Stage 1: Colocation
feasibility study – racing
codes and exhibition
facilities
Chief Minister, Treasury
and Economic
Development Directorate
16 September 2014
Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Contents
Glossary ...........................................................................................................................................i
Key findings .....................................................................................................................................i
Executive Summary ....................................................................................................................... iii
1
2
3
4
5
6
7
8
Introduction ........................................................................................................................ 1
1.1
Purpose of the report ............................................................................................................ 1
1.2
Structure of the report ........................................................................................................... 1
Background ......................................................................................................................... 3
2.1
Colocation .............................................................................................................................. 3
2.2
Urban renewal ....................................................................................................................... 5
2.3
Framework for analysis .......................................................................................................... 8
2.4
Stakeholder consultations ..................................................................................................... 8
Approach ........................................................................................................................... 10
3.1
Colocation options ............................................................................................................... 10
3.2
Urban renewal ..................................................................................................................... 16
Strategic assessment......................................................................................................... 20
4.1
Qualitative cost-benefit assessment .................................................................................... 20
4.2
Risk assessment ................................................................................................................... 24
Economic environment ..................................................................................................... 28
5.1
Economic trends .................................................................................................................. 28
5.2
Demographic trends ............................................................................................................ 31
Financial assessment......................................................................................................... 33
6.1
Methodology........................................................................................................................ 33
6.2
Costs and Benefits................................................................................................................ 35
6.3
Results .................................................................................................................................. 35
Options assessment .......................................................................................................... 38
7.1
Strategic alignment .............................................................................................................. 38
7.2
Risk versus strategic alignment ............................................................................................ 41
Conclusion ......................................................................................................................... 43
8.1
Next steps ............................................................................................................................ 43
References................................................................................................................................... 44
Appendix A : Consultations ......................................................................................................... 45
Record of stakeholder consultations .............................................................................................. 45
Appendix B : Stakeholder views .................................................................................................. 50
Canberra Racing Club ...................................................................................................................... 50
Canberra Harness Racing Club ........................................................................................................ 52
Canberra Greyhound Racing Club ................................................................................................... 54
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Exhibition Park in Canberra ............................................................................................................. 56
Appendix C : Requirements for a new facility ............................................................................. 58
Limitation of our work..................................................................................................................... 69
Charts
Chart 5.1 : Australian interest rates ............................................................................................ 28
Chart 5.2 : Housing investment as a share of GDP ..................................................................... 29
Chart 5.3 : ACT share of national population and output .......................................................... 30
Chart 5.4 : Total population in the ACT, 2044 ............................................................................. 31
Chart 5.5 : Long run annual population growth in the ACT ....................................................... 32
Chart 5.6 : Changing age demographics in the ACT to 2043 ...................................................... 32
Chart 6.1 : Projected BCR Ranges (ACT Government)................................................................. 36
Tables
Table 2.1 : ACT Government dwelling sites 2013-14 to 2017-18.................................................. 6
Table 3.1 : Colocation options for analysis ................................................................................. 10
Table 3.2 : Estimate of relocation costs by category of cost ($ million) ..................................... 14
Table 4.1 : Qualitative cost-benefit assessment ......................................................................... 20
Table 4.2 : High-level risk assessment - colocation options ........................................................ 25
Table 4.3 : Options categorised by risk ....................................................................................... 26
Table 6.1 : Colocation Options and Corresponding Development Scenarios ............................. 33
Table 6.2 : Key Parameters.......................................................................................................... 34
Table 6.3 : Assumed Nominal Indexation Rates .......................................................................... 34
Table 6.4 : Key Costs and Benefits Considered ........................................................................... 35
Table 6.5 : Projected BCRs........................................................................................................... 37
Table 7.1 : Options categorised by alignment with objectives ................................................... 40
Figures
Figure 3.1 : EPIC site .................................................................................................................... 16
Figure 3.2 : Thoroughbred Park site ............................................................................................ 17
Figure 7.1 : Alignment of colocation options to objectives ........................................................ 39
Figure 7.2 : Risk versus strategic alignment for colocation options ........................................... 42
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Glossary
ACT
Australian Capital Territory
CRC
Canberra Racing Club
CHRC
Canberra Harness Racing Club
CGRC
Canberra Greyhound Racing Club
EPC
Exhibition Park Corporation
EPIC
Exhibition Park in Canberra
ICRC
Independent Competition and Regulatory Commission
Deloitte Access Economics
Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Key findings

The ACT Government committed in the 2012 election to undertake a feasibility study
into the colocation of the ACT racing codes.

Colocation of the exhibition facilities with the racing codes is also being considered,
given the proximity of Exhibition Park in Canberra (EPIC) to Thoroughbred Park and
because the Canberra Harness Racing Club (CHRC) is currently located on the EPIC site.

Deloitte Access Economics has assessed ten colocation options for the Canberra Racing
Club (CRC), CHRC, the Canberra Greyhound Racing Club (CGRC) and EPIC.
Colocation options considered
Colocation option
Land made available
Option 1 - CRC and CHRC at Thoroughbred Park,
EPIC consolidation on site
Part of EPIC site
Option 1a - CRC and CHRC at Thoroughbred Park,
EPIC at a greenfield site
Full EPIC site
Option 2 - CRC, CHRC and CGRC at Thoroughbred
Park, EPIC consolidation on site
Part of EPIC site
Option 3 - CRC, CHRC, CGRC and EPIC at
Thoroughbred Park
Full EPIC site
Option 4 - CRC, CHRC, CGRC and EPIC at a
greenfield site
EPIC and Thoroughbred Park
Option 5 - CRC, CHRC and CGRC at a greenfield
site, EPIC at a separate greenfield site
EPIC and Thoroughbred Park
Option 6 - CHRC, CGRC and EPIC at a
greenfield site
Full EPIC site
Option 7 - CHRC and EPIC at a greenfield site
Full EPIC site
Option 8 - CGRC and CHRC at Symonston, EPIC
consolidation on site
Option 8a - CGRC and CHRC at Symonston,
EPIC at a greenfield site
Part of EPIC site
Full EPIC site

The analysis considered the strategic and financial viability of each colocation option.

The strategic analysis considered the qualitative costs and benefits of each of the
options for the ACT racing codes, EPIC and the ACT Government.

For the ACT racing industry, the benefits of colocation are increased scale of
operations, shared facilities and reduced administration and maintenance costs.
Colocation also provides the opportunity for the racing industry to develop a racing
entertainment precinct, beyond what each code can achieve independently.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities

These benefits would need to be balanced against increased governance and
operational complexity that may result from colocation. The potential short-term
disruption to activities at Thoroughbred Park or Symonston to allow for construction
work and consolidation of existing infrastructure would also need to be considered.

Similarly, for EPIC the key trade-off is between the synergies from colocation, balanced
against the increased governance and operational complexity.

For the ACT Government, the key trade-off is between the costs of the colocation and
the benefits from urban renewal. The relocation costs for the colocation options are
estimated to be between approximately $20 million and $220 million depending on the
option, thus in order for colocation to work, the ACT Government would need to
explore urban renewal options to finance the colocation options.

Our analysis suggests that there are a number of colocation options that are align with
the strategic and financial considerations for the ACT Government and are worthy of
further consideration:
• Option 4 or 5 – colocate the racing codes and EPIC at a greenfield site, with an
option for EPIC to be at a separate greenfield site;
• Option 6 or 7 – colocate the CHRC and EPIC at a greenfield site, with or without
CGRC;
• Option 8 or 8a – colocate CHRC and CGRC at Symonston with EPIC either
consolidated on its existing site or at a greenfield site. This option is more
complicated than colocation at a greenfield site but could be pursued if a suitable
greenfield site cannot be identified; and
• Staged approach – implement Option 6 or 7 in the first instance, with a long-term
plan to achieve colocation of all the racing codes and EPIC (i.e. Option 4 or 5).

The ACT Racing Clubs were also given the opportunity to review and provide comments
on our findings. In summary, their views were:
• The Canberra Racing Club has firmly resolved that it is not in the best interests of
the Canberra Racing Club to proceed further with any future relocation.
• The Canberra Harness Racing Club is comfortable with the preferred options and
would welcome the opportunity to be part of the first stage of development, if
the project was to proceed.
• The Canberra Greyhound Racing Club is content to stay at Symonston. However,
if further analysis of the cost and benefits of a move to a greenfields site was
positive, the Canberra Greyhound Racing Club would be supportive of a move.

We would like to acknowledge the assistance provided by the ACT racing clubs and
EPIC in the preparation of this report. Their assistance was essential to the analysis of
the options and we thank them for their time and contributions to the study.
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Executive Summary
Deloitte Access Economics has been engaged by the ACT Government to consider the
feasibility of colocating the three ACT racing clubs – the Canberra Racing Club, the Canberra
Harness Racing Club and the Canberra Greyhound Racing Club – onto a single site. The
potential to colocate Exhibition Park in Canberra (EPIC) with the racing codes has also been
assessed. In addition to providing benefits for the racing industry and EPIC, the potential
colocation could also provide opportunities for urban renewal along Flemington Road.
This report is Stage 1 of the ACT Government’s analysis of the colocation options for the
racing codes and EPIC. The outcomes of Stage 1 will determine the second stage of work on
possible colocation and whether or not the Territory will pursue these options further.
Background
The ACT racing industry consists of the Canberra Racing Club (CRC) located at Thoroughbred
Park, the Canberra Harness Racing Club (CHRC) located on the EPIC site and the Canberra
Greyhound Racing Club (CGRC) located in Symonston. EPIC is a Territory-owned exhibition
centre and is the largest of its kind in the ACT and surrounding region.
Colocation options
In consultation with the ACT Government, Deloitte Access Economics has identified ten
options for colocation of the racing clubs and EPIC (as shown in Table i). These can be
grouped into three broad categories, whereby some or all of the clubs and EPIC are
colocated at:

the CRC’s existing site at Thoroughbred Park;

a yet to be determined greenfield location; or

the CGRC’s existing site at Symonston.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Table i: Colocation options for analysis
CRC
CHRC
CGRC
EPIC
Land made available
Option 1


Option 1a


Option 2



Option 3




EPIC site
Thoroughbred Park
Part of EPIC site1
*
EPIC site
Part of EPIC site
Greenfield site (to be determined)
Option 4




EPIC and
Thoroughbred Park
Option 5



*
EPIC and
Thoroughbred Park
Option 6



EPIC site
Option 7


EPIC site
Symonston (current Greyhound track)
Option 8


Option 8a


Part of EPIC site
*
EPIC site
* Under these options, EPIC is located at a separate greenfield site.
Colocating some or all of the clubs and EPIC will require new facilities to be built or existing
facilities to be upgraded, which is estimated to cost between $22.2 million and
$223.1 million depending on the colocation option. These costs are presented in Table ii.
Table ii: Estimate of colocation costs
Colocation
option
Minimum range of
facilities
Full range of
facilities
1
$54.0m
$75.5m
1a
$92.1m
$125.0m
2
$89.6m
$122.6m
3
$163.8m
$223.1m
4
$125.6m
$165.3m
5
$128.7m
$169.5m
6
$68.6m
$91.5m
7
$60.0m
$80.3m
8
$22.2m
$31.8m
8a
$63.7m
$85.2m
The costs were developed based on consultations with the racing clubs and EPIC, who were
asked to identify the minimum range of facilities that they would require at a new location,
1
The CHRC is currently a tenant on the EPIC site. If they are relocated some of the EPIC site would become
available for development.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
and the full range of facilities that would enable them to achieve the strategic and
commercial goals for their businesses. Our analysis assumes that the ACT Government will
bear the costs of relocation.
The highest costs occur under Option 3, when all of the racing clubs and EPIC are colocated
at Thoroughbred Park. The high cost of this option is driven by the complexity of colocation
at Thoroughbred Park. We have assumed it will require most of the current facilities to be
rebuilt to accommodate the additional racing codes and EPIC. We have also assumed that a
multi-story carpark will need to be built due to space constraints. The feasibility of this
option could increase if neighbouring blocks of land could be used, which would increase
the size of the sites. However, this is yet to be analysed and would require negotiation with
relevant stakeholders.
The lowest costs arise for Option 8, where the CHRC is colocated with the CGRC at
Symonston. This is due to the lower costs required to build facilities for CHRC and CGRC
compared to the CRC and EPIC.
Urban renewal
In order for the ACT Government to make the colocation options a reality, it needs to
explore options for urban renewal of the land made available under the colocation options.
Without the proceeds from redevelopment, the ACT Government will be unable to finance
the colocation options.
The colocation options deliver three potential parcels of land for redevelopment2.

Scenario 1 - the full EPIC site;

Scenario 2 - the full EPIC and Thoroughbred Park sites; and

Scenario 3 - part of the EPIC site.
The redevelopment scenarios also need to be considered in light of Deloitte Access
Economics’ research into the ACT property market. In recent years, the ACT property
market has bucked the national trend and there has been a surge in residential housing
construction. However, the ACT property market is expected to contract in the future, and
this will likely be driven by further reductions in the Australian Public Service, and a
reduction in the population growth rate driven by demographic ageing.
Strategic considerations
The report identified the qualitative costs and benefits of each of the options which provide
an indication of the trade-offs for the ACT Government in deciding which option to pursue.
There are different trade-offs for the racing industry, EPIC and the ACT Government, which
are summarised below.
For the racing industry, the key trade-off is between the benefits that colocation will bring
in terms of increased scale of operations, shared facilities and reduced administration and
maintenance costs, balanced against the increased governance and operational complexity
2
Note that the redevelopment of the CGRC’s site at Symonston was not considered as its location limits its
suitability for residential development.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
that may result. Colocation also provides the opportunity for the racing industry to develop
a racing entertainment precinct, beyond what each code could achieve independently. The
potential short-term disruption to current activities at Thoroughbred Park or Symonston to
allow for construction work and consolidation of existing infrastructure would also need to
be considered, depending on the option chosen.
For EPIC, the potential benefits would include reduced operational costs through a smaller
footprint or colocation with the racing industry. The opportunities offered by a new site
would include new purpose built facilities and, depending on the location, no longer being
subject to noise constraints. These would have to be balanced against potential relocation
costs and disruption to other tenants on the EPIC site, a loss of revenue from CHRC
(depending on the option) and potential scheduling conflicts with the racing clubs. This is
likely to be complex given the range of activities on the EPIC site.
For the ACT Government, the key trade-off is between the benefits that redevelopment
would bring, beyond the financial return, such as urban renewal and improving the
entrance to the ACT, compared to the complexity and costs of the colocation. This includes
negotiations with the racing industry, acquisition of land and possible new transport
infrastructure (e.g. access roads or public transport routes) to a new site. This study also
assessed the viability of the colocation options which would be financed by redevelopment
scenarios and the result are included below.
A potential greenfield site for the colocation has not yet been identified. If the ACT
Government wishes to pursue colocation to a greenfield site, it will need to consider the
costs of access and the opportunity cost of allocating this land for colocation.
Risk assessment
For colocation to work and to enable the benefits of colocation to be achieved, the ACT
Government and the racing industry would need to work together. However, there remain
risks associated with the colocation options that the ACT Government will need to be
mindful of in deciding which option to pursue.
Deloitte Access Economics undertook a high-level risk assessment of each of the colocation
options. The colocation options were assessed against the following risks:

Achievability risk – can the option be implemented? Will it require significant changes
to current legislative or planning processes?

Commercial risk – what is the risk that the option will not be commercially viable?

Operational risk – what is the risk that the option will negatively impact on the
operations of the racing industry or EPIC? Will the option disrupt the operation of the
industry while construction occurs?

Financial risk – does the option expose the ACT Government to financial risks?

Governance risk – does the option create risks for the governance structure of the new
facility?

