle on a chief suspect – an Armidale security guard who shot himself the next day.

Police discounted Richards and her associate Allan St James as suspects, saying the pair were underinsured, had just received an expanded licence, tried to restart afterwards and had been trading well.

They also discounted building owner Gary Burgess, saying he had nothing to gain because the building was uninsured.

They dismissed the idea that the rival Sky Nightclub had started the fire, saying there was no evidence, everyone had an alibi, the Armidale Club was not a real commercial threat and the nightclub had since closed down in any case.

Police also rejected as unlikely that the fire was random, centring their suspicions on a security guard who worked at both nightclubs and at the Armidale hospital.

Police said there was circumstantial evidence of his involvement, including a dispute with a former club employee over a mobile phone that he believed had been left at the club, and his mental state at the time. His new mobile was left at the site after the fire, and he was linked with the bottles of whiskey used to start the fire in the early hours of the morning.

The coroner, though, described the man's suicide as "the matter of real coincidence", saying his death was related to "unresolved personal issues". There was no evidence tying the guard directly to the fire, the coroner said.

Under the heading "A coincidence", the coroner also referred to the competing clubs, saying there was no evidence either way on the suggestion a competitor might have been responsible.

Richards says "very strange things have happened" over the club, including rumours that someone had drawn up development plans for her site before the fire. She says a group of men were at the site the day after the fire and told her they were valuing it.

And she says Hanna approached her within weeks of the fire with an offer to buy her lease, which she was prepared to sell, but he never followed through with a concrete offer or deposit. She says Hanna had told her the site – which includes a large car park behind – was too small for the pesticides authority.

Richards says she tried to buy another hotel after the fire, but lost out to a rival venue, which came up with the $37,000 deposit before she could. The rival never settled on the purchase.

At that point, and after a house break-in, Richards decided it was time to leave town. She has started again with her partner in Adelaide.

"There was certainly a lot of things that were very odd," was how she summarised the rise and fall of her Armidale club.

The Canberra Times does not suggest the fire was connected to the authority's bid. The Coalition's plan to move the authority was an election promise at the July 2016 election, but the order to move wasn't made until November 2016, two months after the fire.

If it is a frontrunner in the bid to house the public servants, it is unclear who is behind the development, with no one prepared to put a name to the bid.


Again, this appears to be broadly factual reporting. Founded as a men's club, the Armidale Club later became a popular music venue but then went broke before restructuring. The fire remains a mystery, in fact a tragedy for those involved.

Again you have the attempt to maintain continuity with the overall theme both through the fire and Phillip Hanna's initial inquiry. The comment from final owner Garry Burgess suggests that the site is still in the mix. The Burgess' are another Armidale family with previous links to retailing. There is no suggestion by the Times  that Mr Burgess has in any way acted improperly.

The piece continues

Another option is a building owned by Robert Hanna, brother of Phillip Hanna, at 121 Rusden in the middle of the town. It is beside the family's historic department store and Robert Hanna said the single-storey building is vacant at the moment, with a car-parking building adjacent, and a structure strong enough to take extra floors on top. The Armidale business community believes this site is complicated by the existing building and tight time frames, so is perhaps an unlikely option.

While Robert Hanna owns the building and says it would be his development, Phillip Hanna has prepared the bid for him. Phillip Hanna would not comment for this story.

Phillip Hanna is known not only for his links with Torbay but made headlines in 2008 when he was given a three-year suspended sentence after pleading guilty to firing a rifle at a fellow developer the year before.  


This is again smear by insinuation, going back to Phillip Hanna's past, repeating the linkage with Richard Torbay.

Factually, 121 Rusden is not besides the "historic department store' but on the other side of the block. It's actually quite a good site, but may be ruled out by the difficulties.

The piece finishes

The pesticide authority's entry into New England was marred by controversy when its staff were found working in a McDonald's early last year. Now, 15 public servants, eight of them locals, are in temporary digs shared with Centrelink at 246 Beardy Street while the new office is commissioned. It will not be government-owned but leased from the winning developer.

Commercial property real estate agent Neil Mortimer said the project had generated large interest from developers. Another, John Sewell, said the building was likely to be $3 million to $4 million in value and a "mini-stimulus package" for the town.

"Everyone had their fair crack to do it. It was a very transparent process," Mr Sewell said.

He described the move as "probably one of the best things to happen to Armidale in the last generation" and backed the Nationals' move to decentralise the Australian Public Service.

