The decision to effectively gift University of New South Wales a huge slice of prime city land for a new campus will deliver greater economic benefits than had the site been sold to developers at market value, Chief Minister Andrew Barr says.
The ACT government has signed a deal that will see it provide about eight hectares of land on Constitution Avenue, including parts of Reid CIT and the car park opposite, to the university under a peppercorn lease agreement.
The government will also spend $25 million on the project, which will be paid in installments when key milestones are met.
In exchange, the institution will spend $1 billion redeveloping the site as a campus for 6000 students over the next 15 years. A defence and security innovation precinct is also planned.
Given the site's size, prime inner-city location and recent sale prices of nearby blocks, the market value for the UNSW campus land would likely be in the tens of millions of dollars - if not more.
The federal government pocketed $34 million from developer Amalgamated Property Group when it sold the 18,000 square Anzac Park East site in 2017. The same developer paid $21 million for about 13,000 square metres of land next door to the site of the planned campus.
We recognise that in developing Canberra's CBD, yes we need more residents, but we also need jobs and diverse economic activity
Chief Minister Andrew Barr
At a media conference on Thursday to announce the agreement, Mr Barr said selling off the land to developers would have been the "highest economic use" of the site in terms of generating revenue for the government.
But Mr Barr said the deal with the university would deliver far greater long-term economic, social and education benefits to the territory as a whole. Government-commissioned analysis estimated the project could inject $3 billion into the local economy.
Mr Barr said it was only fair that UNSW was given the land for next to nothing as peppercorn lease agreements had also been struck in the past with ANU and University of Canberra.
"We recognise that in developing Canberra's CBD, yes we need more residents, but we also need jobs and diverse economic activity," he said.
"If you look at what underpins the ACT economy outside of the federal public service, the higher education sector is our next biggest economic contributor - it's our first billion-dollar export industry.
"If you think about where this city needs to position itself over the coming decades, this is exactly the area that we already have strength in and this builds on that strength."
Taking a swipe at critics, Mr Barr said the deal was proof the government doesn't just flog off public land for private housing.
"This is a tangible example of where we have chosen a different path to get a different and better outcome for our city overall," he said.
The terms of the agreement would be made public at some point, he said. Reid CIT will remain open until the training institute's proposed new Woden campus is built in the mid-2020s.
Establishing the campus will allow UNSW to expand the courses offered at its Australian Defence Force Academy.
"We established ourself here in our partnership with the Australian defence force, and it's now time to expand," UNSW Canberra rector Michael Frater said on Thursday.
"By doing this, we will contribute to the revitalisation of Constitution Avenue, the revitalisation of Canberra city, but also we will have a very important research and innovation precinct on the site which will provide an opportunity for local industry to work with researchers."
The higher education sector has been among the industries hardest hit by coronavirus, and UNSW vice chancellor Ian Jacobs said the outbreak posed a "very serious challenge for Australia, and globally".
READ MORE: UNSW to build $1 billion Canberra campus after securing prime city land for next to nothing
Be he said the university would not allow the "very real, but temporary" crisis to derail its expansion plans in Canberra.
Opposition leader Alistair Coe welcomed the university's plans, but said it was essential that the scope, design and scale of the campus development was appropriate.
"We want to enhance Canberra's standing as a centre for academic excellence," he said.
"The campus would create new opportunities for federal partnerships and investment in research and innovation."
UNSW, one the nation's elite Group of Eight universities, also announced on Thursday that it would divest from fossil fuel companies by 2025 at the latest
