By Robin Howells
in Melbourne

VICTORIA'S Liberal government headed by Rupert Hamer is locked in a battle with a private firm over who should develop a one acre block of land in Melbourne's golden mile.

   The land, estimated to be worth at least $6.5 million, is owned by Zeus Nominees Pty Ltd. It is adjacent to the Museum station site for Melbourne's underground and is in the block bounded by Swanston, Latrobe, Elizabeth and Lonsdale streets. The site is mainly occupied by old, rundown buildings.

   Following a request from the Melbourne Underground Rail Loop Authority (MURLA), and the Melbourne city council, George J. Connor & Associates produced a report on the development potential of the block.

   The report, presented in august last year, said: "There is no central city block in Melbourne or in any other major Australian city that has greater scope and need for planned redevelopment over the next 5-10 years."

   It has been estimated that the Museum station will bring 50,000 people a day into the area. The report predicted that the block would generate redevelopment of more than $200 million.

   Zeus Nominees Pty Ltd started to acquire properties in the block in 1972. They managed to consolidate 23 properties in a site of just over one acre. But since then Zeus has been unable to get permission to develop the land.

   Zeus wrote to transport minister Ray Meagher and local government minister Alan Hunt. The state government declared the area an investigation area on february 22, 1974. Hunt commissioned the Town and Country Planning Board to report in 12 months time.

   The Town and Country Planning Board sat on the job for four months without doing anything, until complaints by landholders in the block became so intense that the government set up a steering committee in late july with representation from MURLA, the MCC, the Town and Country Planning Board and the board of works.

   The committee's finished report went first to Hunt, then to a cabinet subcommittee comprising Hunt, Meagher, and attorney-general Vernon Wilcox.

   The report, which was released last wednesday, recommends that the whole of the investigation area needs controlled development and that it be declared a designated area pursuant to the Development Areas act. This effectively freezes all land development and speculation in the area for two years.

   In the meantime Zeus have advertised their land for auction on april 23. They have advertised worldwide.

   When the Connor report was presented last august it was estimated that the Zeus site was worth $4.2 million. Today it is estimated to be worth $6.5 million. If the government decides to purchase or compulsorily acquire the Zeus owned land, where will they get the money from?

   The state of Victoria is now committed to a loop system for an underground which, Victorian cabinet members have confided to close friends, is going to cost in excess of $600 million. The original announcement of the cost of the underground in 1970 was $80 million. The cost is to be shared three ways with the state government paying 50 percent, the Melbourne city council and the board of works contributing 25 percent each.

   The federal Labor government looks upon the Melbourne underground as being a massive misallocation of resources and has shown no interest in financing such a fiasco. It is totally opposed to the idea of providing finance for an underground which will improve the value of properties held by developers.

   The Melbourne loop project was entered into without any cost benefit analysis taking place. This was despite the visit of transport minister Meagher to Canada in 1967 to study the Toronto loop system.

   Toronto built its loop for nothing. The city did this by purchasing all the available land around the loop and then selling all the land back at increased prices because of the new business brought into the area by the loop. When it sold the land back to redevelopers it made huge profits.

   The Melbourne city council has said that it can't meet its loop payments for this year. If the MCC increases its rates substantially to pay the increasing amounts due on its share, the council will drive firms out of Melbourne into the lower rated surrounding areas.

   Lord mayor Ron Walker points out that it is the people who are going to use the loop least who are going to have to pay for it. He says that loop is an integral part of the railways metropolitan transport system and that an undue share of the cost is being put on city dwellers and land owners.

   Rupert Hamer has to bear a lot of the criticism for the problems now associated with the loop. When he was minister for local government, Hamer was involved in a lot of the initial decision-making over the loop. It was Hamer who promised father Negry of the nearby St Francis church that under no circumstances would the church area be placed under investigation. However, subsequently it was.

   The three major land developers in the designated area are Zeus Nominees Pty Ltd, the Australian Development Corporation Ltd and Downtown Car parks Pty Ltd.

   Zeus Nominees Pty Ltd has two shares on issue held by the directors, Frank W. Jones of North Balwyn and Joseph A. Santa Maria of East Oakleigh. Guarantors of the comapny's mortgage include David Pethard of South Yarra, and his company, Arax Investments Pty Ltd; Leslie Nagy of Sydney and his company, Nagy Investments Pty Ltd; Solomon Lew of North Caulfield and the Lew family's Voyager Holdings Pty Ltd and SL Nominees Pty Ltd, Lawrenny Pty Ltd, Kenallan Pty Ltd and Vanguard Ltd.

   Downtown is over 90 percent owned by Hoddle Holdings Pty Ltd which is almost equally controlled by Gordon D. Banfield and sir Maurice Nathan of Paterson's, the furniture retailers. Australian Development Corporation Ltd is about 57 percent owned by the family company of the chairman, Sidney Fischer of Sydney.