AMP Society v Chief Executive. Department of Lands [1994] QLC 207

LAND COURT BRISBANE 20th MAY, 1994 Re: An appeal against a determination of unimproved value Shire of Albert - AV93-333 AMP Socie ty v. Chief Executive. De partment of Lands DECISION AMP Society is the registered proprietor of the Pacific Fair Shopping Centre situated at Hooker and Sunshine Boulevards, Broadbeach. The Department of Lands assessed the unimproved value of this land as at 31st March, 1992, in the amount of $37,000,000 (Thirty Seven Million Dollars). The real property description is Lot 11 on RP 151506 and Portions 483, 484 and 485 on WD 5579, Parish of Numinbah, containing an area of 16.68 hectares. The Society appealed against the valuation, estimating, in the Notice of Appeal, an unimproved value of $25,000,000. Valuation evidence for the appellant was called through Mr A.J. Crawford, registered valuer. His final valuation calculation was in the amount of $22,000,000. Mr Crawford in his written report said - " Pacific Fair is an international standard shopping destination and is the largest Regional Shopping Centre in Queensland. The centre . is anchored by a four-level Myer Department Store, the largest outside an Australian Capital City. The centre comprises a number of separate building areas connected by paved open malls. The existing centre opened in August 1977, was extended and enhanced in 1982 with Myer opening in September, 1982. Further extensions to the centre were commenced in late 1989/1990 and completed in October, 1992. The centre is now regarded as being developed to its maximum potential. Gross rentable area: 86,276 sq.m." [1994] QLC 207 -- 1 of 21 -- .. 2 It is basic to Mr Crawford's approach that evidence of value for land with potential such as the subject, must be obtained from within a similar category of real estate - i.e. land with potential for development as a regional shopping centre. He holds the opinion that, while it is a necessary valuation procedure for comparisons to be made from one site to another, the comparison process requires specific consideration of the criteria which influences market value before adoption of a valuation on a unit of area basis. Mr Crawford discussed the factors which affect the market value of this category of real estate, such as the size and optimum development potential of the site, the type and cost of building construction complementary to the site, the optimum rentable area indicated by the socio economics and population of the particular trade area, the consequent moving annual turnover potential, and finally the rental return available to the investor in such a development. He considered the potential rental return (if it is able to be established) to be the most important criterion as the optimum return embraces each facet of market criteria. Mr Crawford's research indicated to him that the best evidence of value available in the assessment of the unimproved market value of Pacific Fair, was the sale and partial resale of a site of regional shopping centre status at Browns Plains, on the Mt. Lindesay Highway (Beaudesert Road) in Logan City, adjacent to the south-western boundary of Brisbane City. He saw his analysis of this evidence as then being supported by the sale of land at Capalaba to the east of Brisbane City. Brief details of these sales were: -- 2 of 21 -- 3 "(1) Browns Plains Date: 24th November, 1992 Area: 28.2 hectares Price: $12.65 million ($448,600/ha) plus Date: 2nd March, 1993 Area: 1.038 hectares Price: $1.0 million Total: $13.65 million ($466,900/ha) (2) Browns Plains Date: 28th June, 1993 Area: 16.647 hectares Price: $9.0 million ($540,600/ha) (3) Capalaba Date: February 1992 Area: 16.63288 hectares Price: $4.5 million" Mr Crawford had concluded that Sale (2) which land was part of Sale (1), was the more appropriate of the Browns Plains sales evidence. Although well subsequent to the relevant date and on a rising market, Sale (2) in the absence of better evidence, provided criteria which in his opinion made objective comparison with Pacific Fair, possible. He had been closely involved, as an adviser to the purchaser, in the negotiations which resulted in Sale (2), being effected. In fact, Sale (2), represented the land content involved in a transaction in which the vendor contracted to construct a shopping centre development comprising a gross rentable area of 34,098 sq.m. This was made up of two discount department stores totalling 13,600 sq.m ., two supermarkets totalling 8,400 sq.m., a major tenancy of 1,150 sq.m. and specialty shops of 10,948 sq.m. -- 3 of 21 -- 4 Car parking was to be provided for 2,000 vehicles. The standard of construction