Words: Tim Baker
If you were holding your breath for the first Kelly Slater wave pool to be built on the northern Gold Coast… you might want to take a big gulp of oxygen around now. It ain’t going to happen.
The proposed site of the KS wave pool, the housing development Maddison Estate in Pimpama, has run into financial troubles, with its developer LM Investment and its director Peter Drake calling in administrators.
The Sydney Morning Herald yesterday reported of Mr Drake’s ill-fated venture: “He was selling to the very end. Even as the life savings of his investors were frozen in his foundering mortgage funds, and even as his staff were fleeing the sinking ship, Gold Coast financier Peter Drake was still traipsing the world trying to raise more money.”
Read the full story here.
The Kelly Slater Wave Company had entered into “an exclusive Memorandum of Understanding,” to build one of its wave pools on the site, but no contracts had been signed and no money had changed hands.
“Today's news of liquidation (actually voluntary administration) is obviously not good for our potential wave pool business," Slater told Surfing Life, "but we aren't actually in business with Maddison as of now, and have been waiting to really understand what the truth of the whole matter is with the company anyway. Their other business dealings have nothing to do with us and they are people I don't personally know."
Even so, Maddison Estate had been boasting about its deal with KSWC on its website, declaring back in November: “Now we are one step closer to delivering a surf destination with the stamp of approval from Kelly Slater, the world’s best surfer. This could well be the back yard of those lucky enough to live at Maddison Estate.” LM Investments has been under a cloud for some time, and was featured in a report on Four Corners on ABC TV two weeks ago, which investigated the operation of several mortgage funds in Australia.
LM Investment is the subject of a class action by investors unhappy about their funds being frozen. Questions are also being asked about the way it has promoted its investment products overseas. I’m not a business journalist so I won’t attempt to decipher the complex financial dealings of LM Investment. In a nutshell, it appears LM Investments paid around $89 million in 2008 for the 118 hectare site for Maddison Estate in Pimpama, on the northern Gold Coast. On current estimates the land is now worth around half that much. At the same time, it has accrued around $250 million in debt against the property. You can read more here.
Or watch the full Four Corners program on iView here.
Maddison Estate was still advertising during the Quiksilver Pro webcast and ran an information booth at the contest site. Its short clip for the Maddison Estate “Surf Precinct” also boasts of an alleged “eco-resort,” based at the man-made and highly energy intensive facility.
The master plan of the development now refers only to a “proposed” surf precinct and leaves the area shaded in grey, which seems appropriate in the current circumstances.
When I first sought comment from Kelly about the project two weeks ago, he told me he had only learnt about LM Investment’s troubled financial dealings from the Four Corners report the night before. He asked me to hold off on any further questioning while he focused on The Quiksilver Pro event and wanted to “try to sort this mess out.” Fair enough. This correspondent’s patience allowed the champ to seal victory at the Quiksilver Pro and upon reflection it may have been wise to continue grilling him and improve the chances of a local winner.
Maddison Estate also boasts of a swim centre run by former Olympic swimmer Sam Riley and a “sandstorm” beach volleyball facility endorsed by Olympic gold medalist Natalie Cooke.
LM Investments disputes many aspects of the 4 Corners story and has responded here.
It points out Maddison Estate “has been stamped as a project of ‘State Significance’ by the Queensland State Government and Gold Coast City Council.”
It also confirms: “an exclusive Memorandum of Understanding is in place with the company of 11-time ASP Surfing World Champion Kelly Slater – the Kelly Slater Wave Company – to deliver the world’s first continuous wave pool, within the Maddison Estate surf precinct. Full engineering and feasibilities have been undertaken, with favourable results. It is real and further announcements will be forthcoming.”
The Kelly Slater Wave Company website claims there are 6.5 million surfers in Australia, out of a total population of around 21 million. That is one in three Australians. The most generous estimate of Australia’s surfing population I’ve ever come across is 2.6 million (the Sweeney Report, Australia’s largest sporting survey).
For now at least, the dream of perfect man-made waves remains just that - a dream.