Newcastle council has rejected an offer from the state government for community land needed for the Newcastle Inner City Bypass that was almost $800,000 lower than a valuation.
The elected council on Tuesday endorsed a recommendation to seek a Valuer General determination on eight parcels of land that will be compulsorily acquired for the Jesmond to Rankin Park section of the bypass.
Transport for NSW made City of Newcastle an offer of $1,155,000 for the land, but an independent valuation sourced by council came in at $1,950,000.
Liberal councillor Callum Pull said accepting the offer would "effectively mean transferring $800,000 of ratepayer money to Transport for NSW".
Transport issued an acquisition notice for the land on March 1. Council said it was estimated the land transfer would occur on or around June 10.
Council said it tried to negotiate, but Transport advised its offer would not be amended, and if the parties don't agree to a figure before the transfer, compensation can be assessed by the Valuer General.
Labor deputy mayor Declan Clausen said the difference was a "considerable sum of money" and pointed out the motion would not impede the transfer date to enable the road to be constructed.
Liberal councillor Katrina Wark initially called for councillors to accept the offer on the table, claiming that rejecting it would delay construction of the project. But she was assured by the lord mayor and CEO this was not the case.
"The motion to refuse the offer of compensation from Transport for NSW doesn't in any way actually delay the actual construction of the project," CEO Jeremy Bath said.
"It delays the payment of funds to City of Newcastle while we go through the process for the Valuer General of determining what is a fair and reasonable amount of compensation for the loss of that land."
Mr Bath said the motion also wouldn't allow the state government to acquire the land without paying anything.
Lord mayor Nuatali Nelmes said the difference in valuations equated to the cost of four new playgrounds.
"There's a significant disparity," she said.
The motion was supported by all councillors except Liberals Cr Wark and councillor Jenny Barrie.