proposed was, in Mr Crawford's opinion, no less than that which existed at Pacific Fair. The contract for the land component involved a deferred payment arrangement. The total land contained in Sale (1) required significant site works and infrastructure expenditure. It appears that part of this cost was to be included in the development contract and Mr Crawford saw the need to apportion the site development cost between the 16.647 hectares of Sale (2) and the original 28.2 hectares in Sale (1). This allowed a "site improved" comparison to be made on a "like with like" basis with Pacific Fair as "site improved". According to Mr Crawford the overall contractual arrangements between the vendor and purchaser of the land in Sale (2), involved an initial net rental guarantee, on completion of the development, amounting to $8,917,159 per annum. What were described as binding lease agreements had been negotiated for the major tenancies and the rental guarantee incorporated an equivalent full occupancy of the specialty shops for the initial two years. Mr Crawford considered that included in the sale price of the land, was an "added value" for the tenancy guarantees. He interpreted previous Land Court decisions, in one matter relating to the analysis of a developed and leased investment property and in another, comment on a hypothetical development approach, to support his opinion in that regard. More will be said of that later. Mr Crawford's analysis of Sale (2) was as follows: -- 4 of 21 -- 5 Contract Price - $9m - Interest to be paid at 2% over 90 day bank bill rate (6.48%) during construction of shopping centre Present value of $9m in 16 months @ 8.5% annual - adopt Plus allowance for site improvements $3,700,000 $8,070,000 $7,000,000 $15 ,070,000 Less added value of tenants Majors - 1 year's rental Specialties Year 1 Year 2 $945,000 $315 ,000 $1,260,000 $4,960,000 $10,110,000 Less allowance for future development potential Present value of $3m in 10 years @ 13% Say $880,000 $9,230,000 $9,200,000 The guaranteed net rental was $8,917,159 and the sale was analysed to show a "site improved" value equivalent to 1.032 times the net annual rental. Based on the indicated value of the total site with site works completed (before deduction of the future development potential) Mr Crawford summarised his analysis as follows: Land Area - Gross Rentable Area - Population - Moving Annual Turnover - Sale 3 $607,000 $296.50 p.s.m. $124/head of population 12.9% The Capalaba sale, according to Mr Crawford, reflected a different -- 5 of 21 -- 6 development (department store based centre of 40,000 sq.m.) than was subsequently proposed. "The original development included a department store. Due to the changed proposed development, we have also only regarded this sale as supporting the preferred evidence" (Sale (2)). Again Mr Crawford had obtained details of the original development proposal, the infrastructure expenditure required to bring the site to an improved condition ready for development. The sale was on a deferred payment basis and the cash price equivalent was calculated. In his analysis he deducted both the value of "secondary sites suitable for immediate development" and "potential for future expansion" together with "an allowance for advanced negotiations with Coles for a DDS of 7,100 sq.m.". Mr Crawford's analysis was as follows: Contract value ($4.5m deferred) Site works Less value of secondary sites Less potential for future expansion Less allowance for advanced negotiations Rental Land area Gross rentable Population not available $698,000/ha $267.50 $108 $4 ,100,000 $9,700,000 $13,800,000 $2,000.000 $11,800,000 $800,000 $11,000,000 $300 ,000 $10,700,000 It is observed that Mr Crawford's approach to the "gross rentable" criterion -- 6 of 21 -- 7 is inconsistent with the approach adopted with the Browns Plains sale (calculated there before the allowance for future expansion). No detail was provided in support of the allowance made for the valuation of the secondary sites, or the exclusion of those areas from the initial proposal for regional centre development. As I understood Mr Crawford's evidence, the Capalaba sale was seen as lending support to the land area component, deduced from Sale (2). Mr Crawford, after commenting on the sales evidence said: "Our investigations have then proceeded to determine the best method to analyse the difference between the comparable sales and the subject property. To this end we have had regard to rental, site area, population and MAT and we have concluded that rental is the correct approach provided that the proposed development is of a similar standard in construction costs." Mr Crawford's