May 28, 2018

Over the 20 plus years Johnson Property Group has been involved with Pitt Town, we have been the subject of a great many misleading comments which have circulated in the Pitt Town community. Our usual approach is to ignore them where possible. However, the current over-working of the rumour mill has led to us producing this letter to provide you with some facts around key issues currently impacting the people of Pitt Town.

As you would be well aware, Johnson Property Group has negotiated with a number of land owners to purchase and subdivide their lands. Before it could be subdivided, the land had to be rezoned which was a very lengthy and expensive process, paid for entirely by Johnson Property Group.

The government dictated that the zoning approvals paid for by Johnson Property Group had to cover the entire potential development area in Pitt Town, not just the lands in which Johnson Property Group had an interest. In fact, the rezoning has greatly benefitted 36 other landholdings (which we have no involvement with). While every one of those landowners reaped the financial benefits of the rezoning, all expenses and risks were borne solely by Johnson Property Group.

Johnson Property Group has been required to invest many millions of dollars into Pitt Town (details of which are outlined below). The result has been a vast improvement in services for all residents and a major increase in property values for every person who owns land in any part of Pitt Town.

It is no secret that Johnson Property Group was hit extremely hard by the global financial crisis in 2008/9 and I had to make the tough decision to appoint a company administrator. We very nearly went to the wall which would have been the end of our vision for Pitt Town. To avoid that, I had to make some tough decisions, including selling my real estate office in Castle Hill to fund the delivery of infrastructure in Pitt Town. With the value of properties in Castle Hill today, I would have been better off financially holding onto it and walking away from Pitt Town. However, by that stage, I’d already invested more than a decade of my life into our plan for Pitt Town. I’d met some remarkable people and entered into agreements with them which would change their lives significantly for the better. I knew what we had planned for Pitt Town would positively impact on the property values for every existing resident – whether they were for or against me – and each and every one of them would benefit significantly from the improvements in services. So, I dug in and weathered the near-financially-fatal storm of the Global Financial Crisis and, I’m pleased to say, came out the other end relatively intact.

I’m extremely proud of what I and my team have achieved in Pitt Town. I literally risked everything for this development. Delivering what we have has involved a major investment of time and an enormous amount of personal sacrifice and financial risk – a risk borne entirely by me. At no time have any of the landowners I’ve partnered with have, or those I haven’t partnered with, been at risk of losing anything in order to secure the rezoning approvals and deliver the buried infrastructure necessary to kickstart the project.

Yes, I have gained a lot but it was a huge gamble and this is one of the reasons I am frustrated when people slander what we have achieved and other landowners expect a free ride (particularly, of late, in regard to Pitt Town Water) on the back of the enormous investment and risk we have taken.

The following is an outline of what we have put into Pitt Town and answers to some of the current most pressing issues. If you have any questions regarding any of the content, please feel free to contact my office at any time – details are supplied at the end of this letter.

WHAT HAS JOHNSON PROPERTY GROUP DONE FOR PITT TOWN?

It is human nature that we take for granted things we can’t see but both the new and old residents of Pitt Town have benefitted greatly from more than $41 million in buried infrastructure installed by Johnson Property Group. In fact, Johnson Property Group is the only entity to have funded and delivered infrastructure in Pitt Town.

When Johnson Property Group commenced the Pitt Town project, the lack of supply and security of services into the village meant we had to fund and deliver all of the following infrastructure:

Infrastructure Delivered Cost
Design, approval and installation of 7.5km of major underground electricity feeder mains from the Windsor Zone Substation from Macquarie St, Windsor to Bathurst Street, Pitt Town. Power supply issues and outages were a problem in old Pitt Town. This investment in high-voltage electricity supply has addressed that problem for both old and new Pitt Town. Approx. $7million
Design, approval and installation of 6.5km of major drinking water transfer mains from Windsor,Road, McGraths Hill to Bootles Lane, Pitt Town. This has increased water capacity and security of supply, and improved water pressure for every home in the village. Approx. $4.2million
Design, approval and installation of new Hawkesbury City Council sewer pump station and rising main to McGraths Hill Wastewater Treatment Works, including diversion of existing Pitt Town village sewer (which was starting to fail) to the new pump station. All sewerage from the original village is diverted into this new system (we built the pipe connecting the old system to the new). The first 80 lots developed by Johnson Property Group are also serviced by this system. Approx. $10million
Delivery of Flow Systems sewer and recycled water facility (under WICA license). This does not include the internal servicing of lots which is an additional cost. Approx. $15.35million
Construction of stormwater basin infrastructure at Bona Vista, Fernadell and Blighton (facilities dedicated/gifted to Council) and completion of temporary basin in Cleary precinct (pending Council acquisition of Thornton landholdings) Approx. $2.5million
Future stormwater basin works relating to Wells Street drainage works and temporary sediment basin works on 44 Mitchell Road (required per executed Works in Kind Agreement) Approx. $1.97million
TOTAL INVESTMENT IN PITT TOWN INFRASTRUCTURE Approx. $41million