Stakeholder risk – how are stakeholders likely to respond to the option?
The summary of Deloitte Access Economics’ risk analysis is contained in Table iii.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Table iii: Colocation options categorised by risk
Low risk
Medium risk
Medium-high risk
High risk
Options 6 and 7
Options 1, 1a and 2
Options 4 and 5
Option 3
CHRC and EPIC (with
and without CGRC)
at a greenfield site
CHRC located at
Thoroughbred Park with
and without CGRC (EPIC
consolidated or moved to
greenfield site)
Relocating all of the
clubs and EPIC to a
greenfield site (option
for EPIC to be on a
separate site)
Locating all of the
racing clubs and
EPIC at
Thoroughbred Park
Options 8 and 8a
CHRC and CGRC at
Symonston (EPIC
consolidated or moved to
greenfield site)
Source: Deloitte Access Economics analysis.
The low-risk options represent the most straightforward colocation options. These options
are low risk because they are less complex for the racing codes and the ACT Government as
they involve construction on a greenfield site and would not disrupt operations at existing
facilities. There is also a lower governance risk and stakeholder risk as the options involve
fewer parties and the governance processes can be determined from an equal starting
point between all parties as the new site does not have any existing arrangements to take
into account.
Colocating CHRC at Thoroughbred Park is achievable and does not raise risks about having
to separate different types of animals. If CGRC is also relocated to Thoroughbred Park, this
would be more complex due to the requirement to fit additional facilities onto the site and
provide appropriate physical separation between horses and dogs. The operational risk is
manageable as there would be some disruption to the operations at CRC but it should not
require CRC to significantly alter its racing or training schedule. These options would
require negotiation with CRC to allow CHRC and CGRC to colocate at Thoroughbred Park.
Relocating CHRC to Symonston is also assessed as medium risk but has a different profile of
risks. This option has a high operational risk as it would likely require the full
redevelopment of the site to fit all of the colocated facilities on the current Symonston site.
The medium-high risk options have a higher risk rating because they involve all four parties.
However, moving to a greenfield site makes the option more achievable as the new sites
would be able to be designed without having to account for existing infrastructure. These
options have the highest commercial risk because they involve the redevelopment and sale
of the full EPIC and Thoroughbred Park sites. The options would require negotiation with
CRC about the ACT Government acquiring Thoroughbred Park.
The high-risk option would require substantial redesign of the Thoroughbred Park site to fit
all of the parties on the site and would likely require Thoroughbred Park to cease racing and
training operations while the site is redeveloped. The financial risk is also high as there is
significant uncertainty around how the option would be made to work (for example, fitting
all of the tracks onto the site may require the tracks to be fitted one inside the other and to
access the middle tracks may require construction of tunnels, which would be costly), which
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
may further increase costs. This option would also require all parties to agree to new
governance arrangements and requires CRC to agree to lease its land to the other parties.
Cost-benefit assessment
To realise the benefits from the colocation options, the options need to be financially viable
for the ACT Government.
Table iv presents the Benefit-Cost Ratio (BCR) of each of the three development scenarios
for the ACT Government, under the different colocation options. The net impact on the ACT
Government reflects the relocation costs, development cost and proceeds from urban
renewal.
As can be seen, most of the scenarios generate a positive BCR for the ACT Government,
with the highest net benefits occurring under redevelopment scenario 2 (colocation of all
parties to a greenfield site(s) and the redevelopment of the full EPIC and Thoroughbred
Park sites). The net benefit for the ACT Government is typically higher under a low density
scenario due to the higher stamp duty rates which are levied on detached dwellings.
Table iv: Benefit-cost ratio of options for the ACT Government
Development Scenario
Scenario 1: Full EPIC site,
Low Density
Scenario 2: Thoroughbred Park
and EPIC, Low Density
Scenario 3: Part EPIC site,
Low Density
Scenario 1: Full EPIC site,
High Density
Scenario 2: Thoroughbred Park
and EPIC, High Density
Scenario 3: Part EPIC site,
High Density
Colocation Option
Low
High
Option 1a
Option 3
Option 6
Option 7
Option 8a
Option 4
Option 5
Option 1
Option 2
Option 8
Option 1a
Option 3
Option 6
Option 7
Option 8a
Option 4
Option 5
Option 1
Option 2
Option 8
1.1
0.7
1.3
1.4
1.3
1.3
1.3
1.2
0.9
1.8
1.0
0.7
1.2
1.3
1.3
1.2
1.2
1.2
0.8
1.8
1.4
1.0
1.6
1.7
1.6
1.6
1.5
1.5
1.2
2.1
1.3
0.9
1.5
1.6
1.6
1.5
1.5
1.5
1.1
2.0
Estimates are in current prices with all cash flows indexed over time. Cash flows are discounted at a nominal
discount rate of 9% p.a. over a 30 year evaluation period.
A BCR that is greater than 1 is favourable and means the benefits are greater than the costs, a BCR that is less
than one means the costs are greater than the benefits.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Assessment against objectives
In 2011, the Independent Competition and Regulatory Commission (ICRC) released its
report into the future of the ACT racing industry. It recommended that the ACT
Government undertake a detailed investigation into the feasibility of colocating the three
different racing codes at the one location. The ICRC concluded that the potential benefits
for the racing industry from colocation are more efficient use of shared facilities, the better
utilisation of capital across the three codes and increased standards of the facilities.
Drawing on the findings of the ICRC’s report and the requirement for the ACT Government
to benefit from urban renewal to deliver the colocation options, our analysis has been
guided by two core objectives:

Optimising investment and leveraging synergies for the racing industry and EPIC; and

Optimising urban renewal in the ACT to enable financing of colocation alternatives.
We have disaggregated these objectives into the following elements which provide detailed
criteria against which to assess each of the options:

Deliver a practical and achievable colocation solution.

Increase operational efficiency and synergies for the racing industry and EPIC.

Improve the financial sustainability of EPIC and the racing industry through enabling
additional revenue opportunities.

Address constraints at current sites (e.g. noise and governance constraints).

Ensure financial viability of the colocation options for the ACT Government.

Deliver colocation by undertaking urban renewal.
The results of this analysis are contained in Table v. As can be seen, the assessment
determined that options 4 and 5 (relocation of all of the racing codes and EPIC at a
greenfield site) had the highest alignment with the overall objectives of the project.
Table v: Overall alignment with objectives
Low alignment
Medium alignment
High alignment
Options 1, 1a, 2 and 3
Options 6 and 7
Options 4 and 5
These options involve
colocating a mix of CHRC,
CGRC and EPIC at
Thoroughbred Park.
CHRC and EPIC (with and without
CGRC) at a greenfield site
Relocating all of the clubs
and EPIC to a greenfield site
(option for EPIC to be on a
separate site)
Options 8 and 8a
CHRC and CGRC at Symonston
(EPIC consolidated or moved to
greenfield site)
The options with the lowest alignment to the objectives for the colocation are the options
that would involve moving the other racing codes and EPIC to Thoroughbred Park. These
options would provide some synergies and operational efficiencies, however the
complexity of colocation on an existing site mean the efficiencies are lower than they would
be at a at a greenfield site. These options provide some opportunities for urban infill, but
fewer than the other options as they would not involve developing the Thoroughbred Park
site. Our analysis also shows that Options 2 and 3 are financially prohibitive and
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
unaffordable for the ACT Government, and while Options 1 and 1a are within the
Government’s means, the net benefit to the ACT Government would be lower than under
the other options.
The options with a medium alignment would provide synergies and operational efficiencies
for the racing industry and EPIC. Additional revenue opportunities would be possible and
could be further enhanced through the design of a new site. These options may also
address the current noise restrictions and could increase autonomy for CHRC. These
options all provide an opportunity for urban renewal although not as much as the options
including Thoroughbred Park. All of these options appear to be affordable for the ACT
Government. However, the revenue to the ACT Government is lower because they do not
involve developing Thoroughbred Park, although this is partly offset by lower relocation
costs. The colocation of EPIC and CHRC at a greenfield site would not prevent the future
colocation of CRC, and could be undertaken as a first step.
The options with the highest alignment to the objectives for the colocation are the options
that involve moving all of the racing codes and EPIC to a greenfield site or sites. These
options would provide operational efficiencies and additional revenue opportunities, which
could be included as part of the design of the new facilities. These options would also
address the constraints of the current sites. They also provide the greatest opportunity for
the ACT Government for urban renewal opportunities, and the ability to finance colocation.
However, these options have a medium-high risk rating, which needs to be considered in
deciding whether the comparative benefits of these options are worth the additional risk.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Risk versus strategic alignment
In addition to the strategic alignment of each of the options, it is also important to consider
the relative risks of each option. This is shown in the figure below.
At this stage, the risk assessment has not considered what actions the ACT Government
could take to mitigate or ameliorate the identified risks. Consideration of risk mitigation
strategies would need to be undertaken as part of the next stage of analysis.
Figure i: Risk versus strategic alignment for colocation options
High strategic alignment
Option 4
Option 5
Option 7
Option 8a
Option 6
Option 8
High risk
Low risk
Option 1
Option 1a
Option 3
Proposed colocation site
Thoroughbred Park
Option 2
Greenfield site
Symonston
Low strategic aligment
Source: Deloitte Access Economics.
Figure i shows that while Options 4 and 5 (relocating all of the clubs and EPIC to a
greenfield site) have the highest strategic alignment, they also have a relatively higher risk
profile than the options with a medium strategic alignment.
Options 8 and 8a (relocating CHRC to Symonston, with EPIC remaining on site or moving to
a greenfield site) have a lower strategic alignment but are also lower risk, compared to
Options 4 and 5. Noting that these options would require CGRC to cease operations while
new facilities were constructed and the CGRC are uncertain that this option would be able
to be easily implemented due to concerns around topography of the current site.
Options 6 and 7 (EPIC and CHRC relocated to a greenfield site, with and without CGRC),
have a lower risk and only a slightly reduced strategic alignment compared with Options 4
and 5.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Options 2 and 3 are not financially viable. Furthermore, all the options to colocate at
Thoroughbred Park have a lower strategic alignment, with generally higher risk. Given that
they also generate a lower (or negative) financial benefit, we consider that these options
are not worth pursuing further.
Conclusion
Our analysis suggests that there are a number of colocation options that are feasible and
align with the objectives for this project. Further, our analysis suggests that these options
are also financially viable for the ACT Government. The colocation options that we have
assessed as worthy of further consideration are:

Option 4 or 5 – colocate the racing codes and EPIC at a greenfield site, with an option
for EPIC to be at a separate greenfield site;

Option 6 or 7 – colocate the CHRC and EPIC at a greenfield site, with or without CGRC;

Option 8 or 8a – colocate CHRC and CGRC at Symonston with EPIC either consolidated
on its existing site or at a greenfield site. This option is more complicated than
colocation at a greenfield site but could be pursued if a suitable greenfield site cannot
be identified; and

Staged approach – implement Option 6 or 7 in the first instance, with a long-term plan
to achieve colocation of all the racing codes and EPIC (i.e. Option 4 or 5).
Next steps
The ACT Government may now wish to undertake further investigation of some of these
options with the racing industry. There are two elements to the further work that is
required to progress these options:

Engagement with the racing industry; and

Detailed analysis of the colocation options and urban renewal possibilities.
Acknowledgments
Deloitte Access Economics would like to acknowledge the assistance provided by the ACT
racing clubs and EPIC in the preparation of this report. Their assistance was essential to
understanding how the options would operate, the facilities required under the different
colocation options and providing the context and background for the report. We thank the
ACT racing industry and EPIC for their time and contribution to the report.
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
1 Introduction
The ACT Government is currently assessing the feasibility of colocating the three ACT racing
clubs – the Canberra Racing Club, the Canberra Harness Racing Club and the Canberra
Greyhound Racing Club – onto a single site. Colocation of Exhibition Park in Canberra (EPIC)
with the racing codes is also being considered in light of the proximity of EPIC to
Thoroughbred Park (the current site of the Canberra Racing Club) and because the Harness
Racing Club is currently located at EPIC. The options for the new colocated site are either at
Thoroughbred Park or a greenfield site that has yet to be identified.
Economic Development within the Chief Minister, Treasury and Economic Development
Directorate engaged Deloitte Access Economics to undertake a feasibility study of the
colocation options for the three racing clubs and EPIC. The study includes three main
sections:

As assessment of the strategic benefits, costs and risks of each option to determine
the nature of the benefits that could be realised, the likely costs for the ACT
Government, racing codes, EPIC and users of the facility and to identify the risks of each
option for these parties.

An overview of the economic environment in the ACT to support the financial
assessment of the colocation options.

A cost-benefit analysis for each of the options to determine the impact of the options
on the ACT Government.
1.1 Purpose of the report
The purpose of this report is to assess the different options for the potential colocation of
the racing codes and EPIC. This report is the first stage of the ACT Government’s analysis of
the options for the racing codes and EPIC. The outcomes of Stage 1 will determine the
second stage of work on possible colocation and whether or not the Territory will pursue
these options further.
Stage 1 does not include a detailed design of a colocated site, an assessment of the location
of a potential greenfield site or the governance and operating arrangements for a colocated
site. Further analysis would be required to understand these elements as part of a second
stage of work, if the ACT Government chose to investigate this further.
1.2 Structure of the report
The remainder of the report is structured as follows:

Chapter 2 – outline of the broader ACT Government priorities that are relevant to this
study and the framework for analysis for the report;

Chapter 3 – our approach for the study, including the options that we have assessed
and the key assumptions underpinning our analysis
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities

Chapter 4 – qualitative cost-benefit analysis and a high-level risk assessment of each of
the colocation options;

Chapter 5 – assessment of the economic and demographic trends in the ACT;

Chapter 6 – cost-benefit analysis of each of the colocation options from the ACT
Government’s perspective;

Chapter 7 – overarching assessment of the colocation options; and

Chapter 8 – key considerations and next steps for the ACT Government.
The report also contains two appendices:

Appendix A – summary of stakeholder consultations and the feedback from the ACT
Racing Codes on the report.

Appendix B – provides details of the views on the colocation from the racing industry
and EPIC; and

Appendix C – provides the requirements for a new facility for the racing industry and
EPIC.
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
2 Background
In 2010, the ACT Government directed the Independent Competition and Regulatory
Commission (ICRC) to undertake a review of the ACT racing industry. The review was
requested to consider an appropriate system of product payments; an appropriate funding
outcome for the ACT racing industry; an appropriate allocation of ACT budget funding
among the three racing clubs; and the future structure of the ACT racing industry.
In 2011, the ICRC released its final Report into the future of racing in the ACT. The ICRC
recommended that the ACT Government and the three racing clubs undertake a detailed
investigation into the costs and benefits of replacing existing administrative structures and
establishing a single independent administrative body to oversee the management of the
three racing codes. Following this, the ICRC recommended that there should also be a
detailed investigation into the feasibility of colocating the three different racing codes at
one location, which the ACT Government committed to do in the 2012 election.
This report considers the feasibility of the colocating the racing codes but does not consider
changes to the governance structures of the racing clubs. The colocation of the racing
industry may also provide additional vacant land along Flemington Road that will provide
opportunities for urban renewal.
This chapter provides details of the broader context that feeds into the analysis in this
report in terms of colocation, urban renewal and the framework we have used to assess the
colocation options.
2.1 Colocation
2.1.1
ACT racing industry
The ACT racing industry consists of three clubs that represent the three racing codes:
thoroughbred, harness and greyhound racing. The clubs are located at separate venues and
are run independently.
The Canberra Racing Club is located at Thoroughbred Park and the Club has a 99-year lease
on the land that terminates in 2100. The facilities at Thoroughbred Park include two turf
tracks, a synthetic track and a sand track, a grandstand with function facilities, a betting
ring and offices for both race days and the general operation of the club, stables and
training facilities, including an equine pool and horse walkers. The Club holds 25 races per
year, with two big race days on Melbourne Cup day and Black Opal Stakes day. It is the
largest training venue in New South Wales outside of Sydney, there are around 250 horses
stabled at Thoroughbred Park and they train every day of the year.
The Canberra Harness Racing Club is located at EPIC and the facilities are rented by the
Club. They have access to a race track and a training track, a grand stand and stables. The
Club holds 20 races per year and horses train every day of the year in the morning and
evening. The Club is constrained in what other services it can offer because it leases the
facilities from EPIC and does not own or have the right to build additional facilities. CHRC
would support moving to a greenfield site where they have greater autonomy over the use
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
of the site, whereas moving to Thoroughbred Park would not address this concern. The
Club is also constrained when it can hold races due to other events held at EPIC, for
example, it cannot use the track when the Canberra Show is on.
The Canberra Greyhound Racing Club is located at Symonston. It rents the land from the
ACT Government at a rate of $14,000 per annum. The facilities at Symonston include a race
track, kennels, a grandstand and administration buildings. The Club holds 44 races per year
and trials twice per week. The land is also used for some additional purposes unrelated to
greyhound racing, such as an outdoor fitness club which provides an additional source of
revenue. The Club also allows Club Members to access the enclosed, off the leash, dog
exercise areas to encourage responsible dog ownership, exercise and play.
2.1.2
Exhibition Park in Canberra
Given the proximity of EPIC to Thoroughbred Park and the potential for synergies between
EPIC and the racing codes, the investigation has been broadened to consider possible
options to relocate EPIC.
EPIC is a Territory-owned exhibition centre and is the largest of its kind in the ACT and
surrounding region. EPIC hosts indoor and outdoor events for businesses and the
community. Principal events include the Royal Canberra Show, Summernats Street Machine
Car Festival, the National Folk Festival, the Capital Region Farmers’ Market, the Home and
Leisure Show, Ski Expo and the National Wine Show. There are many other events that use
part of the site for shorter periods each year, including trade fairs, warehouse sales and
community events.
There are also a number of long-term tenants that use the EPIC site, including the Royal
National Capital Agricultural Society, the organisers of Summernats, the ACT Canine
Association, the Canberra Harness Racing Club and the ACT German Shepherd Dog
Association.
EPIC is managed by the Exhibition Park Corporation (EPC). EPC’s mission as set out in its
Annual Report (EPC 2013) is:
“To provide an economic and environmentally sustainable venue facility,
enriching the economic and cultural development of Canberra and the region
by providing indoor and outdoor opportunities for entertainment, recreation
and commercial interests.”
In 2012-13, EPIC received the majority of its funding from user charges, $3,534,000 or 84%
of total income. This included $202,000 or 5% from the ACT Government through user
charges. EPIC also receives a small proportion of income from the Government as payments
for outputs, $412,000 or 10% of total income in 2012-13 (EPC 2013).
One of the objectives for the EPC is to become self-sufficient. Looking forward, EPC expects
the estimated income for 2013-14 to increase with anticipated increases in events, camping
revenue and additional income streams, such as the low cost tourist accommodation
development.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
2.2 Urban renewal
In order for the colocation options to be implemented, it will require the ACT Government
to realise benefits from urban renewal. Any urban renewal options will need to be
considered in the context of the current planning policies and the other ACT Government
urban renewal priorities.
2.2.1
Planning considerations
The development of the EPIC and Thoroughbred sites will require consideration of the ACT
land supply strategy, the Territory Plan and the National Capital Plan, because the EPIC site
is located on the Federal Highway. The areas will also require rezoning from broad acre to
allow for residential and commercial development. For the purposes of this report it is
assumed that the ACT Government will rezone the land as appropriate.
ACT Land Release Programs
Each year the ACT Government prepares four-year Indicative Land Release Programs
setting out the Government’s intended program of residential, commercial, industrial,
community and non-urban land releases. The Programs are indicative and are subject to
change as market conditions alter or as Government priorities are adjusted.
The ACT Government has set out a number of objectives that the land release program
seeks to fulfil. The objectives as set out in the Land Supply Strategy (EDD 2013) are:

promoting the economic and social development of the Territory, including
contributing to the vision set out in the Canberra Plan of a city representing the best in
Australian creativity, community living and sustainable development;

meeting the ongoing demand for residential land in the Territory;

establishing an appropriate inventory of serviced land;

facilitating the provision of affordable housing;

maintaining flexibility of land releases to ensure they reflect market conditions and do
not contribute to rapid land price changes;

providing a variety of land and housing options;

addressing the locational objectives set out in key Government documents such as the
Territory Plan and the ACT Planning Strategy;

achieving satisfactory returns to the Territory from the sale of unleased Territory land;
and

assisting in the operation of a competitive private sector land development market.
The ACT Government released the current Indicative Residential Land Release Programs in
June 2013 for the period 2013-14 to 2016-17. Since then, the estimated number of
dwellings that will be released has been reduced. Table 2.1 shows the revised target
number of dwellings for release over this period. The reduction in dwelling sites over the
four years reflects the ACT Government’s expectation that the ACT economy will slow over
the period. This level of supply is expected to maintain stable land prices, improve housing
affordability and allow the Government to establish an inventory of unsold sites.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Table 2.1: ACT Government dwelling sites 2013-14 to 2017-18
Dwelling
sites
2013-14
2014-15
2015-16
2016-17
2017-18
Total
4,000
3,600
3,300
3,300
3,300
17,500
Source: Economic Development Directorate estimates, March 2014.
The ACT Government through the ACT Planning Strategy has set a target to deliver 50 per
cent or more of new housing through urban intensification. This objective is designed to
support greater urban sustainability and increase the focus for development on Canberra's
town centres and along the major public transport corridors.
The Territory Plan
The Territory Plan sets out the ACT Government’s vision for the development of the
Territory. The objectives of the Plan are to:
“ensure, in a manner not inconsistent with the national capital plan, the
planning and development of the ACT provide the people of ACT with an
attractive, safe and efficient environment in which to live, work and have their
recreation.” (ACT Government 2008).
The Territory Plan also sets out the current zoning for land in the ACT. The EPIC and
Thoroughbred Park sites are currently zoned as broadacre. For the purposes of this analysis,
we have assumed that the ACT Government would agree to change the zoning to
residential, if it decided to pursue further development of the sites.
The National Capital Plan
The objective of the National Capital Plan (2013) is:
“to ensure that Canberra and the Australian Capital Territory are planned and
developed in accordance with their national significance.”
The National Capital Plan provides a framework determined by the Commonwealth for land
use and development throughout the Territory. Areas of land that have the special
characteristics of the National Capital are labelled Designated Areas. This includes the main
approach routes and avenues. The Plan may set out detailed conditions of planning, design
and development in Designated Areas.
The National Capital Plan covers some of the EPIC site as it is located on one of the main
approach routes, along the Federal Highway. The area covered by the Plan is a 200m zone
from the centre line of the main approach route and it runs the full length of the Federal
Highway barrier. There are special requirements for developments in this zone that are set
out in a Development Control Plan that was developed by the National Capital Authority in
2010. It covers requirements such as the height, width and quality of any buildings,
landscaping, lighting and the visual impact of car parking.
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
2.2.2
Related ACT Government urban renewal priorities
The ACT Government is concurrently pursuing large-scale projects in the central Canberra
area, including City to the Lake and the Northbourne Avenue redevelopment. The potential
redevelopment of the EPIC and Thoroughbred Park sites would complement these projects
and could be an important part of the ACT Government’s strategy to revitalise the city from
Lake Burley Griffin as far as the Gungahlin Town Centre.
City to the Lake
City to the Lake is the ACT Government's long term planning initiative for Central Canberra,
which aims to bring more lifestyle and residential facilities closer to Lake Burley Griffin. The
plan features a number of distinct elements:

Residential apartments catering for 15,000 to 20,000 new residents;

Commercial, retail and cultural facilities;

The Australia Forum, which encompasses a new convention and exhibition centre; and

A 30,000 seat stadium.
Any development at the EPIC and Thoroughbred Park sites is outside of the areas that will
be developed for City to the Lake. Plus, the City to the Lake development will be focused on
apartments whereas the potential redevelopment at EPIC and Thoroughbred Park is more
likely to be houses and townhouses. However, the interaction between construction and
release of land for these two projects would need to be considered.
Northbourne Avenue redevelopment
The ACT Government is also planning to release government land along Northbourne
Avenue for residential and other developments to increase density along the corridor. The
impact of the development along the Northbourne corridor will need to be considered
alongside the potential development at the EPIC and Thoroughbred Park sites. The timing
of these developments is likely to be different with the ACT Government likely to release
the land along Northbourne Avenue earlier than our estimated timeline for development
at EPIC or Thoroughbred Park. The dwelling types are also likely to be different, with more
apartments likely to be built along Northbourne Avenue, and will cater for a different
market.
Gungahlin Town Centre
In 2010, the ACT Government released its Master Plan for the Gungahlin Town Centre.
Gungahlin is expected to grow from 32,500 residents to 55,000 by 2019, and ultimately is
expected to have between 90,000 and 100,000 residents by the time Gungahlin is fully
developed (ACT Planning Authority 2010, p9). In light of the increased development in
Gungahlin, it is prudent to consider the opportunities along the entirety of the City to
Gungahlin corridor.
Capital Metro
The ACT Government has committed to constructing Stage 1 of the Capital Metro light rail
project between Gungahlin and Canberra City, with construction due to begin in 2016, and
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
expected to take two to three years. The land currently occupied by EPIC and Thoroughbred
Park is an important component of this corridor and consideration of the future uses of this
land will be critical to the Territory’s broader land supply program, transport strategy and
land use policies.
2.3 Framework for analysis
The focus of this report is on the potential colocation options for the ACT racing clubs and
EPIC and the resulting opportunities for urban renewal. Our analysis has been guided by
two core objectives:

Optimising investment and leveraging synergies for the racing industry and EPIC; and

Optimising urban renewal in the ACT, including revenue potential and broader
community benefits.
In order to provide a more detailed assessment of the options and a high-level ranking of
the extent that each option addresses these objectives, we have disaggregated the
objectives into elements that are used to assess the relative merit of each option. Each of
these elements is assessed at different stages of the report and a consolidated assessment
is provided in Chapter 7.
Detailed objectives
Assessment method
Deliver a practical and achievable colocation
solution.
Risk assessment (Chapter 4)
Increase operational efficiency and
synergies for racing industry and EPIC.
Strategic assessment (Chapter 4)
Improve racing industry and EPIC financial
sustainability through enabling additional
revenue opportunities.
Strategic assessment (Chapter 4)
Address constraints at current sites (e.g.
noise and governance constraints).
Strategic assessment (Chapter 4)
Ensure financial viability of the colocation
options for the ACT Government.
Financial assessment (Chapter 6)
Deliver colocation by undertaking urban
renewal.
Strategic assessment (Chapter 4)
2.4 Stakeholder consultations
Deloitte Access Economics undertook a series of stakeholder consultations, including site
visits, with the three ACT racing codes and EPIC as part of the analysis. Through the
stakeholder consultations, we were able to gather information on:

the facilities that the racing codes and EPIC would require at a new site;

issues that would need to be addressed before colocation or relocation could occur;

possible benefits and opportunities from colocation or relocation; and

the views of each of the racing codes and EPIC on the proposed options.
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
A summary of the consultations undertaken is included in Appendix A. A detailed
explanation of the issues that the racing industry and EPIC have raised in relation to the
colocation options and a list of their requirements for a new site are included in Appendices
B and C respectively.
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
3 Approach
The following chapter outlines the approach taken in this feasibility study. It sets out the
options and scenarios for the analysis, the assumptions we have used and the stakeholder
consultations that we have undertaken throughout the course of the project.
3.1 Colocation options
There are a variety of permutations of the colocation options that could be considered. We
have identified ten options that cover the breadth of the permutations available. These are
set out in Table 3.1.
Table 3.1: Colocation options for analysis
CRC
CHRC
CGRC
EPIC
Land made available
Option 1


Option 1a


Option 2



Option 3




EPIC site
Thoroughbred Park
Part of EPIC site
*
EPIC site
Part of EPIC site
Greenfield site (to be determined)
Option 4




EPIC and
Thoroughbred Park
Option 5



*
EPIC and
Thoroughbred Park
Option 6



EPIC site
Option 7


EPIC site
Symonston (current Greyhound track)
Option 8


Option 8a


Part of EPIC site
*
EPIC site
* Under options 1a, 5 and 8a, EPIC would be located to a separate greenfield site.
This analysis considers three options for the Thoroughbred Park site. The simplest option
would be to move the Harness Racing Club onto Thoroughbred Park. This option would
provide a significant parcel of land for development and some of the facilities at
Thoroughbred Park would be able to be adapted easily for harness racing. The next option
would be to include the Greyhound Racing Club as well. This would be a bit more difficult in
terms of configuration and providing space for each code. The final option would be to
colocate all of the racing codes and EPIC at Thoroughbred Park. This would involve
significant reconfiguration of the site and would result in the Racing Club having to stop
using the site while this development was underway and requiring the ACT Government to
compensate the Racing Club.
Other options, such as only moving EPIC or the Greyhound Racing Club to Thoroughbred
Park, were not considered as they would not provide benefits to the same scale as making
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
the land used by the Harness Racing Club available and would not have the same synergies
between the codes.
This analysis considers two options for a greenfield site (which is yet to be identified). The
first is to colocate all of the racing clubs and EPIC on a greenfield site. This option makes
available the largest parcel of land. The other option is to move EPIC, the Harness Racing
Club and the Greyhound Racing Club to a greenfield site.
The benefits of relocating racing facilities and using this land for development have been
seen in other parts of Australia, for example the redevelopment of Harold Park and the
relocation of the NSW Harness Racing Club. This example provided benefits for both the
racing industry and for urban renewal. The NSW Harness Racing Club was able to increase
prize money and improve its facilities and the City of Sydney was able to increase
residential dwellings in the inner city and provide additional open public space.
Case study: Harold Park Paceway
Harold Park Paceway was previously owned and administered by the NSW
Harness Racing Club, acting as a raceway since 1902. In 2008, the NSW Harness
Racing Club moved its home from Harold Park to Tabcorp Park Menangle. In
late 2010, Harold Park was sold for $187 million to property developers
Mirvac. The site is 10.6 hectares.
The NSW Harness Racing Club Board made the decision to sell Harold Park in
order to increase the competiveness of the harness racing industry by
generating funds to increase prize money and commence substantial
developments to Tabcorp Park Menangle.
As a result of the park’s sale, $25 million has been provided for the
redevelopment of Tabcorp Menangle Park. NSW Harness Racing Club believes
the redevelopment will make Tabcorp Park the finest harness racing complex
in Australasia. In addition to the redevelopment, a further $100 million will be
invested into securing the financial future of the industry and prize money will
also double across the state.
The redeveloped Harold Park features 1,250 new apartments and terraces, a
new retail quarter and ten acres of parklands which are open for public usage.
The Rozelle Tram Depot which served as an overnight servicing and garaging of
electric tram cars will transform into the centrepiece of the site’s retail
quarter. The depot had stood derelict and essentially empty since the 1960s.
More than 180 buyers have already committed to the development, with
prices starting at $490,000 for a studio apartment and $1.6 million for a
terrace.
Source: City of Sydney, http://www.cityofsydney.nsw.gov.au/vision/major-developments/
harold-park, accessed 4 March 2014.
There is only one feasible new option for the greyhound race track and that is to move the
Harness Racing Club to Symonston as the current site is not large enough for the Racing
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Club or EPIC. However, further investigation of this option could include consideration of
using the vacant land around the current Symonston site, which could make colocation with
CRC and EPIC feasible.
The options were chosen as they provide a solid basis for the ACT Government to be able to
make an informed decision about a way forward. The key information required for the ACT
Government to make a decision will be an understanding of the costs and benefits of each
option for the racing industry and the ACT Government, the costs of relocating the racing
clubs and EPIC, and whether the colocation options are financially viable for the ACT
Government.
3.1.1
Costs of colocation
The colocation costs are influenced by the new location and the other users of the site.
There are three proposed locations for colocating the racing codes and EPIC. They are
Thoroughbred Park, a greenfield site or the current greyhound race track in Symonston.
There are a larger number of options that could be considered in terms of which parties are
colocated on the sites. The permutations that will be covered in the options are:

the Racing Club and the Harness Racing Club;

the Harness Racing Club and the Greyhound Racing Club;

the Racing Club, the Harness Racing Club and the Greyhound Racing Club;

the Harness Racing Club, the Greyhound Racing Club and EPIC;

the Harness Racing Club and EPIC; and

the Racing Club, the Harness Racing Club, the Greyhound Racing Club and EPIC.
The other options that are not included above such as EPIC and the Greyhound Racing Club,
or EPIC and the Racing Club, are not considered likely to proceed as this would leave the
Harness Racing Club without a site, given the leasing arrangements with EPIC. There are
also fewer synergies between EPIC and Greyhound Racing Club.
3.1.2
Sensitivity analysis
We have assessed the impact of a high-cost and a low-cost capital build for each of the
colocation options. The low-cost option is the cost required to meet the minimum
standards required and the high-cost represents the cost of the additional facilities that are
required to meet the strategic and business aims of the racing codes and EPIC.
3.1.3
Assumptions
To inform the modelling of relocation costs for the racing clubs and EPIC, Deloitte Access
Economics undertook consultations with these organisations to determine their
requirements for a new facility. It is assumed that any new or colocated site would meet all
the racing clubs minimum operating requirements and would not impact the ongoing
financial viability of the ACT Racing Clubs.
As part of the consultation, each organisation was asked to identify the minimum facilities
they would require at a new facility, typically their current range of facilities. In addition,
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
the organisations were asked to identify a hypothetical ‘full range’ of facilities that would
allow the organisations to meet all of the strategic and business plans for their operation.
The facilities identified by the organisations under each scenario are detailed in Appendix C.
The costs (contained in Table 3.2) are presented in the following categories:

Race track: this includes racing infrastructure such as the track, race day
kennels/stables, track lighting, track rails, steward facilities, big screens, and jockey
rooms. The costs of EPIC’s infrastructure such as the EPIC and Acton Arenas, the dog
rings, and the Go to Whoa Strip and burn out track for Summernats, are also included.

Buildings: this includes buildings on site such as administration blocks, storage facilities,
function rooms, and licensed premises.

Training facilities: this includes any training tracks, long term kennels/stables, sand
rolls, horse walkers, and equine/canine pools.

Other: this includes any infrastructure which is not included in the other categories,
such as perimeter fencing, roads, and water. EPIC’s campgrounds and other outdoor
areas such as Central Park and Drover Square are included in this category.

Carpark: the cost for the carpark depends on the option chosen.
• If an additional club colocates at Thoroughbred Park, and in the absence of a
modified ACT Government public transport strategy, it was considered
necessary that a multistorey carpark be constructed. The carpark costs could
be reduced if nearby land could be utilised as ‘overflow’ space when
required.
•
The cost estimates are based on data sourced from Rider Levett Bucknall
for a 1,500 space carpark, which is proportionately scaled down based
on the number and scale of clubs operating under each option.
• For the non-Thoroughbred Park options, the cost estimate is based on
regular surface parking, which is significantly cheaper than a multistorey
carpark.

Grandstand: this is based on a 1,500 seat grandstand when all clubs are colocated, and
is proportionately scaled down based on the number and scale of clubs operating under
each option. For a small number of days each year, this facility would be inadequate for
CRC and EPIC. On these days, temporary structures such as marquees and pavilions will
be used to accommodate larger crowds.
• Note that the grandstand represents total seating capacity at each venue.
The grandstand will likely be split into several smaller sections, each of which
is directed at a separate piece of infrastructure, for example a horse racing
track and a greyhound racing track.

Site works: estimated costs are based on subject matter expertise and similar costing
engagements undertaking by Deloitte Access Economics. The site work estimates for
EPIC assume a consolidation of EPIC’s existing footprint to approximately 20 hectares.

