The Northern Midlands Council bought a block of land in Perth for close to half a million dollars over its value last year and is moving ahead with its plans to develop the land.
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The council approved its proposal to subdivide the land at 10 Norfolk Street into eight residential blocks and a 2.5 hectare public open space at its February meeting.
The Tasmanian Government's Valuer-General valued the block at $165,000 in March 2019 at the time of the sale, yet the council purchased the land for $640,909. A total of $475,909 over the government's given value.
The council has refused to disclose the property valuation it had conducted before purchasing the block in 2019.
Council's general manager Des Jennings said further costs to subdivide the block would "regretfully" be confidential until the works had commenced at the site.
"The total possible construction cost for the subdivision is estimated between $450,000 and $500,000," he said.
"We have the breakdown available, but we will be engaging contractors for that work."
A concern raised by nearby residents was the area's flood risk but Mr Jennings said the council had improved stormwater flow to reduce the impact of significant rain and was undertaking further works.
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The open space will extend the existing parkland located at the corner of Drummond and Norfolk Streets.
Council's consultant planner Chloe Lyne said the site's risk rate of flooding was low but parts required fill to ensure they were above the 100-year flood line.
"The proposed fill works have been assessed by Hydrodynamica as not likely to have an impact on the flood flows and will not result in an increase in the extent of flooding on other land or increase the risk to other structures," she said.
Tasmanian company Casanda Securities bought the land in 2010 for $140,000 before selling the 3.211 hectare block last year to the council.
The proposal to purchase the land was discussed at closed council meetings in September 2017 and December 2018.
Councillors Matthew Brooks and Ian Goninon moved to refuse the council's own development with the support of councillor Janet Lambert but the motion was lost.
The same three councillors voted against approving the planning application but were outvoted three to four, meaning the project will go ahead.
The land is a part of the council's $6.3 million Sheepwash Creek Open Space Corridor Concept Plan.