While this $41 million investment in Pitt Town benefits all residents and developers/landowners, the costs were borne by Johnson Property Group alone. When spread across the 621 residential lots we have developed to date, it equates to more than $66 000 per lot.

Other benefits to the people of Pitt Town include:

Dedication by Johnson Property Group of approximately 1.35ha of land adjoining Pitt Town Public School to the State Government under its Voluntary Planning Agreement (VPA) with the State Government. Refer to the section below on the VPA for other contributions which have benefitted the community.

Johnson Property Group constructed Bootles Lane and upgraded parts of Fernadell Drive, Stables Street, Hall Street, Wells Street and Hawkesbury Street.

  • Dedication by Johnson Property Group of approximately 1.35ha of land adjoining Pitt Town Public School to the State Government under its Voluntary Planning Agreement (VPA) with the State Government. Refer to the section below on the VPA for other contributions which have benefitted the community.
  • Johnson Property Group constructed Bootles Lane and upgraded parts of Fernadell Drive, Stables Street, Hall Street, Wells Street and Hawkesbury Street.
  • Transfer of land parcels to Hawkesbury City Council including:
    – Bona Vista Reserve – 1.36ha
    – Bona Vista Passive Open Space – 1.32ha to establish Bona Vista Park. The park was also embellished by Johnson Property Group prior to handover. As the owner of the land the upkeep of Bona Vista Park is now Council’s responsibility.
    – Bona Vista Basin – 0.81ha
    – Fernadell Active Open Space – 5ha*
    – Fernadell Community Centre – 0.43ha*
    – Part of Blighton Riverside Park (1.607ha) will be transferred to Council in the near future.

* Johnson Property Group transferred the land intended for the Pitt Town playing fields and community Centre to Hawkesbury City Council in October 2014. As Johnson Property Group and other developers have subdivided land, for each additional lot created, Council has been paid the required Section 94 cash contribution for the construction of additional facilities. It is now up to Council to deliver those facilities. Johnson Property Group has no control over how Council spends its Section 94 contributions.

WHY HAVEN’T THE BOAT RAMP AND CARPARK BEEN BUILT AND PUNT ROAD BEEN UPGRADED?

Johnson Property Group offered to build the boat ramp and carpark under our Part 3A Statement of Commitments. The money to build these elements was to come from the development of the final precinct in Pitt Town.

When the boat ramp and carpark were proposed in the Part 3A Concept Plan, Johnson Property Group had an interest in a significant parcel of land in that final precinct. This land is owned by another Pitt Town landholder and, due to the position they have since taken, Johnson Property Group won’t be developing that land at this point. The funding to deliver the public facilities that are the boat ramp and carpark was to come from our sales of that land. As we are no longer able to sell the land, the funds simply do not exist at this stage and, therefore, complete delivery of the Concept Plan is delayed.

It should also be noted, before the Development Application for the boat ramp can be progressed, Hawkesbury Council and the Department of Lands need to resolve a number of issues. Johnson Property Group has already secured the development consent and construction approvals from Council to upgrade Punt Road and install the carpark. However, as stated, Johnson Property Group can only complete the works if we can develop that additional land and deliver all components of the Part 3A Concept Plan.

WHAT SECTION 94 CONTRIBUTIONS HAS JOHNSON PROPERTY GROUP MADE?

Section 94 Developer Contributions are levies paid by developers to local councils. The levies are used to meet the demands of the new development. They fund the design and construction of local infrastructure to support the additional growth in population. The contributions can include a combination of land transfer, cash or works-in-kind.