Project management, design and planning, and contingency: these were added on as
percentages to the cost of the project at a rate of 5%, 10%, and 20% respectively.
The high cost estimates reflect the improved facilities sought by each club under the 'full
range' option, which is assumed to cost an additional 30% compared to the cost of
constructing the minimum range facilities.
Deloitte Access Economics
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Stage 1: Colocation feasibility study – racing codes and exhibition facilities
Table 3.2: Estimate of relocation costs by category of cost ($ million)
Category
Race track
Buildings
Training
Other
Carpark
Grandstand
Site works
Project
management
Design and
planning
Contingency
Total
Option 1
Min. Max.
Option 1a
Min. Max.
Option 2
Min. Max.
Option 3
Min. Max.
Option 4
Min. Max.
Option 5
Min. Max.
Option 6
Min. Max.
Option 7
Min. Max.
Option 8
Min. Max.
Option 8a
Min. Max.
7.8
10.7
8.7
11.9
11.5
15.5
17.7
23.6
20.3
27.0
20.3
27.0
7.2
9.9
5.4
7.7
5.9
8.2
6.8
9.5
3.9
5.3
16.6
21.9
9.8
13.0
19.0
24.9
13.9
18.3
18.8
24.7
12.9
17.0
12.8
16.9
1.1
1.6
13.8
18.2
3.5
5.2
4.4
6.3
4.9
7.1
6.2
8.8
6.5
9.1
6.5
9.1
5.3
7.8
4.1
6.1
4.2
6.3
5.1
7.5
4.6
6.0
7.3
9.5
7.7
10.1
17.3
22.5
20.2
26.2
20.2
26.2
2.9
3.8
2.8
3.7
0.1
0.2
2.8
3.7
12.0
18.0
14.1
20.8
15.0
22.5
30.0
45.0
4.3
5.6
4.3
5.6
3.0
3.9
2.6
3.3
0.4
0.6
2.6
3.3
4.4
5.7
10.6
13.8
11.3
14.6
18.8
24.4
12.5
16.3
12.5
16.3
8.8
11.4
7.5
9.8
1.3
1.6
7.5
9.8
3.9
5.0
6.4
8.3
6.2
8.0
12.3
16.0
15.4
20.0
12.8
16.7
10.8
14.0
9.2
12.0
3.5
5.0
8.6
11.2
2.0
2.8
3.4
4.6
3.3
4.5
6.1
8.3
4.7
6.1
4.8
6.3
2.5
3.4
2.2
3.0
0.8
1.2
2.4
3.2
4.0
5.6
6.8
9.3
6.6
9.1
12.1
16.5
9.3
12.2
9.5
12.6
5.1
6.8
4.4
5.9
1.6
2.4
4.7
6.3
8.0
11.2
13.6
18.5
13.3
18.2
24.3
33.1
18.6
24.5
19.1
25.1
10.2
13.6
8.9
11.9
3.3
4.7
9.4
12.6
80.3
22.2
31.8
63.7
85.2
54.0
75.5
92.1
125.0
89.6
122.6
163.8
223.1
125.6
165.3
128.7
169.5
68.6
91.5
60.0
Note: minimum cost refers to the cost of constructing the minimum range of facilities requested by clubs. Maximum cost refers to the cost of constructing the full range of
facilities requested by clubs.
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
The specific assumptions for each option are presented below.
Options 1, 2 and 3 - Costs for replicating each club's existing facilities in their entirety were
included, with the exception of CRC. While CRC already has facilities on Thoroughbred Park,
due to space restrictions it was assumed that some of these facilities would need to be
moved, consolidated, re-structured and/or re-built to accommodate new tenants. To
calculate the impact on CRC, we assumed that a proportion of CRC's assets will need to be
redeveloped: 25% under Option 1, 40% under Option 2, and 80% under Option 3.
Option 1a - The same assumptions for Options 1, 2 and 3 were used for this option, with
two key exceptions:

A multistorey carpark was used for Thoroughbred Park, while a (cheaper) single level
carpark was used for the greenfield site.

The cost of replicating EPIC's existing infrastructure in its entirety was used for the
greenfield site.
Options 4, 6 and 7 - The cost of replicating each club's existing infrastructure in its entirety
was included. It was assumed that EPIC's existing infrastructure for functions and licensed
premises was sufficient for accommodating the needs of the other tenants.
Option 5 - The cost of replicating each club's existing infrastructure in its entirety was
included.
Option 8 and 8a - The cost of replicating CHRC's existing facilities in their entirety was
included. As the site does not have the same space restrictions that exist at Thoroughbred
Park, no allowance was made for moving, consolidating, re-structuring and/or re-building
CGRC's existing infrastructure on the site. For 8a, the cost of replicating EPIC's existing
facilities in their entirety was included.
Shared costs - Within each option, some facilities can be shared between the clubs. These
include facilities such as function rooms and licensed premises, grandstand, car park, some
training facilities, office buildings, and a dam. As with the carpark and grandstand costs,
there is an upper cost for the options where all clubs are colocated, which is
proportionately scaled down based on the number and scale of clubs operating under each
option.
There are a few areas of costs that were not included in the analysis. For example:

Other cost synergies that may arise under various options, such as shared
administration and maintenance costs, were not included as estimating them would
require substantial additional analysis beyond the scope of the engagement. These
potential cost reductions were also considered to be immaterial to the overall
cost-benefit analysis.

The modelling does not consider any potential change to the costs that would result
from an increased scale or scope of operations if the ‘full range’ of facilities was
constructed. The cost of building additional infrastructure to cope with an increased
scale or scope of operations has also not been included.

The model does not include the cost of constructing facilities that would not be borne
by the ACT Government, such a colocated hotel, or on-site accommodation for trainers
and other facility staff.
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Colocation feasibility study – racing codes and exhibition facilities
3.2 Urban renewal
In order for the ACT Government to make the colocation options a reality, it needs to
explore options for urban renewal at the vacated sites. Without the proceeds from
redevelopment, the ACT Government will be unable to finance the colocation options.
3.2.1
Development scenarios
There are three primary parcels of land that could be made available under the proposed
options that we have considered for our analysis (the potential development sites are
shown in Figure 3.1 and Figure 3.2).
Figure 3.1: EPIC site
Source: Economic Development Directorate, 2014.
Under the options where EPIC is to remain on site, we have assumed that EPIC would be
consolidated in the southern corner of the site. This is where the majority of the exhibition
space is and would not require construction of new facilities.
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Colocation feasibility study – racing codes and exhibition facilities
Figure 3.2: Thoroughbred Park site
Source: Economic Development Directorate, 2014.
The three development scenarios that we have assessed for this study are:

Scenario 1 - the full EPIC site;

Scenario 2 - the full EPIC and Thoroughbred Park sites; and

Scenario 3 - part of the EPIC site.
The first scenario is to relocate the Harness Racing Club and EPIC, which would make the
full EPIC site available for development (74 hectares). The EPIC site is owned by the ACT
Government and both parties are supportive of moving to a new location. As moving the
Canberra Racing Club is more complex than moving either EPIC or the Harness Racing Club,
moving only the racing club has not been assessed.
The second scenario is to relocate the Harness Racing Club, EPIC and the Canberra Racing
Club. Under this option, the full EPIC site and Thoroughbred Park would be available for
development (a total of 138 hectares).
The third scenario is to develop the land made available by relocating the Harness Racing
Club and consolidating EPIC on the existing EPIC site. The land required for EPIC is 20
hectares, which would provide approximately 54 hectares of land for development. Given
the location of the current facilities on the EPIC site, it would make most sense under this
option for EPIC to be located in the southern part of the site where the existing buildings
are located.
This sort of consolidation is consistent with trends in other jurisdictions. For example,
consolidation of the Melbourne Showgrounds was undertaken in 2006. This project was
successful as the upgraded facilities, while smaller, were able to attract additional visitors
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Colocation feasibility study – racing codes and exhibition facilities
and the project was also able to leverage investment from the private sector. Further
details are provided in the following case study.
Case study: Melbourne Showgrounds
In August 2006, the Royal Agricultural Society of Victoria (RASV) formed a joint
venture with the Victorian Government in order to commence a $108 million
redevelopment of the iconic Melbourne Showgrounds. Prior to the
redevelopment the site was a total of 27 hectares with a holding capacity of
approximately 43,000 attendees.
The redevelopment of the showgrounds revitalised existing structures and
included the construction of the Grand Pavilion, Town Square, new exhibition
space and outdoor animal competition areas. Nine hectares of the existing site
was dedicated to commercial development known as Showground Village,
including a $40 million Coles Group shopping centre just 5.3km from
Melbourne’s CBD.
Keys reasons for the site’s redevelopment included: enhancing the Royal
Melbourne Show, building on the link between urban and rural Victoria and
creating a flexible, multipurpose event and exhibition precinct. The
Showgrounds had become rundown over time and needed enhancements to
remain competitive with similar venues such as the newly built Sydney
Showgrounds located in Homebush.
As a result of the redevelopment, the site decreased by nearly a third in size,
however capacity increased by 16.3%, through upgraded facilities and state of
the art infrastructure. In the first year of operation the redeveloped site
increased visitation by 27% on the previous year. Significantly, RASV’s total
equity increased by $50 million in 2008 following the redevelopment.
In 2012, the showgrounds had more than 950,000 visitors, hosted 800 events
and meetings including the Royal Melbourne Show and 90 other large scale
exhibitions. The National 4X4 & Outdoor Show and Fishing & Boating
Exhibition held its annual show for the 4th consecutive time in 2012 at the
showgrounds, hosting in excess of 10,000 people each day.
Source: Royal Agricultural Society of Victoria 2009, 2008-09 Annual Report.
Moving the Greyhound Racing Club would also provide approximately 11 hectares of
additional vacant land in Symonston. However, the location of this land under the current
planning and strategy for land development in the ACT makes it significantly less valuable
than the land that could be released at EPIC or Thoroughbred Park. Therefore, the benefits
from vacating this land have not been quantified in the Stage 1 assessment. Valuation of
the Symonston land will be required, if Government proceeds with any of the options that
involve relocating the Greyhound Racing Club.
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Colocation feasibility study – racing codes and exhibition facilities
3.2.2
Sensitivity analysis
We have assessed the impact of a low density and a higher density development on the
vacated sites. The sensitivity analysis provides a proxy for the inclusion of the Capital Metro
light rail. The high density scenario provides an indication of the likely types of
development assuming the construction of the Capital Metro light rail goes ahead as
planned and that a light rail station is integrated into the site. The low density scenario
provides an indication of the likely types of development under the current transport
arrangements.
3.2.3
Assumptions
Our approach in determining likely development scenarios over the site(s) included the
following key activities:

Held preliminary high level discussions with leading local real estate agents and
property valuers who operate in the following property sectors:
• residential;
• office; and
• retail.

We gained an understanding of the following key market parameters from these
industry experts:
• expected revenue ranges for vacant land and completed product; and
• expected timing to sell; and
• likely buyer profiles.

Held preliminary high level discussions with large scale real estate development
companies to ascertain the following:
• an indication as to expected profit margins;
• likely development timeframes;
• product type mix;
• construction cost estimates;
• open space provisions; and
• key external works that may be required to facilitate a development of this
scale.

Held preliminary high level discussions with local and national builders to ascertain the
construction costs for residential freestanding dwellings.

Review of industry benchmarks for large scale real estate development including the
following:
• Rawlinsons Construction Handbook 2013; and
• Riders Digest 2014.
We have assessed different options for the land, including different types of residential
development, retail and commercial options, and other uses such as hotels, sporting
facilities or conference and exhibition facilities. The detailed results from this analysis have
been provided to the ACT Government in a separate report.
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Colocation feasibility study – racing codes and exhibition facilities
4 Strategic assessment
The following chapter identifies the strategic costs, benefits and risk for each of the
colocation options.
4.1 Qualitative cost-benefit assessment
Table 4.1 identifies the qualitative costs and benefits for each of the options from the point
of view of the racing industry, EPIC and the ACT Government. Where there are costs and
benefits for the broader ACT community we have captured these under the ACT
Government. At this stage, we have only undertaken a qualitative assessment and as such
this discussion provides an illustration of the trade-offs between the options. However,
many of these costs and benefits could be quantified as part of a more detailed feasibility
study to provide an understanding of the materiality and achievability of these costs and
benefits.
Table 4.1: Qualitative cost-benefit assessment
Costs/Constraints
Benefits
Option 1 – CRC and CHRC at Thoroughbred Park, EPIC consolidated on site
Racing Industry
Potential disruption at Thoroughbred
Park while new facilities are built.
Reduced operational costs with
shared facilities.
Negotiations required between CRC
and CHRC to agree lease arrangements
for CHRC to relocate.
Opportunities for marketing and
creation of a horse and harness
racing hub within the ACT.
Increase operational complexity at
Thoroughbred Park.
CHRC would have access to
services on the CRC site, e.g. the
equine pool.
CHRC would continue to be a tenant
and thus would not increase their
autonomy.
Increase usage for existing assets
at CRC that could be shared, e.g.
grandstand, car parks.
Easier to accommodate CRC and
CHRC on same site, compared to
current situation where CHRC
can’t race when EPIC is holding
large events (e.g. the Canberra
show).
EPIC
No longer receive revenue from CHRC.
Reduced operational costs from
smaller footprint.
ACT Government
Requires negotiations with CRC and
potential compensation to colocate
other parties on site.
Partial redevelopment of EPIC site
would contribute to increasing
urban infill and urban renewal.
Reconfiguration of EPIC site could
impact competiveness of the ACT as
the host for Summernats, which would
reduce visitors to the ACT.
Opportunity to improve the
entrance to the ACT.
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Costs/Constraints
Benefits
Option 1a – CRC and CHRC at Thoroughbred Park, EPIC at a greenfield site
Racing Industry
As per Option 1.
As per Option 1.
EPIC
As per Option 1, plus:
Purpose built facilities.
EPIC would no longer be on the
proposed Capital Metro light rail
route.
The new location could bring
benefits depending on where it is
located, including reduced noise
constraints or being located in a
more convenient location.
Potential relocation costs for other
tenants at the EPIC site, including the
Royal National Capital Agricultural
Society, the ACT Canine Association,
the ACT German Shepherd Association
and the organisers of Summernats.
ACT Government
As per Option 1, plus:
The new location of EPIC could create
costs depending on where it is located,
including building access roads or
public transport routes.
As per Option 1, with
commensurate increase in
benefits from developing total
EPIC site.
Option 2 – CRC, CHRC and CGRC at Thoroughbred Park, EPIC consolidation on site
Racing Industry
As per Option 1, plus:
As per Option 1, plus:
Negotiations would also include CGRC.
Additional opportunities for
marketing and events with all
three racing codes.
Increased effort to coordinate use of
land and scheduling because of
including two types of animals.
EPIC
As per Option 1.
As per Option 1.
ACT Government
As per Option 1, plus:
As per Option 1.
Potential acquisition of adjoining lands
to fit all of the codes at Thoroughbred
Park.
Land would be made available at
Symonston for alternative uses.
Negative impact on businesses located
near CGRC Symonston site.
Option 3 – CRC, CHRC, CGRC and EPIC at Thoroughbred Park
Racing Industry
Thoroughbred Park would need to be
completely redeveloped and CRC
would not be able to continue its
current racing and training activities.
A break in racing may lead to trainers
moving to other venues and not
returning, and could jeopardise
arrangements with SKY.
Additional opportunities for
marketing and events with all
three racing codes and EPIC (e.g.
US County Fairs are held in
conjunction with horse racing
meets).
More complex governance
arrangements.
Increased operational effort to
manage different types of animals
(e.g. horses, dogs and farm animals).
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Costs/Constraints
EPIC
ACT Government
Benefits
Would not be able to hold
Summernats at Thoroughbred Park.
Reduced operational costs with
shared facilities.
Disruption to other EPIC tenants.
Additional opportunities for
marketing and events.
Would require acquisition of adjoining
land to fit all of the codes and EPIC at
Thoroughbred Park.
As per Option 1a.
Option 4 – CRC, CHRC, CGRC and EPIC at a greenfield site
Racing Industry
CRC would lose ownership of site,
resulting in reduced autonomy.
Increased operational effort to
manage three codes and EPIC on one
site, however, will be easier at a
greenfield site.
Purpose built new facilities.
Reduced operational costs with
shared facilities.
Additional opportunities for
revenue streams at purpose built
site.
Opportunity to set up new
governance structures, with all
codes on an even footing.
EPIC
ACT Government
Potential relocation costs for other
tenants at the EPIC site.
Reduced operational costs with
shared facilities.
Potential for scheduling conflicts.
Additional opportunities for
events (e.g. outdoor music
festivals) if relocated to greenfield
area without the current noise
restrictions.
Negotiations (and potential
compensation) required to acquire
Thoroughbred Park.
Full Thoroughbred Park and EPIC
sites available for redevelopment,
which will increase urban infill and
provide additional opportunities
for urban renewal and the
opportunity to transform entry to
ACT.
The new location could create costs
depending on where it is located,
including building access roads or
public transport routes.
Additional activities at the new
site may increase commercial and
economic activity in the ACT.
Catalyst to commence
development of a new greenfield
site (e.g. Tabcorp Park in Melton,
which has now become a focal
point for residential
development).
Option 5 – CRC, CHRC and CGRC at a greenfield site, EPIC at a separate greenfield site
Racing Industry
As per Option 4 plus reduced
operational complexity without EPIC
on site.
As per Option 4 with fewer
synergies and additional
opportunities without EPIC on site.
EPIC
As per Option 4 except no scheduling
difficulties.
As per Option 4 except no
operational cost savings.
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Costs/Constraints
ACT Government
As per Option 4.
Benefits
As per Option 4.
Option 6 – CHRC, CGRC and EPIC at a greenfield site
Racing Industry
Increased operational complexity with
CHRC, CGRC and EPIC on same site.
As per Option 4 with fewer
synergies and additional
opportunities without CRC on site.
EPIC
As per Option 4, except with reduced
scheduling difficulties.
As per Option 4, except with
reduced operational cost savings.
ACT Government
As per Option 4, without need to
acquire Thoroughbred Park.
As per Option 4, except without
urban infill and transport
infrastructure benefits of
redeveloping Thoroughbred Park.
Opportunity remains to include
CRC on site at a later stage.
Option 7 – CHRC and EPIC at a greenfield site
Racing Industry
Increased operational complexity with
CHRC and EPIC on same site.
As per Option 4 with fewer
synergies and additional
opportunities without CRC and
CGRC on site.
EPIC
As per Option 4, except with reduced
scheduling difficulties.
As per Option 4, except with
reduced operational cost savings.
ACT Government
As per Option 4, without need to
acquire Thoroughbred Park.
As per Option 6.
Option 8 – CGRC and CHRC at Symonston, EPIC consolidated on site
Racing Industry
Would require full redevelopment of
Symonston site and greyhound racing
will have to cease while this occurs.
May impact on revenue streams,
including SKY agreement and fitness
club that leases part of the site.
Potential to increase autonomy for
CHRC.
Reduced operational costs with
shared facilities.
Opportunities for additional
events and marketing.
Additional revenue opportunities,
e.g. purpose built fitness area for
current on-site fitness business.
EPIC
As per Option 1.
As per Option 1.
ACT Government
Would require negotiation with CGRC,
but less complicated because CGRC is
leasing its land.
Partial redevelopment of EPIC site
will contribute to increasing urban
infill and urban renewal.
Reconfiguration of EPIC site could
impact competiveness of the ACT as
the host for Summernats, which would
reduce visitors to the ACT.
Opportunity to improve the
entrance to the ACT.
Opportunity to move CRC at a
later stage on to adjoining vacant
lands.
Option 8a – CGRC and CHRC at Symonston, EPIC at greenfield site
Racing Industry
As per Option 8.
As per Option 8.
EPIC
As per Option 1a.
As per Option 1a.
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Costs/Constraints
ACT Government
As per Option 8, plus:
The new location of EPIC could create
costs depending on where it is located,
including building access roads or
public transport routes.
Benefits
As per Option 8, with
commensurate increase in
benefits from developing total
EPIC site.
Sources: Stakeholder consultations and Deloitte Access Economics analysis.
4.2 Risk assessment
There are risks associated with the colocation options. We have undertaken a high-level
analysis of the risks associated with each option. The risks are assessed from the
perspective of the ACT Government. These include:

Achievability risk – can the option be implemented? Will it require significant changes
to current legislative or planning processes?

