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Giralang shops debacle: residents still losers

By ddd444 - 28 September 2016 8

giralang-shops-k

There should be an inquiry held into Giralang shops, it shouldn’t take ten years+ to end up with a half built centre being bulldozed and replaced with flats, whatever your opinion on whether Giralang should have shops is.  Why can’t local government handle a redevelopment of a local shops without it coming to this?

During the time that Giralang has been without shops, Crace appeared and got a Supabarn and shopping centre, Casey got two supermarkets with an option for a third, Lawson has been granted a supermarket and shops, Dickson got an Aldi, and many other examples.  DFO Fyshwick were lucky enough that the ACT Government completely changed the planning laws to allow them to have a 1000m2 supermarket in an area not zoned for supermarkets to attempt to save their business, despite the many other commercial interests that might be hurt by that.  Most of these shopping centres are far bigger than the approved 1500m2 centre at Giralang.

Kaleen Supabarn is now a Coles.  Supabarn had previously argued that a major such as Woolworths in Giralang would harm competition and appealed our DA.  Now there is no competition against Coles in Kaleen, which is a much larger centre than our DA of 1500m2.

The ACT Government excluded Coles and Woolworths from bidding on certain Gungahlin supermarket sites in the interest of “competition” with the effect that Supabarn were able to easily purchase them.  Supabarn then simply attempted to sell those sites to Coles.

Why has the legal process held up Giralang shops for so long, when all these new shops are popping up all over the place?  There are competing commercial interests in all these cases that I’m sure would like to stop the process…  why has this only happened for Giralang?

The good news for Giralang residents is that the court action by competing commercial interests has been dismissed. Woolworths then immediately formally announced in the Canberra Times they are no longer interested in tenanting the site.  Given the length of time that has gone by, it is not surprising that Woolworths presumably no longer had any contractual obligation to lease the half built shopping centre.

The position of Andrew Barr, that I have in writing from him verbatim is:  “The ACT Government has moved to specify that the gross floor area for shops in local centres cannot be larger than 1000m2”. The Labor Party has multiple times indicated to me that their position is that local shops should not be more than 1000m2 total, and that the Giralang shops DA which is a total of 1500m2 for the entire centre would have to be downsized to 1000m2 should a revised DA be submitted due to the ongoing legal action or for any other reason. The ACT Government has publically stated that they prefer a “compromise solution” which should involve a shopping centre of no more than 1000m2 due to their revised policy since the DA was approved.

Other sources imply that the 1000m2 rule may apply only to the supermarket, in which case the Giralang shops could continue to be 1500m2 even with a revised DA that included flats to compensate the developer for being unable to secure a major such as Woolworths as a tenant, as long as the supermarket component was no more than 1000m2.  However the Labor Party still appear to be opposed to a 1500m2 centre at Giralang based on their policy of 1000m2 total shops space as quoted in writing to me in their last correspondence.  I have sought clarification on this from the Labor Party, however have not received a response yet, and do not expect to for a long time if at all based on previous experience.

I have a hard time identifying where the 1000m2 total floor space for shops applies apart from Giralang.  It appears all the surrounding new suburbs are getting large local centres, and the existing local, group and town centres are expanding.  Giralang now seems set to have our shops replaced with flats when we bought into the suburb in good faith with a shops in place.

The ACT Government claim that their policy of no more than 1000m2 of shop space is to “ensure the viability of all local shops”.  That that policy may result in Giralang having NO local shops does not appear to be a factor they consider.

What’s Your opinion?


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8 Responses to
Giralang shops debacle: residents still losers
1
reddy84 9:35 am
28 Sep 16
#

The Territory Plan states that no ‘shop’ can exceed 1000m2. You can use the space to develop more shops as long as no single one exceeds the maximum space allowed. This is what the court case was about in the first place. You probably received a reply from a confused staffer.
The site is no longer financially viable since Woolies pulled out so it will need to be a smaller supermarket space that would attract IGA (or unless they can get Aldi in there).

Anyway, the decision would be made by EPD, not the Labor party, best to contact them.

2
JC 11:10 am
28 Sep 16
#

ddd444 , few points, the government is not the developer and in this case think it is well documented that the government has done all they can to support and help get through the development.

The core issue is a group of traders who were happy to push the development through the highest court in the land, that is what has delayed this so long, and unfortunately Giralang is now a ‘victim’ of Woolworths internal issues hence why they have pulled out.

And that core group of traders are essentially the ones who pushed the supermarket policy of the government in the name of competition, but which ultimately lead them having near monopoly status on the development of new sites, and not surprisingly development is their primary business. Look at Casey and Crace for example, built by this developer with their supermarket brand being the tenant. All the while they where whining about say Woolworths Bonner, not counting office space as floor space etc. Though the same group were quite happy to sell out to the competition when it suited them, but have been forced to keep a few stores (Casey and Crace) in the name of competition. The only one they really wanted to keep was Kingston as they will make more money developing that site and then selling as a going concern.

So messed up all round that is for sure.

And Reddy84 for clarity the plan states no shop can exceed 1000m2 in local shopping centres. Bigger shops are allowed in group and town centres. With Giralang, if I am not mistaken the original plans predate the 1000m2 requirement hence why Woolworths would have been allowed the larger shop.

The other interesting thing with Woolworths (and Coles too) is, is a separate grog shop counted as part of the main shop or is it a discrete separate shop, and as was the argument in Bonner does the 1000m2 relate to the trading space or does it include store rooms and office space?