approach was to apply the Browns Plains Sale (2) analysis of rental return factor directly to the Pacific Fair site. He recognised that the location of Pacific Fair resulted in higher rent levels being achievable, particularly for specialty shops, but it is critical to his valuation approach that once the market rental potential is established, the various degrees of difference from one site to another are equalised for comparison purposes. While the logic behind his theory is understood, there is no market evidence provided to support that contention. For it to be correct, the investment market would perceive that the Pacific Fair site, recognised by him as an international standard shopping destination, as equating a "rent level/site improved value" factor equivalent to the Browns Plains regional centre located in a Brisbane/Logan City residential growth area. On that assumption Mr Crawford adopted a market rental assessment for -- 7 of 21 -- 8 Pacific Fair which it should be said, is somewhat higher than actual rental ($30,064,517 compared to $27,452,210 being the actual rental as at December 1992); calculated the net rent and then applied the analysed "rent/site value" factor from the Browns Plains sale (1.032). This resulted in his assessment of the Pacific Fair land value site improved. From that amount was then deducted the estimated costs of filling, revetment wall construction, interest on construction and holding costs. This is the calculation : " Financial Analysis Net Rental Analysed ratio based on rental at Browns Plains (1.032 X $28.3m) Land Value site improved Less: Fill 533,000 m 3 @ $6.00 (Note 1) Revetment wall 450 lin m @ 3.5 m height @ $270 psm Plus fees @ 9% Interest for six months development (half estimated period ) @ 9% Rates and Taxes (.5 year Pacific Fair 26c on $20m) Plus interest on land during development phase 3,198,000 425,000 3,623,000 326,000 3,949,000 89 ,000 4,038,000 2,600,000 6,638,000 $28,300,000 $29,200,000 (6 months) ($29,200,000-$6,638,000=$22,562,000) 1,015.000 7,654.000 21,546,000 Adopt $22.0 million -- 8 of 21 -- Note 1: 9 The $6.00 per cu .m. has been calculated as follows :- Cost of pump fill Royalty Environmental Risks Contingency Adopt $3.20 $2.20 $ .40 i...:l.Q $6.10 $6.00 II Mr Crawford had obtained the cost of filling from engineering sources. He was not aware of the actual procedure adopted for the original filling of the land. Similarly the estimate of the cost of construction of the revetment wall had been obtained from an engineer. Mr D.J. Crane, the consulting engineer who had supervised the design of the revetment wall, was called to give evidence for the appellant. The cost of the actual wall as constructed had been estimated by quantity surveyors based on the engineering drawings and as at the relevant date in this matter. Mr Crane's evidence was that the wall was designed to provide a clean face for the tidal movement of the water level against the concrete wall and to retain the filling material placed on the site. To the best of his recollection, when it had been constructed · in about 1975, the wall had not replaced any previously constructed retention of fili material. He interpreted the plans as showing "a grade from the fill level down into the creek". Mr Crane said that the construction of the revetment wall was part of the overall development design which included road works up to the wall. In his opinion optimum use of the site by filling would have required the provision of the revetment wall. The remaining evidence for the appellant was given by Mr J.H. Apted, a valuer employed by the appellant. Mr Apted confirmed that the details contained -- 9 of 21 -- 10 in a tendered tenancy schedule for Pacific Fair, including market rental assessments, details of outgoings and vacancies, had been prepared by him as part of an exercise in conducting an asset valuation as at December 1992. the details relied on by Mr Crawford in his adoption of net market rental were obtained from that schedule. Mr Apted would not be drawn into discussing his opinion as to the improved capital value of Pacific Fair, for the reason that he saw the question of improved market value to have no relevance as to the matter before the Court. It is observed that, when there is a general lack of evidence as to sales of regional shopping centre sites, some consideration of the improved value might have been of some assistance to the appellant Society in its decision to contest the quantum of unimproved value. Valuation a pp ealed against Mr AL. Nobes, registered valuer, was called by the Department of Lands to give valuation evidence. He had not been the valuer originally responsible