For each lot developed at Pitt Town, Johnson Property Group has made Section 94 Contributions to Hawkesbury City Council. These contributions have gone towards:

  • Preliminary Investigation Plans
  • Land Acquisition
  • Community Facilities
  • Recreational Facilities
  • Park Improvements
  • Roadworks

Another $1.5 million was spent by Johnson Property Group to embellish Bona Vista Park and complete local roadworks.

The amount levied by Council on Johnson Property Group is in accordance with its Hawkesbury Section 94 Contribution Plan 2015 and, prior to that, the Pitt Town Residential Precinct Section 94 Contributions Plan Amendment. These levies are not negotiable.

WHAT ABOUT THE VPA?

Johnson Property Group’s Voluntary Planning Agreement (VPA) for Pitt Town is with the Minister for Planning, not Hawkesbury Council. All required funds under the agreement have been paid to enable investment in state and regional infrastructure.

Under several VPAs, Johnson Property Group has been solely responsible for:

  • Transfer of land valued at $2 million to Pitt Town Primary School
  • $800,000 for Environmental Contributions
  • $5.9 million for Roadworks Contributions
  • $106,000 for ten lots in Blighton Precinct
  • $576,270 for lots in Central Precinct Stages 1, 2 and 3

This equates to $9.38 million which, spread over the 621 lots Johnson Property Group is developing, equates to $15,108 per lot.

Other developers/landowners in Pitt Town have their own planning agreements with the Minister for Planning which require a contribution of $10,500 per lot. Only Johnson Property Group has been called on to make additional environmental and land dedication works.

WHY CAN’T EVERYONE TAP INTO PITT TOWN WATER?

Prior to delivering its first 80 lots in Pitt Town, Johnson Property Group constructed, on behalf of Hawkesbury City Council (in its role as sewer authority) more than $10.6 million worth of sewer upgrade works.

In 2009, Johnson Property Group decided rather than rely on Council’s sewerage services (which would require further upgrading at an additional cost of around $15 million), it was a better option to seek approvals and construct an innovative and sustainable “water factory” to treat sewerage locally and produce high quality recycled water for non-potable use within the community. The result was the establishment of the private utility that is Pitt Town Water.

Thanks to Pitt Town Water, only those initial 80 Johnson Property Group lots are connected to the upgraded Council sewerage system. So, the $10.6 million we paid to Council worked out to be $132,553 per lot for each of these initial 80 lots. This is well in excess of what others are expected to pay (current Section 64 Contributions are around $22,650 per lot).

Pitt Town Water Pty Ltd (a wholly owned subsidiary of Flow Systems) owns the private utility that is the sewerage treatment system at Pitt Town. The construction of both Stage One and Stage Two of the sewerage system was entirely funded by Johnson Property Group to ensure all current and future lands we release can be serviced by Pitt Town Water. In return for this investment, Johnson Property Group secured the asset that is the control of network capacity to ensure our current and future development could proceed. Simply, while Pitt Town Water owns the facility and the infrastructure, all of the spare capacity in the system is owned by Johnson Property Group.

If any landowner wants to connect to Pitt Town Water and share in this very significant piece of infrastructure, they are welcome to negotiate a commercial agreement with Johnson Property Group. A number of landholders and other developers have already entered such an agreement and, as such, they have been assigned some of the capacity owned by Johnson Property Group.

For obvious reasons, landholders cannot connect to Pitt Town Water free-of-charge and then go ahead and subdivide their land and reap all of the benefits without paying any of the costs.

It should, however, be noted, connecting to Pitt Town Water is not their only option for obtaining sewerage services to their land. Anyone who wants to develop land in Pitt Town can choose from one of three commercial options:

  1. As stated, they can enter a commercial arrangement with Johnson Property Group to purchase some of our sewer capacity in the Pitt Town Water system.
  2. As was the case when Johnson Property Group funded Stage One of the upgrade to Hawkesbury Council’s sewer network for our initial 80 lots, the landowner can provide funding to Council to undertake Stage Two of the upgrade. This would result in additional capacity they could then tap into. As per Council’s Section 64 Contribution Plan, the Stage Two upgrade is estimated to cost around $15 million.
  3. As Johnson Property Group did in establishing Pitt Town Water, they can choose to engage with an alternative service provider to secure WICA and IPART approvals to construct their own private plant to service their development/s.

It should be noted, Hawkesbury Council has not had to spend a cent on its sewer infrastructure in more than a decade. The investment by Johnson Property Group in both Stage One of Council’s sewerage works upgrade and in the establishment of the private utility, Pitt Town Water, is the sole reason the revitalisation of Pitt Town has been able to proceed.

