How Value Capture Is Helping Build A $150 Million Stadium For Western United
elbourne-based A-League club, Western United, is working to build a new $150 million, 15,000-seat Wyndham Stadium with no state or federal government funding, thanks to the local government’s use of the ‘value capture’ model.
Explaining value capture, Prosper Australia director of research, Karl Fitzgerald, said it creates public value by allowing a private developer to make profits too, and could help boost Australia’s economic recovery from COVID-19.
“Value capture is a closed-loops system of ensuring that the public receives a share of publicly funded infrastructure,” Fitzgerald said.
“In Australia, it’s largely the case that the public funds the infrastructure and private landholders who live nearby take the windfall.
“That has to change.
“It’s in the hundred of thousands, often millions of dollars with what we call the golden pen tick,” he said, discussing the value of land when it gets rezoned from industrial or farmland, to residential.
“When the government gives you that pen tick to build upwards, up goes the land value and you’re sitting on an absolute killer, you’ve made good, good money.
“A little bit is captured through land taxes, a little bit through council rates but really, it’s crumbs on the table compared to multi-million-dollar profits that are made through choices of, for example, which way a train line goes…
“Value capture closes that loop so that those who have the best location and have the greatest windfall gains, actually contribute more back to the public coffers than those who live two, three, or four kilometres away.
“That’s the common-sense element of it.
“At the moment we’ve got this sort of take-take mentality and we need to change,” Fitzgerald said.
Discussing how value capture is helping build the new Western United stadium, Wyndham City Council director of deals, investment and major projects, Kate Roffey, said the Wyndham Council has essentially given a 100-hectare paddock to the club.
“The ‘Field of Dreams’ we call it, because it takes a lot of vision to think that one day there’ll be a major sporting precinct out here,” Roffey said.
“The biggest questions is, ‘is our council paying for it?’
“And the answer is no, we’re not.
“We’re providing, at no cost, the piece of land, apart from about six and a half hectares for the stadium itself.
“Anything that the developer wants to develop on, they pay for… purchased at market rate, stays in the ownership of council and we use the profit to pay for the stadium.
“So you need a group of investors who were really interested in doing something good for the community, as opposed to saying ‘we could just buy the land, develop it ourselves and put the cash in our pockets,” she said.