Toowoomba city hall.
Toowoomba city hall. Bev Lacey

Claim against TRC over developer agreements withdrawn

UPDATE: The planning lawyer who claimed the Toowoomba Regional Council had waived millions of dollars in infrastructure charges for a developer has withdrawn his letter to two state ministers.

QuDA Planning Lawyers' Andrew Davis wrote again yesterday to State Development Minister Cameron Dick and Local Government Minister Stirling Hinchliffe, informing them he was withdrawing his previous document sent earlier this month.

The original claim related to the council's handling of two infrastructure agreements it signed with Toowoomba's FKG Logistics, a subsidiary of FKG Group, for the development of its Witmack Industry Park.

Mr Davis said his original calculations were wrong and has apologised to FKG.

As with the previous letter, neither Mr Davis or The Chronicle suggested FKG Group had committed any wrongdoing.

In the new letter, Mr Davis admitted he had miscalculated the overall waiver or discount the council allowed in the agreements, which was due to information he had not been privy to.

"FKG Logistics Pty Ltd wrote to me on 16 October 2019 challenging the accuracy of the matters covered in my letter. FKG is correct," he wrote.

"An important matter FKG brought to my attention that I was not previously aware of, is that FKG had, at the time development approvals for the subdivision of the Witmack Industry Park were given in 2010, lawfully elected under an early payment concession provision appearing in the then in force 2009 planning scheme policy (PSP), to pay infrastructure charges by reference to the immediately preceding PSP that had commenced to operate in 2005 but had ceased to operate about seven months before the development approvals were given.

"The 2005 PSP treated the calculation of infrastructure charges very differently from the 2009 PSP.

"Under the former, charges were required to be paid based on land area, irrespective of whether the development proposed was for subdivision or material change of use.

"That FKG made that election is not clear on the face of any of the publicly available documents I have been able to obtain, including the two infrastructure agreements.

"I apologise to FKG. I failed to state in my letter of 7 October 2019, and I ought to have done so, that I was not suggesting that FKG had done anything wrong, illegal, dishonest, corrupt, secretly, and so on."

However, Mr Davis re-affirmed his complaint against the TRC, saying there were still issues with the agreements that it signed.

EARLIER: The State Government has referred allegations the Toowoomba Regional Council waived more than $21 million in infrastructure charges for a developer to the state's corruption body.

Experienced planning lawyer Andrew Davis' letter to State Development Minister Cameron Dick and Local Government Minister Stirling Hinchliffe argued the council signed favourable infrastructure agreements with several entities owned by Toowoomba developer FKG Group.

There is no suggestion of any wrongdoing by FKG Group.

The two agreements, signed in 2010 and 2016 by two different council CEOs, related to the development of FKG Group's Witmack Industry Park at Wellcamp.

Development starts at Witmack Industry Park at Charlton in 2012. Photo: Bev Lacey
Development starts at Witmack Industry Park at Charlton in 2012. Photo: Bev Lacey

It comes as the council prepares this week to urge the Local Government Association of Queensland to lobby the State Government into changing legislation around infrastructure charges, after the TRC lost in court to Wagner Corporation in June.

The TRC spent $1.15 million over three years fighting Wagners in the Planning and Environment Court over infrastructure charges it levied the developer, for works it did not intend to build at the Wellcamp Business Park.

Mr Hinchliffe's office advised Mr Davis that his letter about the council's decisions had been forwarded to the Crime and Corruption Commission.

Mr Davis, who represented Wagners in the case but said he was not acting on behalf of the company, alleged in the letter the value of infrastructure charges waived by the council dwarfed the value of the works FKG Group actually committed to building.

"If today's value of (the waiver) is about $21 million, that is over five times the value of the works performed by FKG to obtain it," he wrote.

"This is not a case involving swings and roundabouts. It is a case involving orders of magnitude.

"The quantum of the ratepayer money involved alone warrants a referral to the Crime and Corruption Commission for investigation."

Mr Davis argued that in the original 2010 agreement, which The Chronicle has seen, FKG Group was waived of $17.2 million in charges in exchange for building certain stormwater, sewerage and water infrastructure to the value of $6.3 million.

The council changed how stormwater charges were calculated in 2012, which Mr Davis said caused the figure waived to balloon out to $17.9 million.

Toowoomba Regional Council CEO Brian Pidgeon.
Toowoomba Regional Council CEO Brian Pidgeon.

The second infrastructure agreement, signed in 2016 by current CEO Brian Pidgeon and also seen by The Chronicle, actually reduced the value of the works required to be completed by FKG Group in exchange for more concessions.

"In the 2016 agreement, the TRC increased the value of the (waiver) to FKG by $2.4 million by reducing by the amount of infrastructure works required to be constructed by FKG," he alleged.

"The infrastructure works required to be constructed by FKG were reduced in value from $6.373 million to $6.182 million.

"However, under the 2016 Agreement, FKG was no longer required to build the infrastructure Dry Creek land retention basin and Dry Creek crossing if it gave to TRC certain land.

"The result was the following reduction in the value of the works/dedication required to be given by FKG, and the enlargement of the (waiver) from TRC to FKG from $17.966 million to $20.601 million."

Mr Davis said changes in 2019 to the council's charges resolution increased the effective value of the waiver to $21.193 million.

The complainant also alleged the council had breaching the Planning Act by not keeping a register of its infrastructure charges agreements, attaching email correspondence he kept with TRC officers.

Mr Davis said the council consulted with FKG Group before releasing the infrastructure agreements to him.

FKG Group declined to comment on the matter.

Mr Pidgeon said the council would provide both ministers with a "comprehensive response" to the letter.

"The research required to form a factual response to any potential allegations arising from the letter is extensive, as the initial approval of the Witmack development was in 2010, and the council is currently examining documents and records dating back to that time," he said in a statement.

"Although the council is yet to receive any enquiry from the ministers who received the letter, it will be providing a comprehensive response directly to both ministers."