Commercial risk – what is the risk that the option will not be commercially viable?

Operational risk – what is the risk that the option will negatively impact on the
operations of the racing industry or EPIC? Will the option disrupt the operation of the
industry while construction occurs?

Financial risk – does the option open the ACT Government up to financial risks?

Governance risk – does the option create risks for the governance structure of the new
facility?

Stakeholder risk – how are stakeholders likely to respond to the options?
Table 4.2 provides an assessment of each of the options against the risk criteria, using a
three point scale (high, medium, low). This assessment has not considered what actions the
ACT Government could take to mitigate or ameliorate the identified risks.
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Colocation feasibility study – racing codes and exhibition facilities
Table 4.2: High-level risk assessment - colocation options
Achievability Commercial
risk
risk
Operational
risk
Financial
risk
Governance
risk
Stakeholder
risk
Option 1 – CRC and CHRC at Thoroughbred Park, EPIC consolidation on site
Low
Low
Medium
Low
High
Medium
High
Medium
Option 1a – CRC and CHRC at Thoroughbred Park, EPIC at a greenfield site
Low
Medium
Medium
Medium
Option 2 – CRC, CHRC and CGRC at Thoroughbred Park, EPIC consolidation on site
Medium
Low
Medium
Medium
High
Medium
High
High
Medium
High
Medium
High
Option 3 – CRC, CHRC, CGRC and EPIC at Thoroughbred Park
High
Medium
High
Option 4 – CRC, CHRC, CGRC and EPIC at a greenfield site
Medium
High
Low
Option 5 – CRC, CHRC and CGRC at a greenfield site, EPIC at a separate greenfield site
Medium
High
Low
High
Medium
High
Low
Medium
Low
Low
Low
Medium
Low
Low
Low
Medium
Low
Medium
Option 6 – CHRC, CGRC and EPIC at a greenfield site
Low
Medium
Option 7 – CHRC and EPIC at a greenfield site
Low
Medium
Option 8 – CGRC and CHRC at Symonston, EPIC consolidation on site
Medium
Low
High
Low
Option 8a – CGRC and CHRC at Symonston, EPIC at a greenfield site
Medium
Medium
High
Low
Source: Deloitte Access Economics analysis.
Based on this assessment, the options can be grouped into four categories (low risk,
medium risk, medium-high risk and high risk) according to the aggregate risk for the
options.
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Colocation feasibility study – racing codes and exhibition facilities
Table 4.3: Options categorised by risk
Low risk
Medium risk
Medium-high risk
High risk
Options 6 and 7
Options 1, 1a and 2
Options 4 and 5
Option 3
CHRC and EPIC (with
and without CGRC)
at a greenfield site
CHRC located at
Thoroughbred Park with
and without CGRC (EPIC
consolidated or moved
to greenfield site)
Relocating all of the
clubs and EPIC to a
greenfield site (option
for EPIC to be on a
separate site)
Locating all of the
racing clubs and
EPIC at
Thoroughbred Park
Options 8 and 8a
CHRC and CGRC at
Symonston (EPIC
consolidated or moved
to greenfield site)
Source: Deloitte Access Economics analysis.
4.2.1
Low risk options
The low risk options are relocating EPIC and CHRC to a greenfield site with and without
CGRC. These options are low risk because they are easily achievable as they involve
construction on a greenfield site and would not disrupt operations at existing facilities.
There is also a lower governance risk and stakeholder risk as the options involve fewer
parties and the governance processes can be determined from an equal starting point
between all parties as existing arrangements would not need to be taken into account.
These options have a medium risk rating for commercial risks as they involve the sale of the
whole EPIC site and a medium risk rating for financial risk as the relocation costs are higher
when they involve relocating EPIC.
4.2.2
Medium risk options
The medium risk options are relocating CHRC to Thoroughbred Park with EPIC either staying
on site or relocating to a greenfield site, relocating CHRC and CGRC to Thoroughbred Park
and relocating CHRC to Symonston with the CGRC.
Options 1 and 1a have a similar risk profile. The key difference is that moving EPIC to a
greenfield site increases the relocation costs and the commercial risk as it involves
development of a larger site. These options both have a low risk for achievability as moving
CHRC to CRC is assessed as being easily manageable and does not raise risks associated with
managing different types of animals on site. The risk rating for operational risks is medium
as there would be some disruption to the operations at CRC but these should be
manageable and should not require CRC to significantly alter its racing or training schedule.
The stakeholder risk is medium as it would require some negotiation with CRC to allow
CHRC to colocate at Thoroughbred Park. Related to this, the governance risk is high as it
would require negotiation between CRC and CHRC on leasing agreements.
Relocating CHRC and CGRC to Thoroughbred Park has a similar risk profile to Options 1 and
1a. The achievability risk would increase as there would be increased complexity with fitting
all of the facilities onto the site and providing appropriate physical separation between
horses and dogs on the site. This was raised during our consultations and experience from
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Colocation feasibility study – racing codes and exhibition facilities
other facilities is that there needs to be physical separation as relying on timetabling has
not been successful in practice.
Relocating CHRC to Symonston has a similar aggregate risk but a different spread of risks.
This option has a high operational risk as it is likely to require the full redevelopment of the
site to fit all the facilities on the Symonston site.
4.2.3
Medium-high risk options
The medium-high risk options are relocating all of the clubs and EPIC to a greenfield site,
with EPIC to either be on the same site or a separate greenfield site. These options have a
higher risk rating than the other options because they involve all four parties, however,
moving to a greenfield site makes the option more achievable as the new sites would be
able to be designed without having to account for existing infrastructure. These options
have the highest commercial risk because they involve the redevelopment and sale of the
full EPIC and Thoroughbred Park sites for residential use. These options have a high
financial risk because relocating all of the parties would have the highest cost and the
additional requirements for moving all parties increases the uncertainty of costs. The
options also have a higher stakeholder risk as they would require negotiation with CRC
about the ACT Government acquiring Thoroughbred Park.
4.2.4
High risk option
The high-risk option is to colocate all of the clubs and EPIC on the Thoroughbred Park site.
This option is high risk in four of the categories. Achievability risk and operational risk are
high, because it would require substantial redesign of the Thoroughbred site to fit all of the
parties on the site and would likely require Thoroughbred Park to cease racing and training
operations while the site is redeveloped. The financial risk is also high as this is the highest
cost option and there is significant uncertainty around how the option would be made to
work, which may further increase costs. The governance risk is also high, as it would require
all parties to agree to new governance arrangements and requires Thoroughbred Park to
agree to lease its land to the other parties.
4.2.5
Risk mitigation
There are also options that the ACT Government could pursue to mitigate these risks, and
would likely be undertaken as part of a detailed feasibility study, including:

additional negotiation could be undertaken to expand the Thoroughbred Park or
Symonston sites to include neighbouring blocks of land, which would increase the size
of the sites and make it easier to colocate the facilities on site and reduce the
operational impact on the existing tenants;

undertake detailed market analysis of the demand from developers for the EPIC and
Thoroughbred Park sites to inform timing of land sales and the type of dwellings;

identify a location for the greenfield site; and

undertake detailed design and assessment of the new colocated sites to provide
detailed costs and to ensure the feasibility of colocation on site.
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Colocation feasibility study – racing codes and exhibition facilities
5 Economic environment
The following chapter discusses the economic environment and key economic variables
that affect the level of property demand in the ACT and provides important context for the
urban renewal opportunities.
5.1 Economic trends
A number of macroeconomic variables influence demand for housing, including population
growth and housing affordability, which in turn is influenced by income growth and interest
rates. At the same time, the supply of housing is influenced by the rate of land release and
construction costs.
The past year has seen a divergence in property markets across Australia. Information
available from RP Data-Rismark shows modest housing price growth over the last
12 months in Hobart, Canberra, Darwin, Adelaide and Brisbane, but rapid gains in
Melbourne (8.5% growth), Perth (9.9%) and Sydney (14.5%). Low interest rates and
relatively modest residential housing construction suggest that total house price growth is
likely to remain strong for the immediate future. That said, dwelling approvals have
increased strongly over the last year, and a lift in housing construction activity is expected.
Chart 5.1 shows an expectation for interest rates to remain low in the short term. Inflation
is contained within the Reserve Bank of Australia’s target band of 2-3% over the cycle.
Chart 5.1: Australian interest rates
20%
18%
Standard variable mortgage rates
16%
14%
90 day bank bill rates
12%
10%
8%
6%
4%
2%
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Source: Deloitte Access Economics, Business Outlook, March 2014.
Meanwhile, a better global economic outlook may provide support for lower mortgage
interest rates. The current gap between short-term interest rates and the standard variable
mortgage interest rate remains elevated after increasing sharply during the global financial
crisis (GFC). Since the GFC, weakness in global financial markets has driven up the price of
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Colocation feasibility study – racing codes and exhibition facilities
wholesale funding to Australian banks. That has in turn driven up the price of loans to
Australian mortgage holders. As conditions on global markets continue to improve, this gap
can be expected to moderate.
Chart 5.2: Housing investment as a share of GDP
Share of real GDP
7%
Forecast
6%
5%
4%
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Source: Deloitte Access Economics, Business Outlook, March 2014.
On a national level, investment in residential housing construction has been falling as a
share of Australia’s economy for almost a decade. Indeed, housing activity has only been a
smaller share of the Australian economy during the recessions of the early 1960s and
mid-1970s, and after the introduction of the GST in 2000.
A number of factors have contributed to this decline.

House prices increased significantly over the past decade, while higher interest rates
and increases in developer taxes and charges (which are generally passed onto
residential home buyers) have also influenced construction costs and housing
affordability more generally. In turn, the average number of persons per home in
Australia has increased, reversing a long term trend of decline.

Moreover, managed land release by State and Territory governments across Australia
has constrained the supply side, causing the price of the land component of residential
developments to rise as a share of the value of an average home.
However, as Chart 5.2 above shows, housing investment is expected to rise over the next
few years, driven by low interest rates and good population growth, particularly in the
major urban centres.
ACT housing market
Residential housing demand in the ACT is subject to a unique set of factors, including the
rate of employment growth in the Commonwealth public service, that have driven the
housing market in a different direction to many other jurisdictions in Australia. Recent years
saw a surge in residential housing construction in the ACT, while at the same time national
activity was weak.
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Colocation feasibility study – racing codes and exhibition facilities
However, forward indicators for the ACT suggest a weaker outlook in the future. Housing
finance and building approvals have been falling for the past year, while vacancy rates for
rental properties have risen.
This has already begun to show up in house prices, with prices trending down slightly over
the past year. Positives associated with low interest rates and good population growth have
been offset by Federal government cut backs and the expectation for more public sector
job cuts in the near future.
Low mortgage interest rates have not encouraged the same increased level of new housing
construction in the ACT as has been seen in other areas. However, that is due in part to the
relative outperformance of residential housing construction in the ACT in recent years.
Future prospects for the housing market in the ACT will be determined in large part by the
level of future reductions to the Australian Public Service. So far, efforts by successive
Federal Governments to rein in public sector spending (both in terms of numbers and wage
growth) have been relatively modest. Federal public sector jobs fell from 250,000 to
248,500 in 2012-13, though the public sector wage bill grew by 4%. However, it is expected
that there will be further reductions in staff numbers over the forward estimates.
Chart 5.3: ACT share of national population and output
Share of real GDP
7%
Forecast
6%
5%
4%
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Source: Deloitte Access Economics, Business Outlook, March 2014.
Moreover, there are flow-on impacts into other sectors in the ACT. Business investment
spending in the ACT is already weak, while many Canberra private sector companies ‘sell to’
the public sector.
Chart 5.3 shows the ACT maintaining its share of the national population, but losing some
share of national output over the next few years as the already announced public sector job
reductions impact the local economy.
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Colocation feasibility study – racing codes and exhibition facilities
5.2 Demographic trends
In 2013, the total population in the ACT was estimated at around 384,000 persons. By 2044,
the ACT population is projected to grow to over 572,500 persons at an average annual rate
of 1.3% per year.
Chart 5.4: Total population in the ACT, 2044
ACT population
600,000
Forecast
550,000
500,000
450,000
400,000
350,000
Total population in the ACT
300,000
1993 1997 2001 2005 2009 2013 2017
Source: ABS 3101.0, Deloitte Access Economics forecast
2021
2025
2029
2033
2037
2041
Demographic ageing will play a key part in the transition of the ACT economy over the
coming decades. An older population demands a different mix of goods and services and
also different types of housing. Moreover, lower birth rates will also have an impact on
housing demand, with smaller families requiring smaller houses with fewer rooms.
The overall rate of population growth will also affect housing demand, with Chart 5.5
showing a projected decline in the overall rate of population growth over the next few
decades in the ACT.
Over time, as individuals live longer, older age cohorts are expected to account for a larger
share of the population in the ACT. Indeed, population ageing is a challenge for jurisdictions
across Australia and in many developed nations around the world. Meanwhile lower birth
rates will reduce the share of the population accounted for by younger age cohorts.
Combined, these factors generate the relatively rapid ageing trends shown in Chart 5.6
below.
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Colocation feasibility study – racing codes and exhibition facilities
Chart 5.5: Long run annual population growth in the ACT
Annual population growth rates in the ACT
3.5%
Forecast
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
ACT population growth
0.0%
1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038 2042
Source: ABS 3101.0, Deloitte Access Economics forecast
By 2043, persons aged 65 years and over will account for 17.7% of the population in the
ACT. That is up from 11.3% in 2013, and 6.7% two decades ago in 1993. Meanwhile,
persons aged 19 years and under will account for 21.7% of the population in 2043, down
from 24.3% in 2013, and 31.4% two decades ago in 1993.
Chart 5.6: Changing age demographics in the ACT to 2043
ACT population shares by age
35%
30%
25%
20%
15%
10%
5%
0%
1993
2003
2013
0-19
20-34
Source: ABS 3101.0, Deloitte Access Economics
2023
35-49
2033
50-64
2043
65+
These changing demographics will have wide ranging economic implications for the ACT,
including changes in the demand for housing.
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Colocation feasibility study – racing codes and exhibition facilities
6 Financial assessment
In order for the ACT Government to make the colocation options a reality, it needs to
explore options to redevelop the vacated land. Without the proceeds from redevelopment,
the ACT Government will be unable to finance the colocation options. This chapter provides
an assessment of the financial viability of the colocation options and development
scenarios from the perspective of the ACT Government.
6.1 Methodology
A strategic financial appraisal model was developed by Deloitte for the purpose of assessing
the financial viability of the colocation options. To perform such an assessment, a financial
model was developed that assessed the upfront and ongoing financial impact on the ACT
Government. The model was used to calculate the Benefit-Cost Ratio (BCR) for each of the
options to determine whether the ACT Government would receive a net financial benefit
from the colocation option.
6.1.1
Options
The financial appraisal has been developed to incorporate all of the colocation options and
corresponding development scenarios. Each colocation option is applicable only under
certain development scenarios. Table 6.1 outlines the colocation options considered within
the appraisal and the corresponding development scenario under which it could apply.
Table 6.1: Colocation Options and Corresponding Development Scenarios
Colocation Option
Corresponding Development Scenario
Option 1
Scenario 3
Option 1a
Scenario 1
Option 2
Scenario 3
Option 3
Scenario 1
Option 4
Scenario 2
Option 5
Scenario 2
Option 6
Scenario 1
Option 7
Scenario 1
Option 8
Scenario 3
Option 8a
Scenario 1
Overall, the ACT Government appraisal considers 40 permutations of colocation options,
development scenarios and low and high cost/revenue scenarios.
6.1.2
Key Parameters
The valuation of economic costs and benefits was based on the key economic parameters
shown in Table 6.2:
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Colocation feasibility study – racing codes and exhibition facilities
Table 6.2: Key Parameters
Parameter
Assumption for appraisal
Discount rate
9.7% nominal (7% real)3
Evaluation period
30 years
Valuation
In nominal terms
Profit margin and taxes
Included with the exception of
GST
Price year
Current prices
Base case
No base case assumed
Fiscal year
Financial year
Coverage
ACT Government costs and
benefits only
The financial appraisal assumes that infrastructure costs and property values increase
above inflation over the evaluation period. Land and house prices are assumed to move in
line with historical movements in property values in the ACT, movements in construction
costs and civil costs reflect movements in costs recorded by Rawlinsons Australian
Construction Handbook, and the value of retail space is assumed to move in line with the
cost of constructing retail space. Assumed indexation rates, which have been applied over
the evaluation period, are shown in Table 6.3:
Table 6.3: Assumed Nominal Indexation Rates
Variable
Annual Rate of Indexation
General inflation rate
2.5% p.a.
Land values
5.5% p.a.
House prices
5.5% p.a.
Commercial property prices
4.0% p.a.
Civil costs
4.0% p.a.
Construction costs
4.0% p.a.
6.1.3
Exclusions
The financial appraisals are strategic in nature and are subject to the following limitations
and exclusions:

The financial appraisals take no account of tax implications (e.g. income tax,
depreciation), apart from the stamp duty, land tax and rates revenues projected to be
accrued by the ACT Government.

