Phil Dickie Stories

Nelly Bay

Commissioned article for Courier Mail

Six years ago, mad pursuit of the great god "development" wrecked a noted beauty spot for all time, deeply divided a close community and left a legacy of spectacular devastation for government, local authority and community to somehow deal with. Will the State government's new planning and development and coastal management legislation prevent such development disasters in future? Phil Dickie reports.

In the 1950s, Nelly Bay, on Magnetic Island near Townsville, was a favored destination for honeymooning couples. It had everything required for romantic seclusion - a spectacular backdrop of granite boulder hills, a small and friendly community nestled in behind a picturesque headland and a white sandy beach, crystal clear blue waters and a fringing coral reef.

Since 1990 however, the tourists, honeymooning or not, have avoided Nelly Bay and the reason is immediately apparent. The headland was turned in to a quarry and the bay substantially filled in with the proceeds. Portions of the white sandy beach are still there, separated from the water by rubble and rusting machinery. And other, less visible, scars have been inflicted on a once close knit community.

The original proposal to turn Nelly Bay into a tourist resort and marina came from former Maroochy Shire Councillor and restauranter, Mr Geoff Orpin, who arrived on the island in 1980. He is still fiercely defensive of the project and objects to it being described as "devastated".

"It is a construction site," he said. "When did you see a pretty construction site. It would have been finished five years ago, if it wasn't for a few people holding the community to ransom."

Mr Orpin, now running and managing the refurbishment of the Magnetic International Resort Hotel and running a local community newspaper, said that initially his proposal had no opponents.

"There was never a greenie or any complaint involved," he said. "It is not a divided community - there are three vocal people who do nothing else than try and stop development in any way they can."

One of those "three vocal people" is Mr Orpin's former next door neighbour, Ms Julie Walkden, who did her life savings mounting her own legal challenge against the project through the Local Government and Supreme Courts. She lost, and costs of more than $300,000 were awarded against her.

Ms Walkden, an island resident since 1970, said she had no regrets except for not taking Mr Orpin's proposal "more seriously much earlier".

"Everything that has happened here shows that we were right all along. Not devastated? Just look at it."

Ms Walkden rejects the notion that only a small minority opposed the development, saying that there were more than 250 objections to the Townsville City Council over a rezoning for the project, more than 700 requests for reconsideration of a Great Barrier Reef Marine Park Authority (GBRMPA) permit.

"The community raised more than $12,000 to help with my appeal," she said. "All this talk of a vocal minority is just the party line."

The battle of Nellie Bay is anything but over. Mr Orpin is now a consultant to the company which the Queensland government has nominated as the preferred developer of the site. And Ms Walkden and other islanders continue to seek rehabilitation of the site as an alternative to what they still see as inappropriate and damaging development.

Nelly Bay has been sitting ravaged, as Queensland's worst development disaster, for six years, or about the same length of time as the Queensland government has been pondering its "high priority" legislation to guide future development. With the Planning, Environment and Development legislation now in its public consultation stage and with Coastal Management legislation also on its way into state parliament, the lessons of Nelly Bay are particularly pertinent.

It is only recently that the realisation that development can be unwise, uneconomic and unattractive has captured any share of the public or political imagination. Before then, as historian Ross Fitzgerald detailed in his two volume History of Queensland, a long succession of Queensland governments viewed all development as good and desirable, almost by definition.

Recently there has been increasing realisation that development can damage the attractions that bring the tourists in the first place, or that it can as easily be a public burden as a public benefit.

Context is important. What seems now to be the product of sustained insanity by developers and government authorities alike looked much different back in the optimistic early 1980s. A stock market crash, high interest rates, a pilots strike and a resurgent environmental movement were all far off in the future.

Back then, Townsville was setting out in a determined way to be Cairnsville. A high tourist profile and prosperity were to follow on from the internationalising of the airport, from putting some Great Barrier Reef in an oversize aquarium, from a new casino, from a floating hotel on the reef and from no less than four large resorts planned for Magnetic Island.