for the valuation appealed against. Indeed, it was his evidence that while he had compiled a report and provided a basis to support the valuation, he had formed the opinion that a valuation in the amount of $37,000,000 was significantly too low. His basis for saying that seemed to relate to what he saw as a disproportionate land component in what he would have expected the improved value of Pacific Fair to be. This opinion was reinforced by his perception of correct relativity with departmental valuations of other property at the same date. Mr Nobes saw it as relevant that the valuation had remained unaltered since 31st March, 1990, at which date the valuation had increased from $30,000,000 as at 31st March, 1989. In his mind it was illogical that, during the -- 10 of 21 -- 11 period from 1990 when the appellant had seen fit to significantly redevelop Pacific Fair, a property which the Society obviously highly regarded, it should seek to have the valuation reduced. Mr Nobes provided what he described as "basic sales evidence" but he left the impression that his valuation considerations were directed more to establishing that the value of the land had not fallen since 1990. The evidence which he considered to be of assistance was provided by the sales of two Gold Coast region sites, subsequently developed with neighbourhood shopping centres. Both sales were in December 1992, subsequent to the relevant date of valuation. There was no disagreement between the valuers that there was a dearth of evidence of a strictly comparable nature closer to that relevant date. The first sale was of a "Local Business" zoned site of 2.887 hectares in Bermuda Street, Mermaid Waters, which was analysed to show an unimproved value of $4,821 ,000 or $167 per sq.m. and which well supported the earlier (31.3.92) Department of Lands valuation of $3,700,000 or $128.20 per sq.m. This sale land was considered to be situated in an inferior location with inferior exposure and access and possessing inferior development category potential to the subject land. The second sale was of a site of 2.161 hectares, zoned "Special Facilities", in Cayuga Street, Nerang, analysed to show an unimproved value of $2,895,500 or $138.80 per sq.m. The earlier Department of Lands application of value was $3,200,000 or $148.10 per sq.m. Mr Nobes was not concerned that the sale price was at a slightly lower level. This site was located in a commercial precinct and had exposure to the Pacific Highway but was not readily accessible off the -- 11 of 21 -- 12 highway. He saw the access, site and locality as inferior to Pacific Fair. Mr Nobes agreed under cross-examination that, all other things being equal, it would be expected that a smaller site would sell at a higher unit of area value than would a larger site. He firmly held the opinion however that the larger subject site with much superior location and development potential was significantly more valuable on a pro-rata basis than either of the sale lands. It was his opinion that while the only local sales evidence was not ideally comparable, it was less prone to error to draw comparisons from local evidence, rather than from other localities such as Mr Crawford had done. He was not convinced that the Browns Plains sales evidence was of any assistance, if for no other reason than that he saw the Pacific Fair site to be vastly superior. He was not convinced that Mr Crawford's Sale (2), the resale of part of the Browns Plains site, could be regarded as being at arm's length to provide market evidence, when the parties were further involved in the development and rental guarantee arrangements. One of the considerations of Mr Nobes was the valuations applied by the Department to other lands, described as "comparable properties", as at the same relevant date. These examples included the "The Pines", Elanora sub-regional centre of 8.642 ha valued at $15,000,000 ($173.57 per sq.m.) which he saw as "definitely inferior"; the Casino site, Broadbeach Waters, 6.012 ha, described as a site which required extensive site works, with inferior access and exposure and although comparable in many respects as land, had been valued on a residential basis at $11,000,000 ($182. 96 per sq.m); Garden City Regional Shopping Centre at Mt Gravatt, 24.89 ha valued at $41,000,000 ($164.72 per sq.m.) (on the -- 12 of 21 -- ' . 