The financial model will only assess the financial impacts on the ACT Government from
a whole of government perspective i.e. flows between different agencies/departments
are not considered.
3
The assumed real discount rate of 7% p.a. was converted to a nominal rate using the Fisher equation and an
assumed rate of inflation of 2.5% p.a. i.e. (1 + 𝑑) = (1 + 7%)(1 + 2.5%) = (1 + 9.7%)
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Colocation feasibility study – racing codes and exhibition facilities
6.2 Costs and Benefits
Table 6.4 outlines the key costs and benefits incorporated in the appraisal from the
perspective of the ACT Government.
Table 6.4: Key Costs and Benefits Considered
Category
Description
Civil costs
Cost of parks, roads and other public
infrastructure as part of urban renewal
Consultants costs
Cost associated with civil works
EPIC/Thoroughbred Park colocation costs
Cost of colocation (assumed that the full
costs are borne by the ACT Government)
Land sales related costs
Costs associated with the sale of land
Land sale revenues
Revenue to the ACT Government from the
sale of land
Property tax revenues
Revenues to the ACT Government from
stamp duty, land tax, rates, holding costs
The financial assessment captures the direct cash flows accruing to the ACT Government
due to the development.
At this stage, the analysis does not include an estimate of the broader costs to the ACT
Government that may be funded by the increased taxes as the costs of social infrastructure
may have been incurred in any case if the residents were living elsewhere in the ACT and
due to uncertainty about who would bear these additional costs.
The analysis also does not include any direct financial payments to the codes or changes to
the current funding arrangements4.
To avoid double counting, the costs of financing are reflected in the discount rate used
within the financial appraisal.
6.3 Results
The financial model calculated the BCR of each of the colocation options. The results reflect
the upfront and recurrent revenues and costs associated with different redevelopment
scenarios and the costs associated with different relocation options. The projected BCRs are
shown in Figure 6.1 and Table 6.5.
Based on our analysis, the colocation options that may not provide a net financial benefit
for the ACT Government are Options 2 and 3 (colocation of all of the racing codes at
Thoroughbred Park with and without EPIC).
4
The ACT Government currently provides funding to the ACT racing industry. In 2012-13, the ACT Government
provided $7.7 million, which was divided between the clubs according to a set formula of 75% for CRC and
12.5% each for CGRC and CHRC (EDD 2013).
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Colocation feasibility study – racing codes and exhibition facilities

Option 3 (colocation of all of the racing codes and EPIC at Thoroughbred Park) is
projected to have a net cost for the ACT Government regardless of whether low or high
cost and revenue rates are assumed.

Option 2 (colocation of all of the racing codes at Thoroughbred Park) may also not be
financially viable depending on the cost/revenue rates assumed.
Chart 6.1: Projected BCR Ranges (ACT Government)
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Colocation feasibility study – racing codes and exhibition facilities
Table 6.5: Projected BCRs
Development Scenario
Scenario 1: Low
Scenario 2: Low
Scenario 3: Low
Scenario 1: High
Scenario 2: High
Scenario 3: High
Relocation Option
Option 1a
Option 3
Option 6
Option 7
Option 8a
Option 4
Option 5
Option 1
Option 2
Option 8
Option 1a
Option 3
Option 6
Option 7
Option 8a
Option 4
Option 5
Option 1
Option 2
Option 8
Low
High
1.1
0.7
1.3
1.4
1.3
1.3
1.3
1.2
0.9
1.8
1.0
0.7
1.2
1.3
1.3
1.2
1.2
1.2
0.8
1.8
1.4
1.0
1.6
1.7
1.6
1.6
1.5
1.5
1.2
2.1
1.3
0.9
1.5
1.6
1.6
1.5
1.5
1.5
1.1
2.0
Estimates are in current prices with all cash flows indexed over time. Cash flows are discounted at a nominal
discount rate of 9% p.a. over a 30 year evaluation period.
A BCR that is greater than 1 is favourable and means the benefits are greater than the costs, a BCR that is less
than one means the costs are greater than the benefits.
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Colocation feasibility study – racing codes and exhibition facilities
7
Options assessment
The following chapter provides an assessment of each of the options against the objectives
that were set out in Chapter 2 and provides an indication of the options that the ACT
Government may wish to investigate further as part of a detailed feasibility study. This
chapter also provides analysis on the risk versus reward of each of the options.
7.1 Strategic alignment
This section provides a rating of each option against the objectives that have been
identified for this project drawing on the analysis in the previous chapters.
Figure 7.1 provides a summary of how each of the options rates against the objectives using
a five-point scale. The assessment provides an indication of the relative merits of each
option and is based on the analysis undertaken in the preceding chapters.
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Colocation feasibility study – racing codes and exhibition facilities
Figure 7.1: Alignment of colocation options to objectives
Source: Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Based on our analysis, the colocation options are seen to divide into three broad categories
in terms of alignment with the objectives of the project (high, medium and low alignment).
Table 7.1: Options categorised by alignment with objectives
Low alignment
Medium alignment
High alignment
Option 1
Option 6
Option 4
Option 1a
Option 7
Option 5
Option 2
Option 8
Option 3
Option 8a
Source: Deloitte Access Economics analysis.
7.1.1
Options with low strategic alignment
The options with the lowest alignment to the objectives for the colocation are the options
that involve moving the other racing codes and EPIC to Thoroughbred Park.
Our analysis shows that Options 2 and 3 are not financially viable. The costs of relocation
and consolidation on the Thoroughbred Park site would outweigh the revenue from
redeveloping part or all part of the EPIC site. Options 1 and 1a provide a net financial
benefit to the ACT Government but provide a lower benefit than the other options.
Options 1 and 2 involve the redevelopment of part of the EPIC site, which provides less of
an opportunity for the ACT Government for urban renewal. Options 1a and 3 provide
additional opportunities for redevelopment as they include the full EPIC site, however,
under these options a significant investment is required to colocate the codes on
Thoroughbred Park and thus these options make it unlikely that further development at
Thoroughbred Park would be undertaken in the short to medium term.
These options would provide some synergies and operational efficiencies for the racing
industry and EPIC and some additional revenue opportunities, however the complexity of
colocation on an existing site means the efficiencies and revenue opportunities are lower
than at a greenfield site. Colocation at Thoroughbred Park would also not address any of
the current constraints in terms of noise restrictions or increasing autonomy for CHRC.
Options 1 and 1a are achievable on the basis of the current available land at Thoroughbred
Park although there are challenges in terms of negotiating governance arrangements for
the new site. Including CGRC on site as well would increase the difficultly of fitting all three
codes onto the same site and if this option was pursued may require acquisition of
additional land. Also including EPIC at Thoroughbred Park would require a complete
redevelopment of the site as well as potentially requiring additional land, which makes this
option unlikely to be able to be achieved.
7.1.2
Options with medium strategic alignment
The options with a medium alignment to the objectives for the colocation relative to the
other options are the options that involve moving the EPIC, CHRC and CGRC to a greenfield
site or to Symonston. These options do not involved relocating CRC.
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Colocation feasibility study – racing codes and exhibition facilities
All of these options are financially viable. The revenue to the ACT Government would be
lower because they do not involve the development of Thoroughbred Park but this would
be partly offset by lower costs for relocation.
These options all provide an opportunity for the ACT Government to undertake urban
renewal and increase urban infill through the development of all or part of the EPIC site,
but to a lesser extent than the options that include Thoroughbred Park. By locating EPIC
and CHRC at a greenfield site these options do not prevent the future development of
Thoroughbred Park and could be undertaken as the first phase of the urban renewal at EPIC
and Thoroughbred Park.
These options would provide synergies and operational efficiencies for the racing industry
and EPIC. Colocation at a greenfield site or fully redeveloped Symonston site would provide
an opportunity to include infrastructure to increase these benefits. Similarly, additional
revenue opportunities would be possible and could be further enhanced through the
design of a new site. These options may also address the current noise restrictions and
could increase autonomy for CHRC.
The greenfield options (6 and 7) are readily achievable. Location of CHRC at the CGRC
Symonston site (options 8 and 8a) would require redevelopment of the Symonston site and
investigation of adjacent land, which makes these options more difficult but still achievable.
7.1.3
Options with high strategic alignment
The options with the highest alignment to the objectives for the colocation are the options
that involve moving all of the racing codes and EPIC to a greenfield site or sites.
Options 4 and 5 provide the largest potential financial benefit to the ACT Government over
time. The relocation costs of these options are higher because they involve relocating all of
the racing codes and EPIC, but they also produce the largest financial benefit for the ACT
Government through the redevelopment of the full EPIC site and Thoroughbred Park. They
also provide the greatest opportunity to the ACT Government for urban renewal.
These options would also provide operational efficiencies and additional revenue
opportunities, which could be included as part of the design of the new facilities. These
options would also address the constraints of the current sites.
These options are both achievable and a greenfield site would mean the site could be
designed to accommodate the needs of each of the racing codes and EPIC.
7.2 Risk versus strategic alignment
It is also important to consider how the risks associated with each option compare to their
strategic alignment. This is shown in Figure 7.2 drawing on the results of the risk
assessment undertaken in Chapter 6 and the strategic assessment in the previous section.
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Colocation feasibility study – racing codes and exhibition facilities
Figure 7.2: Risk versus strategic alignment for colocation options
High strategic alignment
Option 4
Option 5
Option 7
Option 8a
Option 6
Option 8
High risk
Low risk
Option 1
Option 1a
Option 3
Proposed colocation site
Thoroughbred Park
Option 2
Greenfield site
Symonston
Low strategic aligment
Source: Deloitte Access Economics.
The diagram shows that while Options 4 and 5 (relocating all of the clubs and EPIC to a
greenfield site) have the highest strategic alignment, they also have a relatively higher risk
profile than the options with a medium strategic alignment.
Options 8 and 8a (relocating CHRC to Symonston, with EPIC remaining on site or moving to
a greenfield site) have a lower strategic alignment but are also lower risk, compared to
Options 4 and 5. Noting that these options would require CGRC to cease operations while
new facilities were constructed and the CGRC are uncertain that this option would be able
to be easily implemented due to concerns around topography of the current site.
Options 6 and 7 (EPIC and CHRC relocated to a greenfield site, with and without CGRC),
have an even lower risk and only a slightly reduced strategic alignment compared with
Options 4 and 5.
The Thoroughbred Park options have a lower strategic alignment, with generally higher risk.
Given that they also generate a lower (or negative) financial return, we consider that these
options are not worth pursuing further.
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Colocation feasibility study – racing codes and exhibition facilities
8
Conclusion
Our analysis suggests that there are a number of colocation options that are feasible and
align with the objectives for this project. Further, our analysis suggests that these options
are also financially viable for the ACT Government. The colocation options that we have
assessed as worthy of further consideration are:

Option 4 or 5 – colocate the racing codes and EPIC at a greenfield site, with an option
for EPIC to be at a separate greenfield site;

Option 6 or 7 – colocate the CHRC and EPIC at a greenfield site, with or without CGRC;

Option 8 or 8a – colocate CHRC and CGRC at Symonston with EPIC either consolidated
on its existing site or at a greenfield site. This option is more complicated than
colocation at a greenfield site but could be pursued if a suitable greenfield site cannot
be identified; and

Staged approach – implement Option 6 or 7 in the first instance, with a long-term plan
to achieve colocation of all the racing codes and EPIC (i.e. Option 4 or 5).
Options 4 and 5 have the highest alignment with the objectives and the largest estimated
financial return, but they are also higher risk than the other options. Options 6 and 7 also
provide a feasible colocation solution and are lower risk, although they are also expected to
generate a lower financial benefit and are not as strongly aligned with all of the objectives
as Options 4 and 5.
Furthermore, as Options 4 and 5 are for the relocation of all of the racing codes and EPIC, it
may be possible to stage these options over time. This could involve pursuing Options 6 and
7 in the first instance and then move the other parties to a new location over time. This
would reduce upfront costs and is not ruled out under any of these options.
8.1 Next steps
The ACT Government may now wish to undertake further investigation of some of these
options with the racing industry. There are two elements to the further work that are
required to progress these options:

engagement with the racing industry; and

detailed analysis of the colocation options and urban renewal possibilities.
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References
ACT Government 2008, Territory Plan 2008, Canberra, ACT.
ACT Government 2012, Investigation into the ACT Racing Industry - ACT Government
Response to the Independent Competition and Regulatory Commission Report 2 of 2011,
viewed on 26 March 2014, http://www.economicdevelopment.act.gov.au/about_us/files/
gaming_and_racing/investigation_into_the_act_racing_industry_-_Report_2.
ACT Planning and Land Authority 2010, Gungahlin Town Centre – planning report, ACT
Planning and Land Authority, Canberra, ACT.
Economic Development Directorate (EDD) 2013, Annual Report 2012-13, EDD, Canberra,
ACT.
Economic Development Directorate (EDD) 2013, Indicative Land Release Programs 2013–14
to 2016–17, EDD, Canberra, ACT.
Exhibition Park Corporation (EPC) 2013, Annual Report 2012-13, EPC, Canberra, ACT.
Independent Competition and Regulatory Commission (ICRC) 2011, Investigation into the
ACT racing industry - Final report, ICRC, Canberra, ACT.
National Capital Authority 2013, Consolidated National Capital Plan, National Capital
Authority, Canberra, ACT.
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Appendix A: Consultations
Record of stakeholder consultations
Deloitte Access Economics has engaged and consulted extensively with all of the
organisations (CRC, CGRC, CHRC, and EPIC) throughout the project. The detailed
requirements and views of each organisation in regards to colocation and the potential to
develop the racing industry in the ACT have been included in the draft report.
Introductory meetings
Deloitte Access Economics met with each of the codes individually on 17 December 2013.
At these meetings we discussed the purpose of the project and the codes gave us there
initial views on the colocation options. The attendees at these meetings were:

Ashley Dwyer, Chairman, CGRC

Peter Stubbs, Chief Executive and Andrew Clark, Chief Financial Officer, CRC

Ray Redman, President and Greg Nugent, General Manager, CHRC
We also met with Liz Clarke, CEO of Exhibition Park in Canberra on 18 December.
Site visits
On 29 January, Deloitte Access Economics undertook a site visit of the EPIC and
Thoroughbred Park sites to gain an understanding of the sites. We were shown around EPIC
by Liz Clarke, who explained what would be (and would not) be needed at a new site. We
were also given a tour of the Thoroughbred Park by Chris Ward (Chairman) along with Paul
Meiklejohn (Vice Chairman), Peter Stubbs and Andrew Clark.
Deloitte Access Economics also visited the CGRC site on 18 March, to meet with
representatives from the club (Ashley Dwyer and Debbie Collier, Secretary), discuss the
club’s requirements for a new facility and the potential for colocation on the site, and
obtain industry estimates for relocation costs to triangulate with the initial cost estimates
that had been prepared.
Requirements for colocation
A detailed data request was sent to all organisations that sought information on the
requirements of each club if colocation were to occur. These requirements related to
infrastructure (e.g. race track, training facilities, grandstands, office buildings, carpark,
function facilities, etc.); site requirements (such as dams and noise restrictions); and
additional logistical requirements (for example, cross-code facilities that can’t be located in
close proximity, and typical racing/training schedules). The organisations were able to list
their requirements in terms of minimum requirements (i.e. requirements that would allow
the organisation to continue the current scope of their operations) and maximum
requirements (i.e. requirements that would allow each organisation to achieve their
aspirational or developmental aims).
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The responses from the organisations were further discussed at a roundtable hosted by
Deloitte Access Economics on 12 February which all organisations and ACT Government
representatives attended. This allowed the organisations to discuss their requirements
which each other, and analyse the scope to address potential logistical issues. The
organisations also discussed their concerns and issues with the project, and how these may
be resolved.
Following the roundtable, Deloitte Access Economics prepared:

Two-page summaries for each organisation that outlined their key issues and concerns,
and articulated each organisation’s vision for potential colocation. Each organisation
reviewed their summary and provided comments to ensure it accurately reflected their
views. These summaries have been included as appendices in the draft report.

