THE City of Melville could reap close to $11 million from an in-principle agreement with Satterley Property Group (SPG) to convert the remaining 2.6ha of the former Carawatha Primary School site into a 140 dwelling residential development.
The proposed joint venture contains a mixture of townhouses, duplexes and three or four-storey apartments, as well as a dozen premium vacant lots next to Carawatha Park.
The City is also investigating keeping a small part of the land for the construction of a childcare centre.
Under the agreement, SPG would pay the City of Melville a $6.5 million project participation fee.
With an estimated project cost of just more than $47 million, including land value, the development is expected to return around $56 million.
Any eventual profit would be split equally between SPG and the City and if the projected net profit of just under $9 million is accurate, the project would fetch the City close to $11 million in total.
In a council report, officers said there was a shortage of both townhouses and multi-level developments in Willagee.
“It is considered that market demand will exist for high quality product in a unique parkside location and it is a suburb with continued strong value growth potential,” the report said.
“The depth of market demand will need to be tested, however an advantage of the concept design allows for prudent staging of apartment development and/or provision of alternate townhouses on these sites should depth of apartment demand be shallower than anticipated and/or townhouse demand exceed expectations.”
The City of Melville bought the former primary school site on the corner of North Lake Road and Archibald Street in June 2006.
One third, or close to 1.3ha, has already been developed as public open space at Carawatha Park.
Melville councillors voted unanimously last month to advertise the proposal’s business case for comment.
It can be viewed online at www.melvillecity.com.au/planning-and-building/planning/community-consultation