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Centro's bid to stop rival

Wednesday, 2nd September, 2009

Centro Properties Group is threatening to take developer Leasecorp to court to stop it building a rival shopping centre on the former Globe Timber site.

Lawyers acting for Centro have told Leasecorp that the shopping centre giant believes the decision to grant development consent for a new complex is invalid.

"Our client is currently considering what actions it should take in respect of the Administrator's decision to grant the development consent ...", Sydney firm Gadens

Lawyers said in a letter to Leasecorp managing director, Steve Palyga. Law firm partner Anthony Whealy said this included commencing proceedings in the Land and Environment Court. City Council's Administrator, Ken Boyle, last month gave the green light to the shopping centre despite a recommendation from the Bankstown City Council that it be refused. A report from Bankstown Council, which was used to provide an independent assessment of the Development Application, said the proposed development failed to comply with the Environmental Planning and Assessment Act. It cited the site's "spatial separation" from the established retail area of Broken Hill, particularly the CBD, and the unacceptable economic impact on existing retail traders and spending patterns within Broken Hill. But Mr Boyle said the positive outcomes inherent in the project outweighed the negatives. In his letter to Mr Palyga, Mr Whealy said that Centro had until November 22 to decide whether or not to begin court proceedings. "Any work and/or expenditure that your company or its agents undertake from the date of this letter in seeking to implement the development consent will be done at your own risk." Mr Palyga said yesterday he was disappointed that Centro was considering legal action to "preserve its monopoly" in Broken Hill. He said it was unreasonable to expect Leasecorp to put the project on hold for three months while Centro decided whether it was going to commence court proceedings. "It is very disappointing that this letter is saying 'we've got three months to make a decision and don't you dare to anything'. "We cannot accept that situation ... we want to get on with this." Mr Palyga said that he had already contracted some of the demolition work and the project was incurring costs on a daily basis. He said Leasecorp was granted consent to proceed with the development and if Centro had a legitimate claim it should "get on and do something about it and don't threaten us". The shopping centre, which will feature a Coles Supermarket, is scheduled to open in early 2011 and Mr Palyga said any delay would obviously benefit Centro and its tenants which include Woolworths. "There's no doubt that any delay will significantly benefit Centro. "Once you've got ferocious competition between (retailers) that must have an affect on prices." A spokesman for Centro said it had objected to the proposed shopping centre from the beginning and that the involvement of lawyers was the next logical step. He said litigation was not unusual in the "development arena", and Centro would often go down that path "when we feel there's enough retail development in an area."

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