A summary spreadsheet of each club’s site requirements (both minimum and maximum
requirements) that was approved by each organisation. This spreadsheet has been
included as an appendix in the draft report.
Costs of colocation
Estimated colocation costs (both minimum and maximum requirements) for all of the ten
options were provided to the organisations. These costs were broken down into the
following categories: race track, buildings, training facilities, other, carpark, grandstand,
site works, project management, design and planning, and contingency.
Deloitte Access Economics met with Peter Stubbs and Andrew Clark of the CRC on 10 April,
to discuss the estimated colocation costs for the CRC under each applicable scenario.
Deloitte Access Economics also met separately with the Ashley Dwyer of the CGRC on
15 April to discuss the CGRC’s estimated colocation costs. The representatives from the CRC
and CGRC validated that the estimated costs for their organisation across the options were
a reasonable reflection of the relocation costs that would be incurred. All parties noted that
these estimate were still high-level and that detailed design work would be required as part
of subsequent stages to determine a more accurate cost.
Presentation of results
Deloitte Access Economics gave a presentation of the results to the racing codes on 22 July
and provided the codes with a confidential draft copy of the report. The codes were invited
to provide comments on the report. The representatives from the codes at this meeting
were:

Ashley Dwyer and Debbie Collier, CGRC

Chris Ward, Paul Meiklejohn, Peter Stubbs and Andrew Clark, CRC

Ray Redman and Greg Nugent, CHRC
Summary of feedback on the draft report
Canberra Racing Club
After careful consideration of the draft report, including the opportunities and risk that are
identified, the views of Members and the future direction of racing industry, the Club has
firmly resolved that it is not in the best interests of the Club, nor the industry, to proceed
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further with any future relocation. The Club therefore requests that any option involving
the relocation of Thoroughbred Park not be considered further. The Club values
Thoroughbred Park extremely highly and intends to continue to develop it to become a
world class racing and training venue.
The Club was anticipating that the study would identify the value and economic
contribution the Canberra Racing Club would be making to any relocation project given that
in the event of a relocation option being considered feasible it would be the only one of the
three codes that would be making a capital contribution to the project by forgoing its land
for urban renewal.
The report is entirely silent as to the quantum of value that would be provided to the Club,
merely noting that the Club would have to be “incentivised” to relocate. The study
identifies that the ACT Government will need to consider the costs of access and the
opportunity cost of allocating greenfield land for colocation. Similarly the Canberra Racing
Club must consider the opportunity cost of forgoing its land. In the absence of information
with regard to the value of its land for urban renewal and without allocating funds for an
independent valuation it is impossible for the Canberra Racing Club to make an informed
decision.
Related ACT Government urban renewal priorities included in the report including City to
the Lake, Northbourne Avenue Redevelopment, Gunghalin Town Centre and Capital Metro
are considered in the context of urban redevelopment of Thoroughbred Park and EPIC.
There is no balancing case for retaining Thoroughbred Park to enhance the City by
complementing Capital Metro, retaining a major entertainment precinct close to the CBD,
access to Northbourne Avenue redevelopments and having a racing facility and green space
adjacent to Gunghalin. Some of the most successful horse racing facilities in the world and
Australia are surrounded by urban development, including but not limited to Hong Kong,
Tokyo, Singapore, Flemington in Victoria and Randwick in Sydney. In these locations the
racing facilities complement the city and its residents.
The only reference to the benefits or otherwise of retaining Thoroughbred Park as a horse
racing facility is as a possible risk mitigation option for the ACT Government by additional
negotiation to expand Thoroughbred Park.
The Club considers that the relocation of Harness racing to Thoroughbred Park is not
adequately considered. Whilst that is not the preferred option for the Club, in the opinion
of the Club it is certainly a feasible option worthy of future discussions. For operational
reasons (including insurance and risk issues), any further consideration of that option could
only be considered on the basis that the Club would continue to control and manage the
overall facility. Nevertheless, the Club is sure that any resulting operational issues could be
appropriately and harmoniously managed.
Deloitte Response
A formal land valuation of the Thoroughbred Park site was out of scope for this project.
However, we did estimate the expected proceeds from selling the land at Thoroughbred
Park, which formed one of the inputs for the cost-benefit analysis. The ACT Government has
chosen not release this analysis due to its commercial sensitivity.
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While, the colocation of the Harness Racing Club at Thoroughbred Park may be a viable
option from the viewpoint of the Canberra Racing Club, the Harness Racing Club has
expressed its concern with continuing to be a tenant and the uncertainty created by the lack
of autonomy.
Canberra Harness Racing Club
The Canberra Harness Racing Club is comfortable with the preferred options. CHRC
reiterated that their core desire is to be able to operate in an autonomous manner and do
not wish to continue being a tenant. CHRC see this as an opportunity for their industry to
consolidate and grow and to be able to control their future. They also see it as an
opportunity for innovation in the industry especially if the chosen site is a greenfield site.
CHRC would welcome the opportunity to be part of the first stage of development, if this
project was to proceed.
Canberra Greyhound Racing Club
In relation to the key options identified in the report, CGRC offers the following comment.
CGRC is content to stay at Symonston. There is mixed opinion, based on work to date, as to
the likely cost and benefits of a move to a greenfields site. CGRC are supportive if the
situation was beneficial.
There is no value in co-location of the Harness function to Symonston. While the
relationship between racing codes is good, this is not a practical option for reasons such as
the topography of the Symonston land that would require massive, and potentially
exorbitant, earthworks to fit both functions onto the Symonston land. There would also be
a need for total demolition and rebuild of current greyhound infrastructure to
accommodate the infrastructure and layout of both harness and greyhounds racing and
training.
CGRC support Greenfields options whereby:

there is at least the same greyhound specific infrastructure ( e.g. track, kennels, training
facilities, etc.);

generic race code infrastructure (e.g. car park, office, bar, restaurant, fencing, etc.) is
provided at the new site, before the greyhound racing function moved to a greenfields
site; and

There is an agreed staged strategy to acquire and redevelop land to fund a Greenfields
site if the cost-benefit analysis supported this.
While the exact location of any potential Greenfields site may need to stay undisclosed at
this stage, there needs to be an assurance in the next body of work that minimum
requirements for the three codes plus EPIC are clearly understood and agreed to before
progressing too far. There is also a need for an agreed governance and management
structure of common facilities, with appropriate autonomy of codes for administering and
governing the respective codes to everyone’s benefit, and no one’s detriment.
There is qualified support to move greyhound racing to Thoroughbred Park. CGRC advise
that any move of the greyhound function from Symonston to Thoroughbred Park does not
appear to offer a better solution than to remain at Symonston. Considerations include:
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
The Thoroughbred Park redevelopments required to accommodate the greyhound
functions do not appear to provide the economies of scale desired and required.

The current working relationship is very good between codes, however, the Greyhound
Board would not support a tenancy arrangement at Thoroughbred Park.
Deloitte Response
We agree that there are barriers to colocating the Harness Racing Club at Symonston,
including the disruption to CGRC operations and the costs of preparing the land. However, if
a suitable greenfield site could not be identified, the Symonston site may be worth
investigating further. We agree that the other issues raised by CGRC would need to
considered as part of a potential second stage of work.
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Appendix B: Stakeholder views
Following our consultations, we prepared a summary of the issues and concerns raised by
the racing codes and EPIC during our consultations and the vision that each stakeholder had
for the colocation. We then asked each of the stakeholders to confirm our understanding of
their views. The summaries are provided below.
Canberra Racing Club
Summary of issues and concerns
The CRC owns its facility, and most infrastructure at the club’s site is sufficient to meet their
needs. As such, the CRC will require incentives and an appropriately-structured financial
compensation package to either move away from Thoroughbred Park, or to allow the other
racing codes to colocate at Thoroughbred Park.
Unlike the other racing codes, the CRC is the owner of their facility – the CHRC rents its
facilities at EPIC, and the CGRC rents its facilities at Symonston. Colocating the other race
codes at Thoroughbred Park may require CRC to act as a lessor of the site, at least in the
short term, which would be a significant change from the CRC’s current organisational
model.
The CRC’s current facilities at Thoroughbred are adequate for current operations. If the CRC
were to move to a new facility or allow the other race codes to colocate at Thoroughbred
Park, the CRC would require new infrastructure. Relocation to Thoroughbred Park by CHRC
Club would require significant infrastructure development including racing and training
tracks, stabling, race day stalls to accommodate both thoroughbred and harness horses,
access to tracks, judging/photo finish/ race caller facility and remodelling of administration.
The synthetic (Acton Track) would require significant and costly refurbishment of the
surface and drainage works to bring it up to suitable racing standard.
A complicating factor for potential colocation is that much of the key infrastructure for the
CRC is unable to be shared with other racing codes in the ACT, and needs to be replicated
for each code.

Firstly, horse races are run in the opposite direction to harness races, which means
separate race track infrastructure is required.

Secondly, the race day stalls for thoroughbreds are shorter compared to harness stalls
due to harness and sulky requirements, which means that race day stalls can’t be
shared across the codes. Segregated training facilities would follow that full time
stabling should also be segregated.

Thirdly, there needs to be physical segregation of the horse and greyhound racing and
training facilities to ensure that the two types of animals are not frightened. If the
animals are frightened or disturbed then there is the risk that they may injure
themselves or racing personnel. Experience at other colocated racing facilities has
shown that scheduling access to racing or training facilities does not sufficiently
segregate the two types of animals.
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As with the other racing codes and EPIC, a key concern for the CRC is the lack of certainty of
ACT Government funding beyond 2016-17. The CRC would like to diversify the club’s
revenue streams to ensure their long-term viability. To diversify the club’s revenue streams,
the CRC has previously experimented with operating a licensed premises at Thoroughbred
Park. This was not profitable, and as such the CRC would be hesitant to trial a similar facility
unless there is substantial residential development with easy access nearby.
The ownership and management structure of a colocated facility is an issue that will need
to be resolved for all parties. Potentially, this may involve a CEO overseeing the facility, with
managers for each of the racing codes and EPIC. Administration, maintenance and
operating costs for a colocated facility will also need to be shared appropriately between all
parties.
Vision for colocation
The CRC owns their facility, and most infrastructure at Thoroughbred Park is sufficient to
meet the club’s needs. As such, the CRC will require incentives and an appropriatelystructure financial compensation package to be incentivised to either move away from
Thoroughbred Park, or to allow the other racing codes to colocate at Thoroughbred Park.
The new facility could draw on the economies of scale generated from having the racing
codes together, and could include features such as a licensed premises (depending on
location and/or proximity to light rail), improved veterinary facilities (possibly in
partnership with a university), and onsite accommodation for staff.
The onsite accommodation for staff would assist in attracting staff to Canberra, who are
often dis-incentivised by the city’s high cost of living. On-site accommodation would
increase labour supply, reduce staff turnover, and assist younger employees to get a start in
the industry through lower housing costs.
A new facility would also have a re-designed synthetic and ambulance track, more race days
stalls, possibly incorporated into an air-conditioning building and, more office space. An
improved and expanded range of facilities may make it possible for discussions between
Governments and the Governing Racing Bodies in each state over the future of the
Queanbeyan Racing Club.
If the CRC were colocated with the other racing codes, the resultant economies of scale
may make a licensed premises profitable. In addition, closer proximity to light rail or other
non-racing retail establishments may draw additional clientele to the CRC’s site.
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Canberra Harness Racing Club
Summary of issues and concerns
The CHRC currently obtains approximately 90 per cent of its revenue from ACT Government
funding. However, as with the other racing codes and EPIC, this funding is only guaranteed
until 2016-17 and so the CHRC would like to diversify its revenue streams to ensure the
club’s long-term viability.
The ability of CHRC to diversify its revenue streams is limited by the constraints of its
current site at EPIC and because they are leasing the site. Due to size constraints and the
need to fit in with EPIC’s schedule of events, the CHRC are unable to develop new
infrastructure and facilities, and schedule races at optimal times that would maximise
turnover.
Given that ownership arrangements, size and scheduling conflicts are key concerns at its
current site, the CHRC have a strong preference for colocating at a greenfield site with
more room and flexibility for scheduling and would allow them to have more control over
the site. The CHRC are not amenable to colocating at Thoroughbred Park, as they will
continue to be tenants at this site.
Much of the key infrastructure for the CHRC is unable to be shared with other racing codes
in the ACT and needs to be replicated for each code.

Firstly, harness races are run in the opposite direction to other horse races. This means
that additional race track infrastructure such as cameras and a finish post is required,
but other broadcast facilities can be shared.

Secondly, while the stables for harness racing horses can be shared with other horses,
the harness racing stables need additional room in front of the stables to allow for carts
to be attached to the horses.

Thirdly, there needs to be physical segregation of the horse and greyhound racing and
training facilities to ensure that the two types of animals are not frightened. If the
animals are frightened or disturbed then there is the risk that they may injure
themselves or racing personnel. Experience at other colocated racing facilities has
shown that scheduling access to racing or training facilities does not sufficiently
segregate the two types of animals.
If the CHRC was to colocate with other codes at a greenfield site and grow the club’s
revenue base, the club would not seek to grow its market presence by facilitating races
with higher value prize pools. The CHRC does not have the resources to compete with the
larger race tracks in the ACT/NSW harness racing market, and as such has developed a
niche in the market as the provider of races with lower value prize pools. Rather, the CHRC
would increase the number of races they operate.
The ownership and management structure of a colocated facility is an issue that will need
to be resolved for all parties. Potentially, this may involve a CEO overseeing the facility, with
managers for each of the racing codes and EPIC. Maintenance costs for a colocated facility
will also need to be shared appropriately between all parties.
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Vision for colocation
The CHRC have a strong preference for colocating at a greenfield site with more space and
scheduling flexibility. This would allow the club to construct new facilities which would
differentiate it in the harness racing market and allow it to diversify its revenue streams.
The key development that CHRC would pursue is the construction of a 1,600 metre straight
track, which would differentiate the CHRC’s track from all other harness racing providers in
the market. At present, all harness races in the market are run on a conventional round
track, which significantly disadvantages the horses that start on the outside of the track.
The straight track would be integrated into the conventional race track, similar to the
model used at Flemington in Victoria.
The CHRC does not currently have much bargaining power with their television
broadcaster, Sky TV. A new greenfield site with improved facilities and race scheduling may
also assist the CHRC to improve on their lack of bargaining power. The CHRC is currently
seeking advice from Sky TV on their views of a straight track.
The CHRC would be able to develop new infrastructure and race offerings, which could be
leveraged in negotiations to demonstrate points of difference in the harness racing market,
such as a straight race track. A new site with new infrastructure and race offerings would
assist the CHRC in their efforts to attract sponsors and marketing revenue.
In addition, at a greenfield site the CHRC would seek to construct state-of-the-art training
facilities, such as a swimming pool, walking machines, a sand roll, and a sand jogging track.
The CHRC could enter into a partnership with a university to operate a veterinary hospital,
and establish a multi-code centre of excellence. There is also the opportunity to explore the
possibility of providing training for industry participants at a greenfield site.
The CHRC has raised the possibility of constructing on-site accommodation for staff at a
greenfield site, which could be shared among the codes. It can often be difficult to attract
staff to Canberra, given the city’s high cost of living. On-site accommodation would increase
labour supply, reduce staff turnover, and assist younger employees to get a start in the
industry through lower housing costs. The accommodation may also allow satellite stables
from interstate trainers who use the facility to be established.
The CHRC would also consider constructing a synthetic training and racing track, to reduce
the significant water costs associated with maintaining grass tracks. This track could be
used by both the CHRC and the CRC to train and race the clubs’ horses.
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Canberra Greyhound Racing Club
Summary of issues and concerns
The CGRC’s primary concern relates to the potential colocation of horses and greyhounds at
a shared facility. Much of the key infrastructure for the CGRC is unable to be shared with
the other racing codes, and needs to be replicated.
Firstly, there needs to be physical segregation of the horse and greyhound racing and
training facilities to ensure that the two types of animals do not come into contact with
each other. If the animals come into contact with each other, they may become frightened
or disturbed which may result in the animal injuring themselves or people. Experience at
other colocated racing facilities has shown that scheduling access to shared racing or
training facilities does not sufficiently remove the risk of the two types of animals coming
into contact with each other.
Secondly, race day infrastructure such as tracks and kennels are very different for
greyhounds and horses, and so these facilities cannot be shared. Some ancillary race day
infrastructure such as grandstands, cabling and feeds for photo finish and broadcasting and
steward rooms may be able to be shared if designed well. Other ancillary race day
infrastructure may need to be replicated for each race track. This may include
infrastructure such as the judge’s box and location of video cameras, where there is a
dependence on the individual race code finish line.
Thirdly, the CGRC will not agree to the greyhound track being located within the confines of
a horse or harness racing track. Under this approach, spectators are too far removed from
the track and will be less likely to attend races at the track.
Greyhounds are very sensitive to loud noises, and so noise levels would need to be
assessed at a new site before the CGRC agreed to relocate. The current noise levels at the
CGRC’s Symonston facility are satisfactory.
As with the other racing codes in Canberra, a key concern for the CGRC is the lack of
certainty of ACT Government funding beyond 2016-17, and the CGRC would like to diversify
its revenue streams to ensure the club’s long-term viability. The CGRC currently rent some
of their facility to an outdoor fitness club, and have previously held other non-greyhound
events at the track.
The majority of the CGRC’s revenue is derived from racing fees from being broadcast on Sky
TV. Given that the CGRC depends financially on broadcast revenues, the CGRC would
require a potential new facility to be fully constructed before the club would move to it.
Broadcast revenue would be negatively impacted if the CGRC were required to temporarily
halt their racing schedule.
The topography of the CGRC’s current site at Symonston precludes another tenant
colocated there. The only available land for another tenant is steeply sloped, and to be
made useable would require substantial earthworks with a significant financial cost
attached.
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The ownership and management structure of a colocated facility is an issue that will need
to be resolved for all parties. Potentially, this may involve a CEO overseeing the facility, with
managers for each of the racing codes and EPIC. Maintenance costs for a colocated facility
will also need to be shared appropriately between all parties.
Vision for colocation
The CGRC is open to the idea of colocation, provided that the CGRC’s facilities are separate
from the facilities for horse and harness racing. However, synergies could be realised
through the sharing of office space and administrative functions, the construction of a
shared multi-storey carpark for patrons, and from shared maintenance costs.
The CGRC’s facilities would need to be an improvement on their current facilities at
Symonston. This would include:

a longer straight on the race track (modelled on the Bendigo track), and a longer
straight training track;

increased water storage facilities;

a swimming pool for therapy or exercise, which could potentially be shared with the
horses; and