"The people who work at the APVMA will be the right people to live in Armidale," he said.

Armidale Regional Council mayor Simon Murray said the move held a large potential flow-on effect for businesses and the town's vibrancy.

As for the Canberrans who work for the authority, a deadline looms. The authority says it will ask Canberra-based staff "to signal their intentions" on whether they will move in the coming weeks.


The earlier McDonald's story was another Canberra Times beat-up. 

I was interested in John Sewell's comment that it was a $3 to $4 million project and thus a mini-stimulus package. I would have thought that it would cost more than that. If you look at the projects I described earlier, you will see how small that is relative to other current projects. Of course, the real prize is the jobs. 


 The Canberra Times attempted to present the process in terms of a process within a corrupt business community competing for a large prize. Now if we look just at the evidence as presented by the paper, we have:
  • an apparently transparent Commonwealth process
  • with three to four sites of which:
  • one may be the site of a former club burnt down in suspicious circumstance 
  • a second is owned by the Hanna family with some involvement from Phillip Hanna who has a previous collection with Richard Torbay
 Talk about a biased beat-up. 


Johnb said...

In an economy based on property rights Jim whatever sites are looked at will have an ownership yet the Canberra Times seems surprised by that. Providing the process is transparent as public money is involved that is all that can be asked. Providing the agreed price and terms are open that will tell you if there is anything untoward independent of ownership. As to Armidales suitability in a wider context it does offer complimentary support for the work of such a Federal Government Department as per the quote below from the UNE.
“While UNE does not offer a degree in Veterinary Science, it has a long history of teaching and research in the area of production animal health and welfare. Disease is one of the key environmental factors influencing animal production and wellbeing. In doing so it interacts in complex ways with other environmental influences and with the host animal genes. Our goal in teaching animal health and welfare at UNE is to help students understand these interactions and thus develop a holistic approach to maintaining animal health and wellbeing. Our teaching is mainly to students doing B.Rur.Sci., B. Animal Sci. and B.Ag. but students from many other degree strands are exposed to the basic principles of health and disease management in livestock. For those people with a special interest in this area specialisation can be pursued at Graduate Certificate, Graduate Diploma, Masters or PhD level.

Our teaching and research in this area is greatly facilitated by our rural location, access to UNE owned properties and an excellent Animal House facility, our close links with the livestock industry, our proximity and links to relevant institutions such as CSIRO Livestock Industries in Armidale, the excellent laboratory facilities we have at our disposal and the "systems" approach to understanding and evaluating agricultural enterprises which is characteristic of UNE.

The animal health and welfare group has a high level of research activity which is recognised within the University, Australia and beyond. Particular areas of strength are the control of gastrointestinal nematode parasites (worms) of grazing ruminants, and the management of a range of poultry diseases.”
There are some strong fundamentals in support of what was a political decision as all ministerial decisions are.

Jim Belshaw said...

There was some dispute in the cost-benefit analysis of the value of all this which I partially disagreed with. In any event, and specifically on regulatory science,the UNE offering is described this way;

Regulatory scientists are required to make risk-informed and evidence-based decisions, whenever new drugs, medical devices, pesticides, genetically modified organisms, foods, veterinary medicines and fine chemicals have been developed for the market. These decisions are often made in the context of uncertainty and sometimes conflict over the public availability of these goods and the risks that they might pose, in a complex environment......

Both the Graduate Certificate in Science (Regulatory Science) and Graduate Diploma in Science (Regulatory Science) focus on the key challenges for regulatory scientists.

The core subject areas include policy and risk assessment, critical legal issues, and data analysis. The courses also involve a three-week work placement in a Regulatory agency. These interdisciplinary programs are taught by staff from several UNE Schools:

School of Science and Technology;
UNE Business School;
School of Law; and
School of Environmental and Rural Science.
And delivered in collaboration with Australian Regulatory agencies.

A science qualification (Bachelor to Doctoral) is required for admission to these programs.

The Master of Science (Regulatory Science), Doctor of Philosophy and Doctor of Industries and Professions research projects can also be undertaken to resolve regulatory science uncertainties and controversies. UNE researchers and regulatory scientists at the agencies jointly supervise these projects.

Unknown said...

Jim do you happen to know where the tender was first published? I know from the Senate Estimates hansard that it first appeared on austender on September 15th, 2016.

However some reliable Armidale sources have told me that local real estate agents knew about the tender before then. Do you know where else the tender was advertised before September 15th, 2016?