13 evidence subject to appeal) described as a "larger site in inferior locality which does not enjoy the superior attributes" of Pacific Fair; Coles Myer, Chermside Regional Shopping Centre, 12.96 ha, $18,000,000 ($138.88 per sq.m .), which had required extensive site works and was described as being in "inferior locality and as with Garden City is located within an extremely competitive marketplace". Mr Nobes' verbal evidence was that the reference to competition at Garden City and Chermside was not intended to convey an impression that Pacific Fair was located in a less competitive marketplace. The Department of Lands valuation of the Pacific Fair site was calculated as follows: Site Value: 166,800 m2 @ $240/m 2 - Less: Fill 533,000 m3 @ $6/m 3 Revetment Wall 450 m @ $350/m Rounded to $40,032,000 $3 ,198,000 $ 157,500 $ 3,355,500 $36,676,500 $37,000,000 The Department's assessment of the added value of fill was explained by Mr Nobes "to include an amount for interest and fees over the development period". He said, "I'd be of the opinion that normally with canal fill you'd be looking somewhere around the $3.50 mark for just the actual fill itself, so obviously we have increased that to take into account some sort of allowance for interest and fees, etc." He personally had no knowledge of any royalty having been paid for the original filling. Mr Nobes agreed that included in the $6 would -- 13 of 21 -- 14 be no allowance for holding costs such as rates and taxes , or interest on the land during the development period. He accepted the premise put to him by the advocate for the Department that such holding costs would overlap the period for "normal development or approvals". Regarding the revetment wall , Mr Nobes had discussed the original development with a senior valuer with the Department who had been involved in investigations concerning the property at about the time of its original development. That officer "had taken notes etc. and had extensive discussions with engineers". Mr Nobes had formed the opinion that "there was simply a canal wall in place since around 1972 when the property was being filled". The wall now in place, as he understood it, "was subsequently constructed in 1976 and for what reason I am unsure at this stage". Matters re quiring consideration The physical condition of the site: Both the Department of Lands and the appellant quite properly adopted a valuation approach which involved initial consideration of the site value of the land as it existed in the local environment with all external infrastructure in place and in its filled condition. On this basis comparisons are possible with other land including sale lands on a "like with like" physical basis. That basis, it seems to me, must envisage land in such physical condition as would allow the highest and best use of the land to proceed. For example, in the hypothetical situation of two sites having identical highest and best potential use, with similar optimum development, both sites would be expected to have similar unimproved value except if development costs varied. -- 14 of 21 -- Site Develo pment Costs Filling: 15 The Department's allowance for fill is $6 per m 3 "all up". That estimate is based on the original method of filling employed - pump filling . It appears, at least part of the fill material was obtained by widening of an original creek to form the existing canal. The estimate which was carried out on behalf of the appellant as to the cost of pump filling as at the relevant date included an amount payable for royalty and an allowance for environmental risks. In the submission that the value of the fill should ignore any royalty and associated costs not borne by the original developer, the Department sought to rely on the judgment of the Land Appeal Court in Valuer-General v. Alfred Grant Estates (Surfers Paradise) Pty Ltd (1966) 33 C.L.L.R. 1. There is no dispute between the parties that the original method of filling would have been by pumping from an original creek or watercourses. The Department's submission was that in the filling process the creek adjacent to this land was widened and no royalty was or would have been payable and, as a consequence any royalty cost which might have been applicable at the subsequent relevant date of valuation should be ignored. I am unable to agree that the Alfred Grant judgment (supra) supports that view. The Land Appeal Court did state at p.7 in establishing the value of fill in that matter "when a development scheme is put into operation, involving the filling and top-dressing of large areas of country, and the work is carried out as one operation, the cost of developing one unit, whether an acre or a perch, should be assessed on the contractor's price, which is applicable to the -- 15 of 21 -- 16 whole of the area being developed." (emphasis added). Then, it continued at p.8, "Accordingly we think the cost of filling and top-dressing the appeal land should be based on actual cost which in this