East Perth (inner city) primary school
Latest update
An architect has been appointed by the State Government to undertake detailed design of the primary school redevelopment in East Perth.
Edgar Idle Wade (EIW) will design the school in a joint venture agreement with ARM Architecture.
The State Government anticipates the school will be open in time for the 2029 school year. It will initially have capacity for 600 students and will be designed so it can expand to 800 in future years.
As the school site falls within the Central Perth Redevelopment Area, Development WA is the planning authority for any proposed development of the site.
The City of Perth will be consulted during the planning process and will provide comment on design to Development WA.
Background
The City of Perth has advocated for a city primary school for many years. In fact, a school in East Perth is one of the recommendations within the City’s Local Planning Strategy May 2023.
In April 2023, the State Government announced it wanted to build a school on City-owned land at Queens Gardens Car Park in Nelson Cres, East Perth for this purpose. The development required two-thirds of the carpark.
The City gave approval to the Department of Education to carry out on-site geotechnical investigations related to the land while preparing its own due diligence to inform negotiations with the State Government.
The State Government did not offer any financial compensation to the City of Perth for land that they have had valued at approximately $40 million.
Leading economics, policy and strategy advisory firm ACIL Allen were engaged by the City of Perth to develop the Business Plan for the East Perth Primary School for Council consideration.
The Business Plan is available for the public to view here under Urgent Business Reports.
The Business Plan was prepared and presented to Council, it concluded:
The City of Perth should decline the Major Land Transaction under the current terms proposed by the State Government. The City is not responsible for providing schools infrastructure, and must take a broader perspective when considering the use of scarce land within its boundaries. Appropriate compensation must incorporate the current and future value of the land to the City and its ratepayers, the opportunity cost of curtailing the future development potential of the land, and the value provided to the State Government in assisting it meets its own statutory requirements.
At the Ordinary Council Meeting on 26 March 2024, Council resolved to decline to enter into a Major Land Transaction in respect of the land under the terms and conditions proposed by the State Government.
Council authorised the City of Perth CEO to continue engaging with the State Government to negotiate satisfactory terms for the Major Land Transaction.
In June 2024, the City provided the State Government with six alternative options to support the building of a primary school in East Perth in a way that would see compensation returned to ratepayers.
The State Government did not respond to the City’s options and in August 2024 introduced legislation to compulsorily acquire the parcels of land for nil compensation. The Queens Gardens Car Park (Inner City School) Act 2024 was assented in October 2024 and is now in force.
Car park revenue
The Queens Gardens Car Park provided $1.5 million in City revenue per annum. The new legislation means the City loses 513 (two thirds) of its parking bays. The State has offered a one-off payment of $4.2 million to offset lost City revenue during the construction period.
Modelling determined that the outcome of this action would see a rates increase for City ratepayers of between 1.2 or 1.3 per cent.
The Lord Mayor’s response to the State Government announcement is available here: No compensation offered to City of Perth for its land | City of Perth
The land
The school site is the Queens Gardens carpark in Nelson Cres, East Perth (parcels 2 and 3).
The total carpark, which had 863 standard bays, was one of the most significant cash flow generating car parks within the City’s portfolio and was forecast to provide a net cash flow of $1.5 million last financial year. The revenue from the City’s parking business is a critical revenue stream that helps keep rates to a minimum.
The site comprises three parcels of land which totalled 2.6ha. The State Government compulsorily acquired parcels 2 and 3 – approximately 1.6 ha.
The City of Perth purchased the land around 50 years ago from private landowners and held it in freehold ownership.
Frequently Asked Questions
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What were the six options that the City presented to State Government?
The options presented by the City for consideration were:
- Sell the Freehold land to the State based on fair market value.
- State provides a Fund for community-based projects of equivalent value. This option allowed for the State to provide a fund of equivalent value, approximately $40 million, for the City to draw on for a pre-agreed range of projects and pre-agreed terms and conditions.
- Enter into a Land Swap or Land Exchange arrangement. The State could provide freehold land to an equivalent value as part of a land swap arrangement and a number of parcels were identified for a potential swap.
- Provide a Peppercorn Lease Arrangement over State-owned car parks managed by the City of Perth.
- State reduces Perth Parking Levy for City-owned car parking bays. The City currently pays around $18 million annually under the Perth Parking Levy. This option suggested the State could reduce the Levy on the City’s car parking bays.
- Enter into a Leasehold Arrangement. For example, the City could grant a long-term ground lease to the State to enable the East Perth primary school to be developed and operate until the end of its useful life.
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How long had the City of Perth owned the land required for the primary school and what is its value?The City purchased the land for carparking in the 1960s and 1970s from private landowners and held it in freehold ownership. The carpark operated for more than 50 years.
The market value of the land required for the primary school was approximately $38 million to $40 million. -
Who is responsible for the selection of public primary school sites?The State Government, through the Department of Education is responsible for the selection of school sites. The City was not consulted during the site selection and analysis process.
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Why didn’t the City and the State Government agree on the terms for the transfer of required land for the primary school?Local governments have never been asked to provide freehold land for school sites for nil compensation.
A standard land transaction usually involves a willing buyer, and a willing seller whereby offers and counteroffers are made, and a fair value negotiated where both parties are reasonably satisfied.
The State required the land to be transferred for nil consideration. The City was not a willing seller on those terms and rejected the proposal. -
Why wasn’t the Business Plan advertised for public comment?
The Business Plan is available for the public to view here under Urgent Business Reports.
The draft Business Plan was informed by the terms and conditions proposed by the State Government in correspondence.
Such plans are usually released for public comment when the terms are acceptable to the City of Perth and accompanied by an agreed deed or other formal arrangement. There was neither an acceptance of the State’s proposal, nor was a formal arrangement completed. The Business Plan therefore could not be advertised in its current form.
Part of the resolution was that Council:- Declines to enter into a major land transaction under Sc 3.59(3) of the Local Government Act 1995.
- Does not proceed to advertise for public comment the draft Business Plan in accordance with Section 3.59(4) of the Local Government Act 1995.
- Authorises the CEO to continue engaging with the State Government to negotiate satisfactory terms for the Major Land Transaction.
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What was the Chevron Hilton Hotel Agreement Act 1960?In 1960, the City agreed to establish a public car park on the Nelson Cres land, along with other property initiatives, as part of the agreements encompassed in the Chevron Hilton Hotel Agreement Act 1960.
The Act was introduced ahead of the 1962 Commonwealth Games to allow for the development of the Chevron Hilton Hotel (which never eventuated) in the Perth CBD and to facilitate a number of other property transfers.
Whilst the key initiatives within the Act were resolved long ago, the Act was never repealed.
The City had frequently appealed to the State Government to repeal the Act and enable the City to consider developing the site for the benefit of the community. -
What does the new Act do?The new Act terminates the agreement entered on 2 September 1960 between the State Government, City of Perth, Chevron-Hilton Hotels Ltd and SGIO without the agreement of the City, and repeals the Chevron Hilton Hotel Agreement Act (1960).
The new Act requires the transfer of 16,000m2 of freehold land owned by the City to the Minister for Education for nil consideration, to allow for the development of the inner city school.
The new Act states that the City cannot commence any proceedings against the State Government and its right to claim compensation under parts 9 and 10 of the Land Administration Act 1997 (WA) do not apply in relation to the transfer of the land. However, the State must pay the City a lump sum of $4,217,000 for the loss of car park revenue calculated over the period of time from assent of the new Act to the opening of the Inner City School.