WHAT’S PLANNED FOR THE RESIDUAL LAND IN BONA VISTA?

As most will be aware, there is a residual parcel of land in the Bona Vista Precinct off Bootles Lane. Of this 7ha block, 90 percent of it is vegetation and 10 percent has already been cleared. While the vegetated land is recognised as environmentally important Cumberland Plain Woodland Forest which should be preserved, neither Council nor the State Government is interested in having the lands transferred to them.

For this reason, Johnson Property Group put a rezoning proposal before Hawkesbury Council which, we believed, would have provided a sound conservation outcome and ensured the long-term protection of the vegetated environmental lands while keeping it in private ownership. The proposal sought to subdivide the land to allow three residential dwellings on the already cleared component while zoning the balance of the vegetated land to ensure its conservation. Two of the proposed dwellings were entirely cleared land. The proposal for the third dwelling would have seen it split-zoned so a residential dwelling could be built in the western, cleared area of the site with the remainder of the land zoned for conservation with covenants including weed management and conservation zone protection. The future owner of this lot would have had responsibility for maintaining the conservation land in perpetuity. This proposal was knocked back by Council, so we are now assessing alternative options.

There has been talk in the town that this land should become a park, but Council has made it very clear it has no desire to acquire the land for this purpose – particularly given Bona Vista Park is only a 220m walk away and the proposed Fernadell Neighbourhood Park and Sporting Fields are directly opposite. Another suggestion is for the entire site to be revegetated. Not only is this not commercially viable but it would bring the threat of bushfire much closer to the existing homes in the area, thereby increasing their Bushfire Attack Level rating and they have not been designed to accommodate the higher rating. In perpetuity ownership also remains unresolved.

A final point on this parcel of land, Johnson Property Group readily admits we constructed a 1.8m chainlink fence around the property without Council approval. We did so out of frustration at the illegal dumping of fill and rubbish on the site which was doing nothing for the ecological preservation. The fence also stopped trespassers who could endanger themselves or the community with illegal activity. We have recently lodged an application with Council for retrospective approval of the fence (which was seeks a reduced in fence height to 1.5m) and seeking approval for a single dwelling for which we already have entitlement. Under this application, the chainlink fence will be removed and replaced by a rural-style fence prior to the Occupation Certificate being issued.

WHAT’S HAPPENING WITH THE WELLS STREET STORMWATER BASIN?

The construction of the Wells Street Stormwater Basin has been under review by Hawkesbury Council for more than 15 years. Over that time, no less than four engineering reports on the design of the basin have been commissioned by Council and Johnson Property Group.

We have undertaken to construct part of the facility in lieu of Section 64 contributions and are ready and willing to deliver on that commitment as soon as we are given the green light. However, until Council issues the Part 5 Approval, and access to the land, our hands are tied.

We would have liked the stormwater basin to be operational well before now. Johnson Property Group and other developers in this precinct have had to establish their own temporary stormwater infrastructure in order to release any land for sale. This is obviously far from ideal. It has meant viable land lots (two lots in our case) have had to be used for the temporary drainage basins, the construction and maintenance of which is an unnecessary and non-recoverable cost for each of the developers. Additional costs will be involved in decommissioning the temporary basins and turning them back into saleable residential lots. The scattering of temporary basins also puts a blight on the landscape.

It should be noted, there is currently no legal way to drain water from the public road that is Wells Street to the 44 Mitchell Road site where the stormwater basin is to be located. In order for this to happen, Council needs to compulsorily acquire a strip of land and, to do that requires authorisation from the Minister for Local Government. We have been advised Council’s request has been with the Minister’s office since well before Christmas 2017.

Unfortunately, the Part 5 Assessment and issuing of a Notice of Determination relating to the public infrastructure stormwater drainage works is a matter for Council and Johnson Property Group can do no more than wait for the assessment to take place.

Johnson Property Group has prepared detailed briefing papers for Council and State Government Ministers on this and a number of other issues. If you would like a copy of these papers, please feel free to phone my office on 02 8023 8806 or email our Development Director, Bryan Garland on [email protected]

I trust this document has answered your questions regarding the work of Johnson Property Group in Pitt Town and laid to rest a number of inaccuracies circulating in the community.

Kind regards,

Keith Johnson
Managing Director
Johnson Property Group

Back to blog