case showed no variation between the date when the work was done and the relevant date" (again, emphasis added). The Department's submission here was that the creek was widened. I am asked to accept that, if the same filling operation as originally occurred, i.e. pumping fill gained by deepening and widening a creek or creeks to fill adjacent lands and to form canals, no royalty charge would be payable. There is no proof before me, one way or the other, as to royalty payments, to the relevant authority, at the time or original development. The evidence is, however, that if such method of filling was to be effected at the date here relevant, royalty would be payable, at least for the fill gained from the tidal watercourse. Any question as to the control of land involved in the widening of that watercourse, remains unanswered. I can only assume that, as opposed to the facts relevant to the Alfred Grant matter, the contractor's costs here would have varied, not only by inflationary forces, but the requirement now for the payment of royalty to conduct such a pump filling operation. I will therefore allow the filling cost as assessed by Mr Crawford on the engineering advice be obtained. Revetment Wall Again there was the submission that the original filling was retained by a lesser structure than was subsequently erected as part of the development of Pacific Fair. As I understand the Department's submission, the revetment wall as it now exists is considered to be of a structural nature and should not be seen as -- 16 of 21 -- , . 17 a site improvement. There was also a suggestion that the revetment wall might have been designed to assist in the berthing of vessels. Again I am unable to accept, particularly on the engineer's evidence, that the primary purpose of the wall as constructed is other than to protect waterfront land and to provide the maximum surface area of usable land required for the optimum development which has taken place. I am not convinced that the Department's process of comparison or basis of valuation envisages anythirm different. If the land was developed with any lesser revetment structure it seems to me additional site works would need to be accepted as being necessary or alternatively the optimum development potential of the site would be reduced. I will adopt the replacement cost of the wall as assessed by Mr Crawford again on the engineering advice that was sought and proved. Holding Costs It was the submission of the Department that if the site was to be considered in its unimproved state, as having the agreed highest and best use potential as developed, there would be the need for a developer, as an initial starting point, to obtain the various development approvals. There would then be unavoidable holding costs involved for a period which would overlap or run with the period necessary to bring the site to a physical condition equivalent to "site improved". It is accepted that delays and holding costs would be involved in that process, but those costs are associated with the total development. The purpose of the valuation exercise here, as I understand both parties to have adopted, was -- 17 of 21 -- ... 18 to create a physical condition for the site allowing it to be compared with other lands. An unimproved site with similar use potential, requiring no further site enhancement would be and is the ultimate physical condition for comparison purposes. That hypothetical site, as unimproved, while having potential for development, in this exercise, would not have approvals in place. Holding costs would occur while approvals were being obtained and until the development was completed. While there is some logic in the practicality of the Department's submission, it assumes that a developer would proceed to a "site improved" stage of construction before optimum development approval had been obtained. I find that approach, in a statutory exercise designed for revenue gathering purposes, to place an unimproved site requiring extensive earthworks at a disadvantage in comparison with a site requiring no such initial development. I will allow holding costs based on a site works development period of six months. Rates and taxes as budgeted in the Pacific Fair rental schedule which was tendered, will be adopted rather than Mr Crawford's calculation which is seen to be erroneous. (It appears that his final calculation (as altered in Court) relied on a typographical error being 26c in the dollar, rather than 2.6c.) Land Value im proved by site works: There is seen to be some merit in the exercise conducted by Mr Crawford in his attempt to make some cogent use of the best sales evidence he saw to be