No Plan B: Atlassian founder says Australian Technology Park deal is 'a huge missed opportunity'

An artist’s impression of the future of ATP from the Atlassian / Walker bid.
Atlassian co-founder Scott Farquhar. Image: Supplied.

Atlassian co-CEO Scott Farquhar believes any chance that the Australian Technology Park can become a tech hub is gone, after the New South Wales government announced yesterday it was selling the 14 hectare site to a consortium led by developer Mirvac and the Commonwealth Bank in a deal worth $263 million.

Altassian’s rival bid in conjunction with Walker Corporation, which envisaged a major hub with Australia’s biggest tech startups, including Fishburners, venture capitalists and the University of Technology Sydney, failed and Farquhar admits they didn’t have a Plan B for the future of the local industry.

“This was not about Atlassian, this was about Australia. We’re really back to the drawing board. This has really knocked us for six. We really couldn’t imagine the missed opportunity, so we didn’t have a plan B and I’m not sure Sydney has a Plan B for creating a technology park like ATP,” he told Business Insider.

Farquhar said the government’s decision was “a huge missed opportunity”.

“Australia needs to improve its technology standings in the world if we want to continue our quality of life and our standard of living. We need to produce more technology than we do today because we’re consuming more technology from overseas than ever before. All those jobs go to California and if we’re not producing technology then we’re going to be an importer and our tax dollars and everything are going to go overseas.”

Atlassian has shown Australia can produce a world standard technology business, filing its IPO for the US Nasdaq this week, and analysts believing it could be worth more than $A7 billion, making its value greater than ASX-listed companies such as Mirvac and Andrew Forrest’s Fortescue Metals.

Many leading voices in Australia’s tech community, which has been bouyed lately by statements by the new prime minister Malcolm Turnbull about the need for Australian business to be more agile an innovative, have expressed disappointment at Mirvac closing the deal. The outcome is particularly tough for Fishburners, Sydney’s largest co-working space which counts News Corp, Optus, and Google among its backers. It has run out of space and general manager Murray Hurps told Business Insider today he had been banking on the Atlassian bid winning for its future expansion.

Despite pledges from Mirvac and the state government that the ATP will continue to have a tech focus, Farquhar doesn’t believe they will come to fruition.

In his press release announcing that Mirvac had won the tender on “both financial and non-financial criteria”, planning Minister Rob Stokes was an pains to emphasise the technology side, saying “our aspiration for this site is to continue the transformation from dilapidated railway buildings to a growing technology hub.”

“Up to to 75,000sqm of floor space capacity will be reserved at ATP for technology uses into the future,” the release said. The Commonwealth Bank is taking 93,000sqm on a 15 year lease.

In its announcement, the Commonwealth Bank said it was moving its 10,000 people into “a growing technology hub, providing us with a significant opportunity to partner and collaborate with universities, start-ups and other innovative companies.”

Commonwealth Bank will also partner with Mirvac and Centuria to establish a Tech Incubation Fund to further enable and encourage the use of the Australian Technology Park precinct as a technology and innovation hub.

‘Window dressing’

The announcement included plans for a $2.1 million “tech incubation fund” established by Mirvac, the CBA and Centuria to encourage technology startups to locate in the Park. Farquhar labelled it “window dressing”.

“If you have to use technology funds to subsidise rent for technology companies you haven’t created the right environment. If it requires a subsidised rent to attract people down there, that’s not sustainable,” Farquhar said.

“Maybe the government believes there will be a technology park there, but when over half the space is being taking by a bank as a tenant, I’m not sure they’re going to attract people who want to move down there. Startups aren’t flocking to sit next to the Commonwealth Bank,” he said. “I don’t see how that’s going to be a technology park”.

The news that the Commonwealth Bank will close its offices in Parramatta, Sydney Olympic Park and Lidcombe by 2020 to consolidate its workforce on the Redfern site has the Atlassian boss in disbelief about the decision from NSW Premier Mike Baird’s government.

“The Premier’s the minister for Western Sydney, so it’s curious that the minister for western Sydney effectively endorses a deal that moves 10,000 jobs from Western Sydney to the city, at the same time shutting down Sydney’s really only viable alternative for a technology park,” he said.

“I’m shaking my head in terms of what thought process led to that.”

Farquhar believes his home state’s decision gives Victoria and the state’s Labor premier Daniel Andrews a huge opportunity.

“If I was the Victorian government, I’d be pretty quickly looking at how I could take advantage of that and what they could do to steal our best people away,” he said.

He’s also scathing of Baird’s recent idea of a tech park at White Bay as part of the NSW government’s plan to redevelop the waterfront area around the Anzac Bridge in Sydney’s inner west.

“I don’t think it makes sense because startups are not looking out the window at their water views. They’re heads down building stuff, so they want cheap rent where they don’t have water views. I don’t know a single startup that wants to spend money on expensive water views as their rent,” he said.

“I can’t see White Bay being a feasible solution at all because the rents will be too high.”

However, Farquhar does see some positives coming from the company’s failed bid, believing it helped put debate about the technology industry on the national map

“If nothing else this has definitely put technology on the map in terms of its importance to Australia, because 12 months ago it wasn’t part of the national discourse,” he said.

“Hopefully the government will learn from this opportunity and maybe they can find somewhere else to create a technology ecosystem.”

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