All that glitters: Developers, deals and donations on the Gold Coast.
- Posted in: Finance
- 2017 September 18
The Gold Coast is the epicentre of political donations by developers to local Councillors. The above story was reported by Mark Willacy and presented by Sarah Ferguson and aired on Monday 18th September 2017 by ABC 4Corners.
The story in-particular highlights a transaction undertaken by Crestden Pty Ltd in which controversial Cr Tate (Gold Coast Mayor) and business partner Kelvin Gersbach are joint shareholders, acquired the multi-million Surfers Paradise Bowls Club property ‘for nothing’.
With the club sinking into debt, its management committee decided to sell up and relocate…that sparked two expressions of interest from developers.
One was for $7-million from superannuation fund in Brisbane and another was from Sunland, which is a public company, for $7.5 million. But a company called Crestden came to the rescue.
Under the deal, Crestden purchased the clubhouse for one-point-four million dollars and rented it back to the bowlers. When the announcement was made that Crestden had taken over the club, but the club continued to languish and debts continued to mount. In 2007, with the agreement of the club board, Crestden exercised its option to buy the bowling greens for a fraction of what the members believed they were worth. They paid $770,000 the price shown on the transfer and that was the sale price. $770,00 is about 10 per cent of what the security was worth.
It is absolutely prime real estate and recently a development application to build a 60-story tower on the old bowls site includes units, a motel, shops, restaurants and a sky garden has been conditionally approved by council and the project is reportedly worth 300-million-dollars.
Crestden’s lawyer told Four Corners the amount paid by the company for the greens reflected true market value.
Writing this story gives me the opportunity to warn readers that all that glitters is not gold and that too much debt can be the quicksand which swallows you up along with your financial legacy. You should always proceed with any agreement or contract with the utmost caution and always obtain independent legal advice.
If the past is any indication, lenders and the financial services industry will continue to take advantage of borrowers. Know their tricks, protect investments and maximize wealth with the lessons in my book “Get a Second Opinion before You Sign”.