available, particularly as he had some in-depth knowledge of that transaction and the development proposal. However, I am unable to agree with his proposition that the "added value of tenants" should be seen to be contained within the sale price of the land as a separate entity. -- 18 of 21 -- f '~ II 19 In the context of the Browns Plains sale, and the Land Court decisions which Mr Crawford quoted, it seems to me that the attraction to an investor of tenancy arrangements or rental guarantees, relates to the value of the completed development, where land and improvements lose their individual identity becoming integral components of improved land. The meaning of "value of improvements" has a statutory interpretation in terms of the Valuation of Land Act 1944 which might be more relevant to the statement of Griffith C.J. in Morrison v. Federal Commissioner of Land Tax (1914) 17 C.L.R. 498 at p.503, and as quoted by Mr. Crawford: "Any operation of man on the land which has the effect of enhancing its value comes within the definition of 'improvement'." Although given every opportunity to consider Mr Crawford's approach to "added value of tenants" as I understood his evidence, Mr Nobes did not disagree in principle, but had reservations about the basis of calculation of the quantum. Nevertheless, the result of negotiation of tenancy agreements for a shopping centre development, in my opinion, should not be considered as being a component of land value in the absence of structural improvements whether existing or proposed. It seems to me that the willingness of a potential tenant to enter into a lease agreement, is no more than a reflection of the potential of the land for development to the standard of a particular proposal. The market value of that completed development would be expected to relate to the tenancy status at any point in time. In any event, it would be seen as unusual for an investor or developer to proceed with the construction of a regional shopping centre unless the potential demand had been tested by the negotiation of leasing agreements -- 19 of 21 -- ... 20 of at least the major tenancy areas. It follows that if Mr Crawford is wrong in his assertion that the "added value of the tenants" attaches to the land, then his analysis of the sale of that land, which he stressed was a separate entity to the development agreement, will be flawed . Removing the "added value of tenants" but adopting for the purpose of the exercise, each of Mr Crawford's other variations to the Browns Plains Sale (2) alters the result significantly. Indeed the land value "site improved" would become, by my calculations, $14,190,000 providing a factor of 1.591 "times the net rental of the development". That factor applied to the Pacific Fair net rental would result in an alteration to the land value site improved from $29,200,000 to approximately $45,000,000. At that starting point and again using Mr Crawford's "financial analysis" without alteration to the estimated costs of filling and revetment, but using a component for rates and taxes as had been budgeted (in Mr Apted's schedule), then holding costs on the land over the development period of six months, the result would show an unimproved land value in excess of $38,000,000. Mr Nobes' evidence has been of little assistance in supporting the specific amount of the valuation. His evidence does indicate, however, that the starting point of Mr Crawford's financial analysis - land value site improved - is overly pessimistic for a site possessing the position, environment and external infrastructure of Pacific Fair. Findin g I find that the appellant has not proved that the Department's assessment of the site value of the subject property filled and retained, is wrong. However, -- 20 of 21 -- 21 for the reasons given I will adopt the cost estimates of the appellant relative to the fill and revetment wall and allow holding costs during the site development period. The unimproved value is determined as follows: Site Value - 166,800 m2 @ $240 per m2 Less: Fill 533,000 m3 @ $6 per m3 Revetment wall 450 lineal metres 3.5 m in height @ $270 per m 2 - say Fees @ 9% - say Interest for half development period of 6 months @ 9% say Rates and Taxes - allow Gross Land Value Less Interest @ 9% on Gross Land Value for six months say Adopt $3,198,000 $425,000 $3,623,000 $ 326,000 $3,949,000 $ 89 ,000 $4,038,000 $40,032,000 $ 575,000 $ 4,613,000 $35,419,000 $ 1,525,000 $33,894,000 $34,000,000 The appeal is allowed, the valuation of the Chief Executive set aside and the unimproved value determined in the amount of Thirty Four Million Dollars ($34,000,000). RE WENCK MEMBER OF THE LAND COURT -- 21 of 21 --