Originally published on The Financial Review in December 2019
Rich Lister Maha Sinnathamby survived financial ruin to build Australia’s biggest private city. But the 80-year-old is far from done.
Despite criticism, controversies and a string of near-death moments, Sinnathamby has managed to turn Springfield from a house-and-land haven into a bustling little metropolis, at least in part through the sheer force of his personality.
But there’s clearly still much more to be done. You can’t miss the tracts of undeveloped land that remain throughout the city centre; when AFR Weekend visits, a travelling circus has set up shop on one of the big paddocks. So at the age of 80, Sinnathamby wants to move faster. Since the middle of the year, he’s been quietly holding discussions with investment banks and consulting giants, aimed at getting help to turbo-charge the growth of the city by attracting big employers. Sinnathamby claims tech giants such as Microsoft, Google and Facebook are on his target list. There may be a touch of hyperbole here from Springfield’s chief spruiker, but the names are both a measure of Sinnathamby’s ambition and recognition of the need to create jobs in Springfield and not just homes.“We are now going to take this project to the market,” Sinnathamby says. “The reason is there’s a lot of heavy lifting to be done. A lot of heavy, heavy lifting to be done.”Sinnathamby’s daughter, Raynuha, who is managing director of SGC, is clear about what the company needs to do. With plans for a population of around 140,000 people by 2030, it wants to lift employment in the city from about 19,500 direct and indirect jobs to 50,000.
“If we don’t deliver 50,000 jobs, then our job is not done,” she says simply. Planning expert Professor John Stanley, of the University of Sydney, is full of admiration for the way Springfield has been carefully planned. He sees scope to turn it into Brisbane’s second CBD, in the way Parramatta has been set up as a second centre for Sydney. He also backs Sinnathamby’s push on employment. He argues jobs – and possibly even more jobs than SGC is aiming for – will cement the city’s future.“If Springfield wants to really start to compete with the big boys as a major city, it’s going to need higher aspirations for job growth than it’s got at the moment,” Stanley says.
Springfield’s origin story has achieved a sort of mythical status, carefully shined by Sinnathamby’s showmanship and passion. It goes something like this. In 1992, a nearly broke Sinnathamby stumbles on an unwanted parcel of 7000 acres put up for sale by a forestry company – “very, very conservative, pipe-smoking chaps,” he says now – and secures it for about $8 million.
But rather than subdividing the parcel for house-and-land packages, he and Sharpless think big. After studying a string of master-planned communities in the United States and Britain, they decide to capitalise on the sheer size of the land to build a city from the ground up. In 1995, Sinnathamby convinces Queensland premier Wayne Goss to fund the extension of the Century Highway to Springfield, giving the project a vital transport link. Two years later, he manages to get Queensland Parliament to back a special act of Parliament that puts all the planning and development powers for Greater Springfield in the hands of SGC.
The University of Southern Queensland opens its Springfield campus in 2006, the train line follows in 2013, and a campus of the Mater hospital is established two years after that.
But to his credit, Sinnathamby has also been open about financial hardships through Springfield’s evolution. There was the desperate rush to pay off the original $8 million purchase price with quick-fire land sales; ANZ’s hard-nosed attitude to SGC in 1999 over a $9.2 million loan; and the shock of the GFC, when SGC briefly considered selling its university precinct. But it’s Sharpless, the man who for so long has overseen the financial nuts and bolts of this project, who reveals just how much of the project’s history has been spent on a shifty financial footing. Land is notoriously difficult to borrow against, he says, even when your plans are a grand as Springfield’s.“Fundamentally, the banks don’t want to see the blue sky, they just want to see you constantly achieving what you’re telling them,” Sharpless explains. So it’s only since SGC went into the business of building income-producing property that the finances have changed.
“Eventually that enabled us to transition away from property development-type finance into institutional-type finance,” he says. “But it took us a long time – we really only got there about five years ago.”
While Sinnathamby’s story is well known, his business partner’s background is just as fascinating, not least because of the enormous gamble he took in going into business with Sinnathamby. The pair met in Perth in the early 1980s. Sinnathamby, who is of Sri Lankan descent, grew up in Malaysia, studied engineering in Sydney and settled in Perth after working in South East Asia. Sharpless, a qualified engineer who was studying for his MBA, wrote to Sinnathamby asking for a job in the property business. At the time, Sinnathamby was riding high. He’d quit his job with the West Australian Water Board to start building duplexes. Between 1977 and 1982, he and his business partner built their balance sheet from $7000 to $7.5 million.“Everything we touched turned to gold for the first time in my life,” Sinnathamby recalls now. “It was an amazing, amazing experience.”But Sinnathamby had taken on too much debt. When the business partnership dissolved, he pursued an ASX float to raise capital and reduce his leverage. But Bob Hawke’s federal election victory in March 1983 made investors nervous in an economy that had only just emerged from recession. Sinnathamby almost got the cash, raising $14 million from the public. But for the first time, he reveals his key private investor, the property developer and legendary yachtsman Syd Fischer, withdrew his promised $7 million at the last minute. The trust collapsed in April 1983, with a debt load of $28 million. Over the next two years, Sinnathamby would pay off around $24 million to his financiers and investors through a string of asset sales. He says four separate banks and the Australian Taxation Officer investigated his books, sure he had found a way to hide money from them.