3
buzz819 2:40 pm
28 Sep 16
#

I live in Giralang and know some of the owners of the old shops. They shut down because the residents of Giralang traveled the short distance to the then Jewel Supermarket or to Belconnen Mall. Which stopped them making a profit.

Who in their right minds is going to open a shop in a glut of shops. As you stated, there are a lot of shops in the area. Two sets of shops in Kaleen, two in Evatt, a medium to large supermarket in Crace.

On top of that Giralang is smack bang in the middle of two shopping centres that have 3 large supermarkets each. Both less than a 6 minute drive away.

Some other notable suburbs that have survived without shops; McKellar, Flynn, Latham, Aranda, Harrison, Downer, Fisher, Oxley, Macarthur, Gilmore and Theodore.

It really comes to supply and demand, why would someone open up shops when there are 3,300 (2009 census) people in Giralang and there are 20 supermarkets, including 8 large supermarkets in a 5km radius of Giralang?

Yes, I would have loved the shops opening up here, but does it effect my life? Not really. Am I going to blame the government when there are so many other parties to blame; the long running tit for tat dispute between Supabarn and Woolworths, IGA’s not wanting to lose market share to a major brand, the courts for taking so long to make their decisions and the local population for not appropriately supporting the shops when they had them.

4
Tempestas 10:06 am
29 Sep 16
#

It’s also worth noting that the developer has managed to build a hotel & shopping precinct in Gold Creek in the time since they demolished the mess they left.

The moment the ACCC approved the Supabarn sale to Coles I knew Woolworths would pull out & I suspect given their current Masters related losses they wouldn’t have gone ahead anyway.

Despite all the planning missteps how does any leaseholder get to treat a site like this for so long?

Surely the ACT Govt can pay current market value for a site with no viable commercial use to the current owner, & reauction the site. I’ve no doubt there are developers who could build a centre with the current rules that could be viable. It may not feature a big name supermarket but that doesn’t mean it wouldn’t be viable. Aranda’s old shops shows it can be done.

5
devils_advocate 11:26 am
29 Sep 16
#

Tempestas said :

It may not feature a big name supermarket but that doesn’t mean it wouldn’t be viable. Aranda’s old shops shows it can be done.

+1. A few misconceptions and conflations in this debate. The grocery market is not a single homogenous market, it is divided between the bulk shop and the ‘top up’ grocery market (it has been argued that fuel stations are also part of the market but it’s tenuous).

Local ‘top up’ grocery stores are used by local residents to get bread, milk and things they run out of in between their larger weekly shops. These shops often charge higher prices, but people still pay these prices because of the convenience factor.

A large grocery store would bring with it the need for extensive parking and massively increase load on the roads around the site, fundamentally changing the character of the neighbourhood. Residents might end up actually resenting it.

Also, just having a big-name grocery retailer there doesn’t mean the prices will be lower. Large retailers can and do engage in strategic price discrimination. There are frequent and significant differences in the prices charged for the same product between two outlets of the same major store.

6
JC 2:13 pm
29 Sep 16
#

Tempestas said :

It’s also worth noting that the developer has managed to build a hotel & shopping precinct in Gold Creek in the time since they demolished the mess they left.

The moment the ACCC approved the Supabarn sale to Coles I knew Woolworths would pull out & I suspect given their current Masters related losses they wouldn’t have gone ahead anyway.

Despite all the planning missteps how does any leaseholder get to treat a site like this for so long?

Surely the ACT Govt can pay current market value for a site with no viable commercial use to the current owner, & reauction the site. I’ve no doubt there are developers who could build a centre with the current rules that could be viable. It may not feature a big name supermarket but that doesn’t mean it wouldn’t be viable. Aranda’s old shops shows it can be done.

Unless I am mistaken the ongoing court battle has prevented the developer from actually doing any building.

7
Elf 5:18 pm
29 Sep 16
#

Reality is that the Giralang residents stopped shopping at their local centre and it become unfinancially viable. Likewise the Tavern closed because people were happy to travel. (To play Pokies no doubt).
Unless you build a Woolies or Coles who in their right mind would open a shop there? No one shopped there when they had shops. The residents group that has done nothing but whinge about the site for years could have taken the opportunity to open their own supermarket or shops there but of course they want somebody else to waste their money on an obviously profitless businesses.

8
buzz819 7:36 pm
29 Sep 16
#

devils_advocate said :

Tempestas said :

It may not feature a big name supermarket but that doesn’t mean it wouldn’t be viable. Aranda’s old shops shows it can be done.

+1. A few misconceptions and conflations in this debate. The grocery market is not a single homogenous market, it is divided between the bulk shop and the ‘top up’ grocery market (it has been argued that fuel stations are also part of the market but it’s tenuous).

Local ‘top up’ grocery stores are used by local residents to get bread, milk and things they run out of in between their larger weekly shops. These shops often charge higher prices, but people still pay these prices because of the convenience factor.

A large grocery store would bring with it the need for extensive parking and massively increase load on the roads around the site, fundamentally changing the character of the neighbourhood. Residents might end up actually resenting it.

Also, just having a big-name grocery retailer there doesn’t mean the prices will be lower. Large retailers can and do engage in strategic price discrimination. There are frequent and significant differences in the prices charged for the same product between two outlets of the same major store.

They didn’t use the “top up” supermarket last time, why would they use it now?

What’s the difference between travelling 2km from the top of Giralang to Coles Kaleen, or 1.7km to Supabarn, or the same distance from the bottom of Evatt to the Evatt shops??

It is just that Giralang is too small for anyone to afford opening a shop there as an independent.

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