Townsville's dream of being Cairnsville still endures but the casino is about the only grand project to have prospered. The Great Barrier Reef Wonderland is impressive, but has not prospered. International carriers were never much interested in the international airport and are now not interested at all while the floating hotel has been towed away to float off Vietnam. And Magnetic Island got only the Nelly Bay disaster.

GBRMPA seems to have mixed feelings about Mr Orpin's original 1983 proposal. On the one hand it approved in principle, and on the other, it expressed misgivings over the possible impact on what was described as one of the island's more pristine reefs. But while GBRMPA requested and waited for further information, politics intruded.

In February 1984, brand new northern development minister Bob Katter Jnr was in need of some brand new northern development projects to announce. Ignoring minor details like a total absence of leases or approvals, Mr Katter announced the $100 million Magnetic Keys project to be built on - and in - the clear blue waters of Nelly Bay. The proposal was nothing if not ambitious - there would be a 500 berth marina and 2000 beds worth of accommodation, enough to double the island population if all were simultaneously (and singly) filled.

According to Mr Katter all environmental concerns would be answered and construction could start in six months. It was in fact to be 18 months before the developer got a special lease over the floor of the bay just to examine the feasibility and environmental impact of the project and more than three years before a development lease was granted.

Officialdom was also less impressed by the proposal than minister Katter. GBRMPA kept raising objections and then finding inadequacies in the replies supplied by the developer.

Much agony could have been avoided if more careful note had been taken of the comments of Land Commissioner Tooley, who thought the project "excessive" and wondered about the ability of the developers to carry it to "a satisfactory conclusion". He thought perhaps that any development lease should be covered by a bond to cover the consequences "if the development failed midway".

The Department of Local Government, not notably a nest of environmental concern, also thought the proposal represented "over-development" and wondered how the current owners of beach frontage on to Nelly Bay would feel about becoming the owners of hotel frontage.

And in its first appraisal of any development on Bright Point, the Townsville City Council knocked back an application for a tourist facilites zone on the grounds that no need existed for a proposal that would reduce existing residential amenity and create traffic hazards.

The developer, now wearing the flag of North Barrier Holdings Ltd, obtained its first funding of any significance in 1986 - $2,250,000 from the Victorian-based Tricontinental merchant bank, later found by a royal commission to be an extremely imprudent and at least occasionally corrupt lender.

Soon after Mr Orpin and his associates sold out, to the Linkon group and Essington Developments for a price that Mr Orpin would not specify but described as "a very nice figure". Essington Developments, a joint enterprise of the Essington Group and Mr Kerry Packer's Consolidated Press Holdings, sold their interest to Interwest subsiduary Pacific Properties Pty Ltd. Once again the price is not known, but it could have been expected to reflect State Cabinet approval for the project and that all important special lease over the bottom of the bay.

But not much could be done with the lease while GBRMPA continued agonising over whether the developers should be given a permit to develop a harbor, marina and breakwaters. By October 1987, GBRMPA had got as far as zoning Nelly Bay in such a way as to permit harbor development while adjacent bays were zoned as Marine National Park.

GBRMPA continued to find that the proposal would have unacceptable environmental effects on the Great Barrier Reef Marine Park until early October 1988. But by the end of that month, GBRMPA had issued a two year permit to allow the construction of a marina in Nelly Bay.

This permit was, and has remained, controversial. It was initially released without any reasons for the decision being supplied and without one of GBRMPA's main stated concerns - developing an acceptable construction technique to minimise reef damage - being satisfied.

But the authority did, very sensibly in the circumstances, require the developer obtain rehabilitation insurance to cover any eventuality where the development did not proceed. Only later did it emerge that there was not an insurance company on the planet that, having looked at what was proposed, was willing to assume the risk.

The Townsville City Council had also had a change of heart about the project, carrying through an unappealable tourist facilities rezoning of Bright Point, and seeking to make it doubly unappealable by requesting a State government ministerial rezoning for the whole site.

The council then approved a consent use application for the construction on Bright Point of a 239 room hotel and 16 home units. This, in effect, was the approval which allowed the headland to be quarried under the pretext of "terracing" and the proceeds used to fill up part of Nelly Bay.

Serious construction finally started in August 1989, with residents and environmental groups heading for courts and tribunals to challenge every permit and approval they could.