a grass paddock for free galloping.
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Exhibition Park in Canberra
Summary of issues and concerns
The primary concern for EPIC is in regards to the nature, intensity and duration of the
events that are held at the site each year. While the existing facility can adequately
accommodate these events, if they were to colocate with the racing codes then EPIC’s
calendar of events may impose restrictions on the racing codes.
The potential conflict with the racing codes would be EPIC’s three major events
Summernats, the Royal Canberra Show, and the National Folk Festival. These events have
long set up and pack down periods which make it difficult or unable to use the site for other
purposes. In addition, the lights, smells and sounds (including fireworks) often associated
with these events may negatively impact on greyhounds or horses on race days at a
colocated facility (this is unlikely to be an issue on non-race days). If EPIC was relocated
some of its current events may move to alternate venues, for example the Farmers markets
held on Saturday mornings.
Each event also has its own infrastructure requirements, which would need to be catered
for at a new location. These include basic camping facilities, circuitous and straight bitumen
roads for Summernats, a main arena, dog rings, exhibition buildings, meeting rooms, toilets
and showers, grassed areas, stables, and administration offices. A large carpark including
coach/bus parking bays would also be required to accommodate event patrons.
An ongoing challenge for EPIC relates to its revenue base. EPIC’s charter is to operate
self-sufficiently (where possible), and not be reliant on the ACT Government for its funding.
Towards this goal, EPIC has implemented a number of alternate revenue streams including
a profitable camping ground that meets the travelling needs of grey nomads visiting the
Nation’s Capital, as well as patrons attending events at the venue.
EPIC has identified an area for potential revenue growth in hosting more outdoor concerts
and/or motor sport events at the venue. There is a demand for these type of events in
Canberra, but there are a limited number of venues able to host these due to noise
restraints. Due to EPIC’s close proximity to urban areas in Dickson and Watson, EPIC is
limited to the number of events it can host, even during the day, per year.
Another area for potential revenue growth is hosting larger exhibitions. Increasing
exhibition building space would allow EPIC to attract national and international trade shows
that currently are not able to be held in the ACT.
The ownership and management structure of a colocated facility is an issue that will need
to be resolved for all parties. The governance model will be the key to successfully
managing a new collocated facility. Potentially, this may involve a CEO or Board overseeing
the facility, with managers for each of the racing codes and EPIC. There is potential for
shared revenue opportunities such as catering commission from catered events at the
facility. Maintenance costs for a colocated facility will also need to be shared appropriately
between all parties.
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Vision for colocation
While EPIC’s current facility is more than sufficient for its operations, the organisation is
agreeable to the idea of colocation with some or all of the racing codes at a greenfield
location with less stringent noise restrictions. This would allow EPIC to host outdoor
concerts and/or motor sport events, as there is currently limited venues in the ACT. In
addition, being able to increase the number of these type of events would further increase
EPIC’s revenue base.
EPIC has also indicated that if relocated it would be possible for the venue’s footprint to
consolidate. Under this option, an area of approximately 20 hectares would be sufficient for
EPIC to continue to host its events.
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Appendix C: Requirements for a new facility
Table C.1 provides the information we gathered during our consultations from the ACT racing clubs and EPIC about their requirements for a possible new or
colocated site. This data was used to inform the estimates of the costs of relocating and colocating the racing industry. We collected information for a low and
high cost scenario. The low cost represents the minimum requirements the site would need to have to replicate the existing facilities of the racing industry and
EPIC and the full range of facilities represent those that would be desirable for the racing clubs to meet all of the strategic and business plans for their code.
Table C.1: Minimum and full range of facilities required
Minimum requirements
CRC
Full range of facilities
CHRC
CGRC
Length: straight
1600m
Surface: synthetic
Dimensions: 30m
wide
Length: approx. 120m
back and front
straights
Surface: Sand
Dimensions: oval
track approx. 457m x
5m wide
EPIC
CRC
CHRC
CGRC
EPIC
Racing
infrastructure
Racing Track
Length: 2200m
Length of straight:
500m
Surface: Turf
Dimensions: 25m
wide
Length: 1800m
Length of straight:
400m
Surface: Synthetic
Dimensions: 20m
wide
Redesign of
synthetic track
and ambulance
track
Length: 2200m
Length of straight:
500m
Surface: Turf
Dimensions: 25m
wide
Length: Straight
1600m plus oval
1200m
Surface: Gravel
Dimensions: 30m
wide
Length: approx.
150m back and
front straight
lengths
Surface: Sand
Dimensions:
approx. 600m
oval track
Length: 1800m
Length of straight:
400m
Surface: Synthetic
Dimensions: 20m
wide
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
Training Track
Length: 1800 to
2000m
Length of straight:
400m
Surface: Turf –
B Grass Training
Track suitable for
racing
Dimensions: 20m
wide
CHRC
Length: 800m
Surface: synthetic
Dimensions: 30m
wide
Full range of facilities
CGRC
Straight training
track:
Length: 400 m
Surface: Sand
Dimensions: 8 m
Exercise yards:
Length: 100 m
Surface: Sand
Dimensions: 25 m
EPIC
CRC
CHRC
CGRC
Length: 1800 to
2000m
Length of straight:
400m
Surface: Turf –
B Grass Training
Track suitable for
racing
Dimensions: 20m
wide
Length: 800m
Surface: synthetic
Dimensions: 30m
wide and 10m wide
Lights
Straight training
track:
Length: 600 m
Surface: Sand
Dimensions: 8 m
Exercise yards:
Length: 100 m
Surface: Sand
Dimensions: 25 m
Length: 1600m
Length: 1600m
Length of straight:
300m
Length of straight:
300m
Surface: Sand
Surface: Sand
Dimensions: 10m
Dimensions: 10m
Additional - Length:
1600m
Additional Length: 1600m
Length of straight:
300m
Length of straight:
300m
Surface: Sand
Surface: Sand
Dimensions: 10m
Dimensions: 10m
Required to
accommodate up to
500 horses
Required to
accommodate up
to 500 horses
EPIC
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
Stables/Kennels
– race day
150 tie up stalls
CHRC
100 stables
3 swab stables
5 overnight visitor
stables
2 veterinary
facilities
Full range of facilities
CGRC
EPIC
Race Day kennels &
Trial Kennels
1 Kennel block to
house approximately
180 dogs
6m x 4m storage
area, weigh room 6m
x 12m, Stewards
room
Vets room
Rugs/Freezer room
Toilet
Staff locker area
Wash bay in kennels
Stables for
Canberra
show
CRC
CHRC
150 tie up stalls
100 stables
3 swab stables
5 overnight visitor
stables
With air
conditioning
2 veterinary
facilities
With air
conditioning
CGRC
Race Day kennels
& Trial Kennels
1 Kennel block to
house
approximately
180 dogs
6m x 4m storage
area, weigh room
6m x 12m,
Stewards room
Vets room
Rugs/Freezer
room
Toilet
Staff locker area
Wash bay in
kennels
EPIC
Stables for
Canberra show
With air
conditioning
Stables/Kennels
– longer-term
500 stables plus 500
stable yards
60 stables + day
yards. Away from
the track.
Approx. 10 for
travelling / visiting
trainers
May utilise race day
trial kennels
500 stables plus
500 stable yards
80 stables + day
yards
With air
conditioning
With air
conditioning.
Approx. 10 for
travelling /
visiting trainers
May utilise race
day trial kennels
With air
conditioning
Grandstand
2000 member
grandstand. 2000
public grandstand
400
500
2000 member
grandstand. 2000
public grandstand
1000
500
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
CHRC
Full range of facilities
CGRC
EPIC
CRC
CHRC
CGRC
EPIC
Office buildings
1 office building for
30 staff (in the
event of colocation
of all codes and EPIC
to accommodate
Administration,
Racing, Events &
Catering Staff)
Yes - for 2 staff
Yes - 4 staff
Main Office 12m x 6m
for 2 admin staff plus
Board meeting table,
safe and
filing/copying
equipment
Archive room 2m x
6m
Yes for
EPIC,
RNCAS,
Summerna
ts
1 office building
for 30 staff (in the
event of
colocation of all
codes and EPIC to
accommodate
Administration,
Racing, Events &
Catering Staff)
Yes - for 4 staff
Yes - 4 staff
Main Office 12m x
6m for 2 admin
staff plus
Separate Board
meeting room,
safe and
filing/copying
equipment
Archive room 4m
x 12m
Yes for EPIC,
RNCAS,
Summernats
Car parks
1800 public car
parks, and 250 for
members. 90
vehicle car park for
horse floats (40
trucks + 50 cars)
which would need
to be near the
stables.
300 for race days
40 plus grassed area
Some days
would
require
2500
spaces
1800 public car
parks, and 250 for
members. 90
vehicle car park
for horse floats
(40 trucks + 50
cars) which would
need to be near
the stables.
800 for major race
days
100 plus grassed
area
Some days would
require 2500
spaces
Status quo is 3
function rooms (for
600) and 2
commercial kitchens
(for 1000)
Yes, one event
with on-site
catering
10, 15 people, on-site
catering
Commerci
al kitchen
Status quo is 3
function rooms
(for 600) and 2
commercial
kitchens (for 1000)
Yes, 4 events with
on-site catering
10, 15 people, onsite catering
Commercial
kitchen
Yes
Yes
Additional
facilities
Function
facilities
Cool rooms and bar
facilities
Broadcasting
studio
Yes, purpose built
for television
production and race
day sound
operations
Cool rooms and
bar facilities
Yes
Yes
Yes, purpose built
for television
production and
race day sound
operations
Deloitte Access Economics
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Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
Licenced club
Consider
Veterinary
facilities
Food outlet
CHRC
Full range of facilities
CGRC
EPIC
CRC
CHRC
CGRC
Yes
Yes, Bar and Lounge
area, Cool room
Consider
Yes
Yes, Bar and
Lounge area, Cool
room
Yes
Yes in kennel block
Full equine
veterinary clinic
including equine
operation facility
(consider
relocating
Canberra Equine
Hospital)
Yes
Yes in kennel
block
Yes or some form
of water supply
Water tank stored
water 160,000 litres
Kennel Tank 20,000
litres
Bore water per day
average 30,000 litres
at capacity of the
bore
1 (50 mega litres),
install bore for
pumping in excess
of 150 megalitres
per annum
Yes - self-sufficient
could be achieved
through water
harvesting on-site
Water tank stored
water 250,000
litres
Bore water per
day 40,000 litres
EPIC
Yes, 8000 people
Site
Dam(s)
1 (50 mega litres),
install bore for
pumping in excess
of 150 megalitres
per annum
Non town
water
solution
Non town water
solution
Deloitte Access Economics
62
Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
CHRC
Full range of facilities
CGRC
EPIC
CRC
CHRC
CGRC
EPIC
Other
20 Horse walkers
(walkers
accommodate 8
horses)
Open paddock
areas with
sufficient and
appropriate
shelter
Lounge area toilets:
men's & women's
10,000m2
of
exhibition
space.
With
2,500m2
foyer plus
1,000m2
loading
dock/com
mercial
kitchen.
20 Horse walkers
(walkers
accommodate 8
horses)
Open paddock
areas with
sufficient and
appropriate shelter
Lounge area
toilets: men's &
women's
10,000m2 of
exhibition space.
With 2,500m2
foyer plus
1,000m2 loading
dock/commercial
kitchen.
Wi-Fi capabilities
Central ‘tack
rooms’ with
storage for large
items
Betting area toilets:
men's & women's
6000m2 of
exhibition
space with
1500m2
foyer and
1000m2
loading
dock/com
mercial
kitchen
Wi-Fi capabilities
Central ‘tack
rooms’ with
storage for large
items
Betting area
toilets: men's &
women's
6000m2 of
exhibition space
with 1500m2
foyer and 1000m2
loading
dock/commercial
kitchen
Equine pool
Large fenced sand
arena (possible
inside training
track)
Bistro: seating for 70
5000m2
under
cover
atrium –
joining the
two
exhibition
buildings
Equine pool
Large fenced sand
arena (possible
inside training
track)
Bistro: seating for
70
5000m2 under
cover atrium –
joining the two
exhibition
buildings
Deloitte Access Economics
63
Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
Full range of facilities
CHRC
CGRC
EPIC
CRC
CHRC
CGRC
EPIC
5 Covered round
yards
Quarantine area
for sick/infectious
horses to be away
from stabling
complex.
Bistro: Disabled toilet
& women's
toilet/mothers room
Basic
camping
(major
events)
5 Covered round
yards
Quarantine area
for sick/infectious
horses to be away
from stabling
complex.
Bistro: Disabled
toilet & women's
toilet/mothers
room
Basic camping
(major events)
Water walker
Secure covered
Float parking
facility
Race Day Office 3m x
6m in betting area
Circuitous
road
(Summern
ats)
Water walker
Secure covered
Float parking
facility
Race Day Office
3m x 6m in
betting area
Circuitous road
(Summernats)
APN (2 people)
Secure Machinery
and workshop
area.
Groundsman work
and storage
Straight
bitumen
road
(approx.
600
metres) –
use for
burnouts
(Summern
ats)
APN (2 people)
Secure Machinery
and workshop
area.
Groundsman
work and storage
Straight bitumen
road (approx. 600
metres) – use for
burnouts
(Summernats)
Racecaller room (1
person)
Secure garaging
for Mobiles
Groundsman Garage:
6 bay garage
sufficient for
equipment, truck,
ute, tractor, transport
buggy and associated
equipment such as
slasher etc.
Main
arena with
lighting
Racecaller room (1
person)
Secure garaging for
Mobiles
Groundsman
Garage: 6 bay
garage sufficient
for equipment,
truck, ute, tractor,
transport buggy
and associated
equipment such
as slasher etc.
Main arena with
lighting
Deloitte Access Economics
64
Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
CGRC
EPIC
Wood Shed 10m x 4m
Dog rings
(combined
for
German
Shepherds
/Dogs ACT)
+ one ‘club
house’
Sound technician
room (2 people)
Diesel Shed 3m x 2m
Stewards room (10
people)
Trainers hut
(multiple trainers to
view and time track
work)
Judges room (3
people)
Turnstiles (8000
people)
CHRC
Full range of facilities
Could get by on
55 hectares of
space.
CRC
CHRC
CGRC
EPIC
Judges room (3
people)
Could get by on 55
hectares of space.
Wood Shed 10m x
4m
Dog rings
(combined for
German
Shepherds/Dogs
ACT) + one ‘club
house’
Exhibition
Halls /
break out
rooms /
meeting
rooms
Sound technician
room (2 people)
Swimming pool
and other equine
facilities (chiro,
dentist)
Diesel Shed 3m x
2m
Exhibition Halls /
break out rooms /
meeting rooms
Front Gate Box 2m x
2m
Sheds
Stewards room
(10 people)
Walking Machines
Front Gate Box
2m x 2m
Sheds
Laundry & Toilet
Block
Toilets/sho
wers
Trainers hut
(multiple trainers
to view and time
track work)
Sand Roll
Laundry & Toilet
Block
Toilets/showers
Grass
areas
Turnstiles (8000
people)
Sand jogging track
Swimming
exercise / therapy
pool (perhaps
shared facility
with horses)
Grass areas
Deloitte Access Economics
65
Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
2 Members room
(500 people)
CHRC
Full range of facilities
CGRC
EPIC
Could get
by with 10
hectares
for the
entire site.
CRC
CHRC
2 Members room
(500 people)
Does not currently
have a big screen,
but would use it if
available.
Owners room (100
people)
Owners room (100
people)
Vet hospital
partnership with a
university
Committee room
(30 people)
Committee room
(30 people)
Multi code Centre
of Excellence
2 Jockeys rooms
(male/female, 25
people)
2 Jockeys rooms
(male/female, 25
people)
Mounting yard (for
parade pre-race and
jockeys to mount
and return after
race)
Mounting yard
(for parade prerace and jockeys
to mount and
return after race)
Equine jumps
facility for training
Equine jumps
facility for training
Storage shed (for
club related
equipment)
Storage shed (for
club related
equipment)
CGRC
Free Galloping
paddock:
200 m x 200 m
grass surface
EPIC
Could get by with
10 hectares for
the entire site.
Deloitte Access Economics
66
Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
CHRC
Full range of facilities
CGRC
EPIC
CRC
Work shed (to
accommodate all
machinery and
equipment,
Racecourse
manager’s office
and staff facilities
for track staff.
(Security fence
around)
Work shed (to
accommodate all
machinery and
equipment,
Racecourse
manager’s office
and staff facilities
for track staff.
(Security fence
around)
Chemical store and
wash down shed to
meet legislative
requirements
Chemical store
and wash down
shed to meet
legislative
requirements
Steward Towers
Steward Towers
Track hut
Track hut
Manure pits
Manure pits
Track lights
Track lights
Irrigation system (all
tracks including
sand)
Irrigation system
(all tracks
including sand)
Big screens
Big screens
Supervisor house
Supervisor house
Caretaker house
Caretaker house
Consider stable staff
accommodation
Consider stable
staff
accommodation
CHRC
CGRC
EPIC
Deloitte Access Economics
67
Colocation feasibility study – racing codes and exhibition facilities
Minimum requirements
CRC
CHRC
Full range of facilities
CGRC
EPIC
CRC
Retail outlets
(consider for
saddler, feed
merchants and
farrier)
Retail outlets
(consider for
saddler, feed
merchants and
farrier)
Semaphore board
Semaphore board
Finishing post
Finishing post
CHRC
CGRC
EPIC
Betting room
Bar
Gaming machines
Deloitte Access Economics
68
Limitation of our work
General use restriction
This report is prepared solely for the internal use of the ACT Chief Minister, Treasury and
Economic Development Directorate. This report is not intended to and should not be used
or relied upon by anyone else and we accept no duty of care to any other person or entity.
The report has been prepared for the purpose of undertaking an economic cost benefit
analysis of colocation of the Australian Capital Territory racing codes and the Exhibition
Park in Canberra facilities. You should not refer to or use our name or the advice for any
other purpose.
Deloitte Access Economics
69
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Deloitte Access Economics
70