Luna Park millions go to developer

[Zamperla]

Luna Park millions go to developer By Anne Davies, State Political Editor July 16, 2005, Herald Sun Sydney Millions of dollars promised in a deal to guarantee the future of Luna Park will instead flow to the development giant Multiplex, while the trust that holds the site for taxpayers gets just $3. Despite the NSW Government's claim the commercial developments associated with Luna Park are needed to keep it alive, a Herald investigation has revealed that no stream of revenue will flow from them to the trust or the park's operator, Luna Park Sydney. The developments - the Milsons Landing office block, a proposed cliff-top site and a car park - were divided from the main park and leased to Metro-Edgley for 99 years for $1 each. The profits go to Metro-Edgley, owned by Multiplex, or, in the car park's case, directly to Multiplex. The Mayor of North Sydney, Genia McCaffery, said she was shocked to learn details of the arrangement. "It's outrageous that the NSW Government is allowing the developer to keep asking for more and more development of public land," she said. AdvertisementAdvertisement Luna Park would be destroyed by overdevelopment, she said, "because some public servant mismanaged the process". She called for an inquiry and a moratorium on further developments. Metro-Edgley reported a profit of $12.54 million in the 2003-04 fiscal year, from development revenue of more than $75 million. The chief executive of Luna Park Sydney, Peter Hearne, said some of Metro-Edgley's profits had been used to reduce the operator's debt. But he would not explain how the flow of funds occurred or how much of the $80 million poured into the park's redevelopment had been repaid. Rob Lang, the head of the Sydney Harbour Foreshore Authority, which administers the Luna Park Reserve Trust on behalf of the Government, said: "The financial arrangements [of Metro-Edgley and Luna Park Sydney] are a matter for these companies, and Sydney Harbour Foreshore Authority has no knowledge of these details. " However, it was clear from the Luna Park Site Amendment Act 1997 that these sites were in part compensation for the consortium to take on the operation of the park." Asked whether the trust could vouch for whether the profits from developments such as the office block had been used to pay off Luna Park's debt, Mr Lang said Metro-Edgley and Luna Park Sydney were not required to provide that information to the trust. The complicated wheeling and dealing over Luna Park is contained in a series of agreements and leases negotiated in 1998 and renegotiated last August. As part of that renegotiation, the commercial development sites were divided from the fun park. Luna Park Sydney has a 40-year lease of the fun park - that is, the rides, the Crystal Palace and Coney Island - and pays rent to the trust based on the park's turnover. But the trust gives all of the money back, less operating expenses, so that Luna Park Sydney can pay for the upkeep of the heritage elements of the park. Multiplex did not return the Herald's calls but a spokeswoman for the Planning Minister, Craig Knowles, said: "The Government's intention was to return Luna Park to the people of Sydney and NSW and to do so without any need for a recurrent public subsidy. That objective has been achieved."

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This made the front page of the SMH, if you can believe. It's a very confusing article, too complicated for my little head.