Jim Belshaw said...

hi "unknown". I don't. I suspect it was not. Locals were well aware of the possible move before the tender. On 8 June 2016, Mr Joyce said that APVMA would move to Armidale if coalition reelected. The matter had been discussed before then.

The elections were on 2 July 2016. The EY report on the move is dated 1 August 2016. With only a quick check I haven't been able to refresh my memory on when it was first released.

By 15 September 2016 the whole thing had been canvassed at some length. A key issue was whether the HQ would be at UNE or in town. UNE was apparent favourite but there were financial problems.

Pulling this together, if I were in Armidale real estate I would have been doing Have been doing my site and financial analysis well before tender release. Hope this helps.

Peter Harden said...

Thanks for your reply Jim, and yes I am aware of the long build up before the tender was first published on September 15th, 2016.

However I am trying to verify who first responded to this tender and when they first responded. The department have refused an FOI request to supply this information but we understand from reliable local sources that several real estate agents responded earlier in September, 2016.

And if so, how did they first find out about the tender before it was published on austender on September 15th?

Let me know if you find that out.

Also what were the financial problems you mentioned with the proposed co-location of the APVMA at UNE?

I also noticed it suddenly vanished as an option with no real public explanation given.

Jim Belshaw said...

I haven't gone back through my sources, Peter, but I should note that the post was based on public record plus my town knowledge. Because I wasn't living in Armidale I was outside the city gossip network at that point.

From memory, the initial idea was a building on campus. However, the feds wanted a turnkey arrangement with someone to pay for and build in return for a long term lease. As I said, I haven't checked, but I think this arrangement is referred to in the EY report. I think, and this is my perception based on knowledge of UNE as well as reports, is that UNE concluded that it simply could not afford the upfront cash out costs (and risks) given other priorities.

The decision to go for a turnkey solution of this type required a combination of suitable land plus builder plus finance plus long term ownership. That takes a certain time to put together. I guess from the viewpoint of your study one real question is when people first found out what was proposed. Did they get an early edge?

Peter Harden said...

Yes that model was the recommended model, and what they ended up doing with Stirloch.

However this is another part of the story that's not really been reported on at all. After all co-locating to create a 'centre of agricultural excellence' was the premise behind the whole idea and what gave Joyce so much support for the project in the first place.

Peter Harden said...

Apologies Jim, I never really responded to this point you made earlier.

"The decision to go for a turnkey solution of this type required a combination of suitable land plus builder plus finance plus long term ownership. That takes a certain time to put together. I guess from the viewpoint of your study one real question is when people first found out what was proposed. Did they get an early edge?"

Yes that is exactly what I am really focused on. Getting a clearer view of just how the first respondents knew about the tender, and in particular if any of them were associated or representing the property owner at 91 Beardy St.

If it turns out that this was the case, there will be quiet a few questions to answer and I would imagine some very nervous people. My understanding is that the police have reopened the investigation into the arson of the Armidale Club after receiving new evidence. This must be what that relates to I would imagine.

It's a truly amazing tale. One well worth getting to the bottom of.

Jim Belshaw said...

Hi Peter. I have seen your piece and will write a comment on it later. I guess my concern in all this is that it will, has, become yet another weapon to stop APVMA'a move to Armidale, something that makes a lot of sense to my my mind.

I noted Mr Joyce's comment on David Drummond and cutting corners. Drummond was my grandfather so that gives me a bias. Both the establishment of ATC and NEUC were driven through with remarkable speed, a speed that was wise. Any delay and they would have been closed by depression and war respectively. But Mr Joyce misunderstands. Drummond followed due process, he just did so very well!

Johnb said...

It might be wise to disentangle Process and Outcome or risk losing a desired outcome.

Jim Belshaw said...

Hi John and happy new year. I totally agree. I'm just not sure how best to do that!

Johnb said...

Health and happiness for you too Jim. Can you split the process into two parts, firstly the process used to decide on an Armidale location then secondly the process followed to secure the actual address location in Armidale itself. If the first process is sound and the second not then you might be able to proceed without loss. You may also need an actual ‘whistleblower’ to provide strong enough evidence and/or good documentation from FOI requests. Time and effort, Risk and Reward also come into the equation.

Jim Belshaw said...

I think, John, that I need to focus first on why the Armidale location makes sense. Establish that and the other questions can be dealt with in context without destroying the whole thing