The Northbourne Avenue plans that have never been seen before

Mr Russell and his business partner Wayne Gregory, through their company Braturn, had been picked as the preferred tenderers for two prime blocks on Canberra's main avenue.

The multimillion dollar proposal they had dreamed up for the twin sites - Hyper on Northbourne - had appeared to tick all the right boxes.

More than 200 apartments and 1000 metres of commercial space would be rented out at 20 per cent below market rent. There would be a city farm, and a social housing development for people with intellectual disabilities.

On May 16, the Suburban Land Agency assured Mr Russell and Mr Gregory no decision had been made yet.

"We appreciate the significant work you and your team have put into this project to date," the letter said.

"As you will appreciate the additional information you provided was quite detailed and in order to give it the consideration it deserves the process is taking longer than originally anticipated.

"Please be assured we will contact you if we require any clarification and as soon as we have a decision from the delegate."

But the agency drafted another letter to the developers that day, which outlined a recommendation made by the team handling the tender at least a month earlier.

It would be another two weeks before the pair received this letter, in which they were told the former Northbourne flats sites had been pulled from the market, after a nearly year-long tender process.

Suburban Land Agency chief executive John Dietz said at the time the preferred tenderer could not meet the territory's reserve price for the block.

"Negotiations to improve the financial offer were unsuccessful," Mr Dietz said.

ACT Urban Renewal Minister Rachel Stephen-Smith told parliament that after a "lengthy" conversation, the tenderers could not meet the sale price.

But hundreds of emails obtained by The Canberra Times under freedom of information laws raise questions as to the extent to which such negotiations took place.

Mr Russell and Mr Gregory say they were left in the dark, while bureaucrats worked behind the scenes, ultimately deciding to shut the process down.

The tenderers were eventually told they would not be able to proceed with their development, six weeks after the tender evaluation team recommended the tender end.

But Mr Russell - speaking exclusively to The Canberra Times - said he was disappointed he'd been told on May 16 their proposal was still under consideration when the agency had drafted another letter telling them the opposite.

"We have always acted in good faith in any and all our discussions," Mr Russell said.

"The suggestion that there are reports that false advice was provided to us as the preferred tenderer, some four weeks after records show a decision about the future of the site was made, is extremely disappointing."

An ACT government spokeswoman denied this was the case, and said the tender process did not formally conclude until May 28, when the tenderer was told.

She maintained all actions and decisions were undertaken "with the required probity protocols".

The blocks - home to the ageing Northbourne Flats - were put up for sale on June 28 2018, as part of a wider plan to sell off the ACT's old public housing stock to cash in on an asset recycling bonus on offer from the Commonwealth.

The deadline for the bonuses was June 2019, and the Northbourne blocks were one of several the government needed to turn over before that time.

But given the size and situation of the blocks, City Renewal Authority chief executive Malcolm Snow said they would be sold as a package, and via tender, in order to achieve the best design outcome for the site.

Canberra property juggernauts JW Land and Geocon each put in a tender for the blocks.

Geocon even asked the government to halt demolition of the flats in November 2018, just in case it won the tender - the company wanted to do the job itself (the government declined).

But Mr Russell and Mr Gregory's bid was "impressive", Mr Dietz conceded, even as he was announcing the process would be shut down without a sale.

Hyper on Northbourne would have included about 23,000 square metres of "high quality landscaping" that would have been open to the broader Canberra community.

They planned for a working city farm, to provide fresh food to the restaurants and an aged care facility on site.

It would have included more than 200 build-to-rent apartments that would be rented out at 20 per cent below market rate.

It would have also given 12 units to Project Independence, which provides social housing for people with intellectual disabilities.

The development would have included two hotels - a three and a five-star - with a combined 228 rooms and a 1500 person conference and events centre.

The developers would have also rented out 1000 square metres of commercial space at 20 per cent below market rates, to support start-ups and "cottage retailers".

The proposal alone cost $850,000 to put together, Mr Russell said.

"We engaged an international team of architects and consultants to deliver an amazing vision for the sites and the ACT community," Mr Russell said.

He would not disclose the price they offered but said the original brief "clearly weighed the quality of design and social capital offering above price".

The Suburban Land Agency had been tic-tacking with Mr Russell through sales agent Colliers since November, seeking more detail about the "non-monetary components" of their offer.

Mr Russell and Mr Gregory were chosen as preferred tenderers in early January 2019 and invited to start formal negotiations.