There were several stays of construction ordered while the Administrative Appeals Tribunal considered more than 700 objections to the construction of breakwaters under the GBRMPA permit. In the end, the breakwater was finished at about the same time as the tribunal determined that a residents group would be able to challenge its construction.

More far-reaching consequences were to follow from the case brought by Julie Walkden before the Local Government Court.

Judge Wylie dismissed Ms Wlkden's appeal against the Townsville City Council approval, determining that the proposed Bright Point development would not so affect the reef and waters in Nelly Bay that the amenity thereof would be adversely affected. This was, to say the least, an ironic decision in view of the development's subsequent affect on both the appearance and property values of Nelly Bay.

Judge Wylie further decided that Ms Walkden should bear 80 percent of the costs of the 28 day court case, substantially on the grounds that 80 percent of her case related to environmental considerations that the court was not obliged to consider. As the developer and council costs exceeded $300,000 this was not an order that Ms Walkden, a single mother who had already expended all her assets on her own legal expenses, was at all able to comply with then or at any time since.

The Criminal Justice Commission was later to find that Townsville City Council aldermen had at least contemplated a highly irregular approach to Judge Wylie.

And one alderman who also happened to be also a Liberal Party candidate did have at least a chance encounter with the judge in a shopping centre. Labor Mayor, Tony Mooney, promptly wrote to the alderman accusing him of gross impropriety and saying that "your actions could well be misconstrued by the opponents of the development with dire consequences".

As the mayor's letter was equally promptly leaked to the Townsville media, the approach was so construed and became the basis of an appeal by Ms Walkden to the Supreme Court.

Ultimately, the appeal being dismissed, all that resulted was yet another hefty addition to Ms Walkden's already impossible legal bill. Townsville City Council continues to expend the ratepayer's money on the fruitless task of trying to extract large sums of money from the impecunious Ms Walkden.

Council has denied there is any element of revenge involved, but Ms Walkden has drawn an inference from council actions against her that occurred in close chronological proximity to her lodging a complaint with the Criminal Justice Commission.

Initially, Mayor Mooney's mayoral by-election campaign manager told Commission investigators that the Magnetic Keys developer hadn't been a donor to the Mooney campaign. Later, being rather uncomfortably re-interviewed by investigators, he agreed that there had, indeed, been an unrecorded donation.

The Commission also found that the developer had attempted to have Ms Walkden withdraw her appeal on the basis that $10,000 to $20,000 would either be paid to her or, according to the developer, be spent on an environmental project of her choice.

The developer was also discovered to have promised a $50,000 donation to GBRMPA while the authority had the zoning of Nelly Bay under consideration, but bankruptcy intervened before any payment was actually made. The CJC noted that a Federal inquiry had cleared GBRMPA of any wrongdoing.

And the Commission also found that council officers had attended and the developer had paid for a celebratory lunch on the occasion of the dismissing of Ms Walkden's appeal.

None of this, the Commission found, amounted to official misconduct within the meaning of the Act. But it took a particularly dim view of the celebratory lunch and once again took the opportunity to recite its often repeated and so far totally ignored recommendation to the State government to require public disclosure of local government electoral donations.

In the meantime, the project was under threat from another quarter. Imprudent lender Tricontinental collapsed in January 1990, closely followed by development partner Pacific Properties.

Despite this, the pace of work accelerated. But, with the technical questions never having been resolved, technical problems abounded. In particular, the coral had been inadequately surveyed before dredging, with occasionally dire consequences for the machinery being employed. Silt curtains proved useless, and the breakwater walls defied all attempts to stop them from leaking.

In July 1990, the dredge sank. In December, the Magnetic Keys consortium sank.

GBRMPA was then forced to reveal that the rehabilitation insurance policy they had required to cover such an eventuality was non-existent, as were the prospects of any rehabilitation.

The lease and site effectively reverted to the Queensland government and became the taxpayer burden that Lands Administration Commissioner Tooley had originally predicted as a likely outcome.

Nothing of consequence has happened at the devastated site for the past five years. And as rubble frontage has never been much of a real estate drawcard, nearly everyone in the community has suffered significant loss.