But remarkably, he and his wife Belinda weren’t scared off by the collapse; when Sinnathamby decided to move to Brisbane to start again, the couple followed him across the Nullarbor in their car. Sinnathamby – who flew to Brisbane with his wife and four children – claims Belinda cried from Perth to Kalgoorlie. Sharpless and Sinnathamby set up MUR Corporation in Brisbane in 1985 with $30,000 and a rented house in the Brisbane suburb of Spring Hill.“That was our empire,” recalls Sinnathamby, who took a 75 per cent stake in the new business. “At night it was also Bob’s bedroom.”MUR did well, developing Holiday Inn hotels in Brisbane and Cairns, and building up a balance sheet worth about $4 million. Then Sinnathamby repeated his mistake of trying to go public, blowing up $3 million in the process. It was soon after that he made the fateful call to the agent selling the land that would become Springfield. The development of the city has not been without its controversies. In 1996, the Queensland Criminal Justice Commission investigated a series of small political donations made by Springfield to local government officials, and cleared the company. In 2017, Sharpless appeared before a fresh Crime and Corruption Commission hearing into another set of donations; he told the body all of the small donations had been solicited by candidates themselves and advocated for a ban on political donations from developers.
“Then people such as property developers wouldn’t be accused of doing things that supposedly are not in the public interest just because we try and help people who ask for our help,” he said at the time. Sinnathamby insists Springfield has never used donations to get its way. He claims his proposals live or die on merit, not money.“You can’t do anything shorthand,” he says. “If I go and convince you that is what you have to do, you will do it because you are a minister who wants to see things happening.”
What Sinnathamby wants now is to build the city around three planks: education, health and what he calls ideas. The Education City concept is the most advanced. A number of institutions have been built up around the hub of the University of Southern Queensland campus, including a TAFE Queensland South West campus, the Union Institute of Language, the Studio of Performing Arts Springfield and two early education centres. The health precinct, centred around the Mater hospital campus and an aged care complex developed by Aveo, is more prospective, while Idea City is largely conceptual, although infrastructure such as the Polaris Data Centre is in place. Professor Stanley, who co-authored the 2017 book How Great Cities Happen, says SGC’s focus on education, IT and health make sense, as these are knowledge-intensive sectors that will provide employment long into the future. He argues governments could support this shift by decentralising public service jobs; luring big employers to the city would also help.“I think the aspiration [around knowledge-based jobs] has been good. The density of jobs is important to get those knowledge precincts going,” Stanley says.
“The challenge if you’re out on the edge of the city is that it’s hard to get these knowledge jobs, which tend to head more towards the centres.”Raynham Sinnathamby argues the case for a business to relocate from the Brisbane CBD or consolidate operations scattered throughout the state into one place has been made by the likes of GE.
She says while luring a big employer is never easy, Springfield’s control of the entire development gives it the ability to offer terms – such as the opportunity for purpose-built premises, and the largest floor plates in the country – that are hard to replicate in the city.“We are not locked into any format here. We are prepared to look at different models to drive and encourage different businesses to come here.“And we know if get the big guys, the little guys will hug around them.”
Raynuha works alongside her brother Naren (who is director of marketing and communications) and sisters Uma Ranchigoda (director of commercial development) and Meera Honan (director of education and health services). She says her father remains as energetic and impatient as ever.What’s striking about the billionaire – and indeed the whole family – is his ability to toggle between the immediate and the very long term, almost without pausing for breath.“His mind is 20 or 30 years ahead of other planners and how they think,” Raynuha says.
As the pair enters the latter stages of their careers, it’s clear the dollars matter less than legacy and time.“Everything that we’ve generated over the years has really gone back into the project, to facilitate the next level of development and the next opportunity,” Sharpless says.“Most of the things that are here, we caused them to happen. And they wouldn’t have happened to the standard that they have, if it hadn’t been driven, particularly by Maha.”Sinnathamby is equally determined to finish the job.“It is not there to make quick money so that both Bob and I can go and live peacefully. But it is a serious, serious commitment to creating something that is a legacy in this country.”