A Chinese company that wants to build a new city on agricultural land between Brisbane and the Gold Coast has handed contracts to local farmers, asking them to sign over their land if it can secure approval for the project.
Cane farmers around Rocky Point met last night with a lawyer representing Chinese company Songcheng, which is considering buying the 6,000 hectares of farmland for urban development.
Local farmer and director of Canegrowers Rocky Point, Greg Zipf, told ABC Rural growers at the meeting were given contracts to sign that would commit them to selling their land to Songcheng if the deal goes ahead.
“The option agreement means you lock your land up to them,” he said.
“It’s not actually a contract of sale, it just means you can’t sell to anyone else.
“You are locked in with them for the next nine months and, at the end of that, they will either exercise the option to take you into the contract or terminate it.
“They offered that and had agreements there for everyone to take home and consider signing.”
Last year, about 40 local growers formed a collective to sell their combined 6,117 hectares, expected to be worth more than $1 billion, as a single parcel of land.
Wednesday night’s meeting suggests Rocky Point cane farmers are a step closer to signing what could be Australia’s most expensive sale of agricultural land to a foreign investor.
Sale still conditional
The sale is still conditional on a number of factors, such as Local and State Government support, which is needed if the land is to be rezoned for urban development.
The ABC understands Songcheng also wants a commitment that the majority of the 6,117 hectares be made available by landholders, before it decides to proceed with the deal.
Canford Property Group’s Roland Evans, who represents the collective of local landholders, was at the meeting and said landholders were briefed on the contract process.
“The aim and the purpose [of the meeting] was to explain to land owners of the individual lots of land what the process was going to be going towards the contracts, and any taxation issues that there might be surrounding the sale of the properties,” he said.
Mr Evans said company officials from Chinese group Songcheng were not present at the meeting, although a Brisbane-based lawyer representing the company was.
“They [officials] were not expected to be there, but we are expecting the CEO and possibly the chairman of Songcheng to be here in the next few weeks to finalise matters,” he said.
“We fully expect to get Local and State Government to drop in on our side and support us going forward, but up until they [authorities] have a plan going forward they can’t comment either way.”
The ABC has contacted the law firm representing Songcheng, Johnson Winter & Slattery, for comment.
Mr Zipf said growers at the meeting were told a deal could be signed within 14 months, once a due diligence period has ended.
“The lawyer negotiating with the Songcheng group went through the option agreement process, and how long that will take,” he said.
“[There is] a nine-month period of due diligence and then another four to five months before settlement would take place, as far as contracts are concerned.
“If they can’t get a decision or the appropriate approvals and tick the boxes off that they wish by that period of time, then that will be it, and they will walk away.”
Mr Evans said he could not comment on the timeframe of the negotiations, but said he was happy with how they were progressing.
“It is pushing forward exactly the way the process would go and we are very pleased with how this has gone in the past few months,” he said.
How will farmers cope?
A sticking point for the region has been how farmers will support themselves financially as the area transitions from cane farming to urban development, which could take more than a decade.
Rocky Point Sugar Mill, owned by the Heck Group, is already struggling to stay viable due to the small amount of cane the area can produce.
Mr Zipf said growers at the meeting were told Songcheng is considering acquiring and operating the mill in the short term, to ensure growers maintain an income.
“They are negotiating with the mill and the co-generation plant in the attempt to purchase those operations, so it gives them a bit of control of the industry and how long it may run for,” he said.
“From what the lawyer told us it may be five or 10 years, or possibly even longer, that the mill continues to run for.”
David Heck, CEO Heck Group which owns Rocky Point Sugar Mill, said he has not had specific talks with Songcheng but described the offer as a “realistic possibility”.