Trying to make something of the mess, the State government sought expressions of interest on what to do with the site. Last year, it chose the option of persisting with some form of development to that of restoring the bay to something of its prior condition.

The preferred developer, Townsville business consortium Nelly Bay Harbor Pty Ltd, proposes an all weather safe harbour, a canal estate and some tourism- related commercial facilities. But the State government is assuming many of the development roles such as preparing - and paying for - environmental impact assessment and seeking new GBRMPA permits.

The State government's new role in a canal estate development may of course put it in some conflict with itself when new coastal management legislation results in new guidelines for such developments as canal estates.

The project, which is still grandiose in the sense that it envisages a near doubling of the island population, remains controversial. Federal Environment Minister, Senator Faulkner, who by now is quite used to dealing with large developments planned for on or in Queensland World Heritage areas, insisted on a fresh Environmental Impact Assessment which was released for public comment earlier this month.

Mr Orpin said that the current proposal was very close to his original plan for the bay but "people don't realise that she (Ms Walkden) can do it all again."

"There is still a legal appeal process to go through. It is a major flaw in our legal system that a minority group can, by manipulating the law, frustrate a developer until they go broke."

But, according to Ms Walkden, "The law is all we've got."

Will the Queensland government's new Planning, Environment and Development legislation, now out in draft form for public comment, prevent future development disasters of the Nelly Bay variety?

Planning researcher Mr Bruce Moon, of the Australian Housing and Urban Research Institute, thought the Nelly Bay scenario could become more rather than less likely as the planning system moves from its current prescriptive "thou shalt not" approach to one where mainly local government "development managers" will be given a great deal of discretion.

Some of the other perennial causes of development disasters like Nelly Bay will be unaffected by the legislation.

For instance, there are no real obstacles to development proposals being submitted and re-submitted until something gives in the planning and approval system. Experience shows that use of a variety of techniques ranging from sheer persistence to outright corruption usually means that something will give.

And while there is now much greater consideration of the environmental and social aspects of proposals, there are still few procedures for assessing the economic viability of either proponents or proposals.

In the Nelly Bay case, the original and most public proponent of what was by any measure an extremely grandiose scheme was a person much litigated against by persons and companies claiming monies owing. It took a lender of widely reputed and later proven recklessness to make it fly. None of the numerous public authorities dealing with the project made any credible assessment of its economic viability, but when insurance companies were invited to cover the risk of non-completion, they declined.

A related issue is that much so-called "development" is in reality "permit shopping", whereby a proponent obtains a permit or approval and then sells out, often to another so-called developer whose only contribution is to obtain another approval before looking for another buyer. This is an obvious recipe for sites to be over-developed, well beyond any level that makes environmental, social or economic sense.

The editor of the Royal Australian Planning Institute's Queensland journal, Mr Phil Day, has called for local and state government retention of any "betterment" in property values that is the result of public authority decisions.

He said that this would remove most development pressure not related to actual need, ease the real estate "boom and bust" cycle, remove most corrupt pressures on local government and provide more than adequate funding to pay proper compensation to those adversely affected by development.

Although failure was probably built in to the Magnetic Keys proposal from the beginning, proponents of the development and the Townsville City Council tend to lay the blame on the residents and environmentalists who opposed it.

According to Environmental Defender's Office solicitor, Ms Jo Bragg, proper consultation and studies prior to development would do much to minimise such lengthy and costly disputes while producing better development outcomes generally.

She is concerned that the proposed planning and development legislation weakens public rights to access information about developments.

For instance, public EIA documents for many sensitive developments would be replaced by piles of correspondence between local and State government bodies, making it even more difficult for the public to find out about or have any real say in development decision making.

Soon after and partly as a result of the Walkden case, the incoming Goss Labor government brought in amendments that broadened the issues to be considered by the Local Government court and greatly restricted the ability of judges to make prohibitive cost orders against members of the public.

With the detail of the proposed new appeal processes yet to be released, Mr Day said it was apparent that the government intended to stick with a highly legalistic and very costly appeal process.

He said the rate of appeal in Queensland was far below that in comparable states and countries, and that this was also a factor in the amount of shoddy and unwise development.