Mr Russell asked the Suburban Land Agency for a meeting in early February, while Mr Gregory was overseas. He was asked during the meeting to compile an extensive list of the economic and social impacts of the proposal. He maintains he was never asked to increase their offer for the land.

In a letter sent on March 6, Mr Russell said: "We take very seriously the governments desire to interrogate and understand all elements of this complex proposal.

"As you can imagine, analysing and quantifying measures that are not commonplace in contemporary developments, requires some time and effort.

"Our hope is that this body of work will provide the ACT government a significant amount of data to assist in the process of consideration of the Braturn proposal."

But top bureaucrats had already begun to debate what would happen if the tender fell through.

On March 4, an email from Mr Dietz revealed Mr Snow had suggested the site be used as a demonstration housing precinct if the sale failed. Mr Dietz said he was open to the idea although the usual practice would be to default to an over-the-counter sale.

The emails show ACT public servants arranged another internal meeting, when Braturn came back to them in late March with so much material it could only be sent via USB .

But by then, Suburban Land Agency deputy chief executive Neil Bulless had informed Mr Dietz that the cap for the asset recycling bonuses had been reached, rendering the sale of the Northbourne blocks and the former Macarthur House unnecessary.

Mr Russell sent a letter on April 5, saying "in the absence of any feedback or response from the ACT government, I write to re-iterate Braturn's interest in and commitment to this project.

"As you can imagine, Braturn has invested considerable time and resources into developing the Hyper on Northbourne. Let me state again that Braturn would welcome an opportunity to discuss the fiscal, economic and social elements of the proposal. Braturn is flexible in its outlook and wants to ensure all the stakeholders' expectations are met."

The letter would go unanswered.

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A brief from the team leading the process to Mr Dietz dated April 16 said they had determined that the tender should be cancelled. The exact reasons were redacted.

The minister asked for an update on the site on April 24. Colliers agent Shane Radnell also pressed the government for information on April 30.

While the developers were left waiting for a response, the government developed talking points on May 1, which would say that negotiations to increase the financial offer were unsuccessful.

On May 6, Mr Radnell again asked the Suburban Land Agency to update Mr Russell, and forwarded on another letter from the tenderers.

"Braturn and Bonmen (our building company) have been in a holding pattern since January 2019 when we were advised of our preferred tenderer status," Mr Russell wrote.

"While we are very enthusiastic about this opportunity we cannot sustain this holding position indefinitely."

On May 16, the agency prepared the two letters - one that said the tender was still under consideration, and one that said it was over. While the first letter was sent out to Mr Russell that day, the second letter was held back.

The second letter read: "The non-monetary aspects of your tender however continues to be provided to third parties and not the territory or a territory authority. Unfortunately this does not meet the definition of non-monetary component as defined in [the] Planning and Development Act 2007.

"As a consequence, the territory wishes to advise you that we are unable to proceed with your offer and the tender process has been concluded."

Government officials also began finessing a press release regarding the outcome of the tender.

Board members asked for changes that would "encourage the market".

Meanwhile other companies began circling.

A Sydney-based developer contacted the Suburban Land Agency on May 22, asking if they would consider selling the site over-the-counter for a hotel or serviced apartments.

The Suburban Land Agency decided the outcome of the tender would be announced on May 28. On this date, it finally sent the letter drafted on May 16 to Mr Russell.

A government spokeswoman denied that the April 16 brief amounted to a decision to end the tender, or that the government misled the developers.

"The tender evaluation report with a recommendation to conclude the process was prepared by the tender evaluation team in April," she said.

"Time required for the delegate to consider and approve the recommendation as well as agree the necessary steps to close the tender meant the tender process did not conclude until 28 May 2019. Therefore the response to Braturn on 16 May was correct."

She also said it was the government's strong preference to complete the sale of the sites through this process.

"Under legislation we are not able to sell land for less than market value. Unfortunately in this case, the preferred tenderer was unwilling to meet the site's market value," she said.

Braturn disputes this. The developers say they were never given a chance to up their bid. The government maintains Braturn was told their offer did not meet the reserve and they were given a chance to raise it.

The developers are now awaiting the outcome of a review of the process. As far as they are concerned, the tender process isn't over until they hear the outcome of this assessment.

"The greatest tragedy out of this is that an exceptional opportunity for the ACT community has been frustrated," Mr Russell said.

The government spokeswoman confirmed a review had taken place, and the Suburban Land Agency was satisfied that the tender process was undertaken "consistent with the process detailed in the tender documentation".

Meanwhile it's unclear when the sites will be back on the market.

Do you know more? Email katie.burgess@canberratimes.com.au