Melbourne Racing Club claims $195m Mount Scopus deal imperiled by council levy

Melbourne Racing Club has vowed to press on with a debt-clearing deal to sell a $195 million slice of Caulfield Racecourse to a private school despite telling a tribunal that a council levy had put the plan at risk.

The MRC has taken Glen Eira City Council to the Victorian Civil and Administrative Tribunal challenging conditions on a subdivision permit required to sell land along Kambrook Road to Mount Scopus Memorial College.

It has asked the tribunal to scrap the estimated $3 million public open space contribution normally imposed on subdivisions, arguing it went against the levy’s purpose of promoting greenery alongside residential, industrial or commercial development.

“This is an extraordinary impost for a proposal that is no more than an internal boundary realignment,” the MRC said in its submission, obtained by The Age.

The racing club then suggested the entire Mount Scopus plan could be in jeopardy if the tribunal didn’t amend the approved planning permit.

“The alternative is to retain condition 11 in its current form and thereby to impose a substantial unwarranted burden on MRC that could imperil the proposal the condition is otherwise intended to allow.”

But when contacted by The Age on Monday, an MRC spokesman backed away from the club’s lawyers’ submission that the open space levy imperiled the land deal and was adamant the transaction would proceed.

“What we can confirm is that the Mount Scopus project is progressing and remains firmly on track. This is a routine VCAT process regarding conditions on an already approved permit, and any finding from VCAT will in no way impact the project. Both the MRC and Mount Scopus remain committed to completing the transaction.”

The MRC announced a 7.5-hectare land sale last December, but it is still not finalised as the school has two years to settle.

The deal would give Mount Scopus, a private Jewish school, a land tract which runs the length of the western area of Caulfield Racecourse – from Station Street along Kambrook and Booran roads to Glen Eira College – and allow it to consolidate three campuses into one in Melbourne’s Jewish heartland.

A subdivision was required before the sale as an existing northern parcel within the larger proposed development site included administration buildings and track access that the MRC needs to keep.

The larger slice of the subdivided block, which is mainly now a car park, is slated for Mount Scopus in a future completed sale.

The deal is crucial for the racing club and chairman John Kanga, who dramatically took control of the $1 billion MRC last year and soon announced the sale of old training facilities to Mount Scopus to help clear the club’s debt.

The MRC’s annual report released last week showed debt had increased to $178 million.

In its submissions to VCAT, the MRC conceded its request to not pay the open space levy was “novel and unusual” but argued the circumstances – in which part of the land “might one day be used for a school” – were unique as well.

The entity leading the Mount Scopus development, Project Generation Ltd, also joined the VCAT case to oppose a condition requiring the new owner of the subdivided parcel on Kambrook Road to enter into a covenant with the Heritage Council that blocked any new buildings.

PGL argued it could have a devastating impact on Mount Scopus’ transformative project and was unnecessary.

“This potentially renders the site too small for PGL’s purposes and threatens the commercial feasibility of the project,” the submission said.

But on Monday, Scopus Foundation president David Gold said Heritage Victoria had withdrawn its covenant condition.

“We’d been told it was no longer an issue,” he said.

A spokesman for Heritage Victoria said a heritage permit would still be required for any development proposal.

Acclaimed New York-based architect Daniel Libeskind has been brought in to design the new Mount Scopus campus, and more detailed development plans are expected to be finalised in November.

A spokeswoman for Glen Eira City Council declined to comment on the ongoing dispute with the MRC over the open space levy.

The VCAT decision on that matter is expected in the coming weeks after a hearing was held on September 8 and 9.

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