4CA - Queensland's Home for Fake News

4CA - Queensland's Home for Fake News
4CA - Queensland's Home for Fake News Led by John "Cueball" Mackenzie

27 April 2011

OUTSIDER DEVELOPERS AND LANDLORDS CONTINUE TO SCREW CAIRNS BUSINESS WITH ATO SUPPORT

A quiet change of ownership of the Pier Marketplace recently demonstrates the damage being done to our business community and tourism industry by "carpetbagging" developers and landlords.

The Pier Marketplace was, in 2007, a vibrant and bustling retail and entertainment precinct. So important was the Pier to the tourism industry that it was considered a "destination" - a place where tourists were dropped off by the busload, where merchants thrived, and innovative retailing grabbed a foothold including the "Man Overboard" shops as well as the giant, talk-of-the-town industrial coffee grinder at the coffee shop.

Then Addenbrook Pty Ltd came to town. Addenbrook is a company set up by reclusive Sydney millionaire Denis O'Neil but used by his young son Ned as "investment training" - the kind of education you don't get at Scots College. The Pier was the first major purchase by Ned, who's a known entity in the Woollhara yachty and horsey set. With daddy's money, Ned decided he could do a LOT better at the Pier Marketplace, and proceeded to "work his developer magic" from his waterfront office in the Sydney CBD.

Ned's big changes included running out virtually all of the retailers with abusively high rents, short leases (which discourage any real investment), and removal of the just-remodeled food court -- a food court that featured terrific restaurants like Donnini's and Cafe China. Shops selling indigenous crafts and arts were removed, as were "show" type retailers including Cairns only live glass blowing. Instead, Ned figured he could make more money (with daddy's money) by building more hotel rooms for the Shangri-La (an expansion done so cheaply that the noisy plywood floors routinely annoy the guests and the plumbing is a constant maintenance problem for the hotel). Expensive "short term" office space, and a health club with so little chance of success that had two owners in the space of three months.

As things began to deteriorate, desperation set in for Ned and his (daddy's) company. More space was converted for a rabbit warren of hotel meeting rooms. Despite being approached by the Hard Rock Cafe for an upscale adult music venue, they instead went downmarket with a short-lived Saturday farmer's market.

Four years later, Ned O'Neil has all but killed the Pier Marketplace - it's no longer a "destination" location for tourists in Cairns, and most days is largely a ghost town. This wonderful waterside location, which should be an anchor for upscale tourism and nightlife is instead now been sold off to Shangri-La, who likely have the expertise to breathe new life into this Cairns icon.

But does Neddy care? Nope, because when princelings fail to be as smart or clever as their parents, due to the ATO gift of "negative gearing", failed business by the wealthy is underwritten by our tax laws. Corporate welfare for the wealthy. We ALL pay, and the rich get richer.

Professionals "in the know" estimate Addenbrook and Neddy have lost over $20,000,000 on their uninformed Cairns venture. Had they left well enough alone they'd likely have made money!

This is the reason so many shopfronts in Cairns are empty for months or years. Their wealthy, mostly southern and Perth-area owners use the paper losses on Cairns real estate to reduce their taxes on other investments. Heads they win, tails they win! Thus there is no incentive for commercial rents to find their "true" value as have residential rents over the last few years. Esplanade shop owners tell of greedy landlords who've continued to raise rents as tourism tumbleweeds have blown down the Esplanade. WTF?

Funnily, Ned O'Neil would seem to be something of an environmental terrorist as well. . . his conviction for harassing whales and other sealife was the talk of Sydney's tony-set. Not a good look for a tourism industry geared to nature, the environment, and protection of wildlife.

Good luck Ned. Thanks for visiting. Don't come back.

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