Renovating a Legacy: the Miller EstateTeresa Zolnierkiewicz, head of philanthropy

ANZ Global Wealth and Private BankingJuly 2013

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Governance structure – ANZ Trustees

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Outline of this case study

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1914: the genesis of social investment

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1914 – 2007: the Alexander Miller Estate – doing good

How the Estate operated: • Held and purchased a Victorian regional property portfolio - by

2007 held a significant property portfolio of around $20m• Directly rented these properties as affordable housing

for disadvantaged people – regional, elderly poor• By 2000 it had 17 property sites & 173 residents• Housing units dated mostly from 1920s-1930s• Some funds (<$10m) were held in an equities portfolio

to generate additional income• Essential maintenance was barely covered by

rents – supplemented by income• Upgrades and capital works were not covered in this model - could

be sought by applying for grants – however, this was problematic

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1914 – 2007: the Alexander Miller Estate – doing good

Pressure for change:• Model was not sustainable• Trustees were in effect running an operating

charity on a short term time horizon – not a coreskill set of any the 3 trustees

• The changing needs of the residents demanded adifferent solution – one that was consistent withMiller’s vision

• There were risks in the changing nature ofresidents – putting pressure on the model

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2007: the Miller Estate – the process of creating change

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2007-2013: dependencies - qualities needed to make change work

Estate Trustees:• Chairman: Ross Scholes-Robertson• ANZ Trustees• Gary Miller

Miller Residents:• 174 Residents• 12 Volunteers• 17 Sites

ANZ Trustees:• Senior Legal Counsel• Company Rep’ve• Head of Philanthropy• Investment Mgrs• Philanthropy Manager• Board of Directors• Middle Office• Back Office

Govt/Other:• Housing

Consultant• Tender Process• Solicitors• Office of Housing• Attorney-General• Supreme Court

• RHA – Wintringham

CEO• Project Mgr• Architect• Board of

Directors

Environment:External deadlines Property market movements Nation Building & opportunities

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2011 newly constructed homes

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2012: the Miller Estate – the transformation

THEN• 17 sites

• 173 residents• Vacancies

• Adequate homes from 1920s/1930s in need of upgrades

• Local volunteers provide some monitoring

• Rudimentary gardens and landscaping

• Trustees as landlords

NOW• 12 sites (5 sold or in process)• 160 residents • No vacancies• Brand new purpose built or significantly

renovated • Wintringham provides supervision and care

with potential to transition• Outdoor spaces developed including on

some sites men’s sheds, other communal spaces such as bbqs, lake, all new homes with personal veranda/balcony

• Trustees governing the operations of the Estate/oversee Wintringham as leasee

• Trustees monitor impact and continue to consider potential for future developments and or property sales/investments

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2013: Miller Homes - the change

New construction [completed] Renovation [completed]Shepparton - Nation Bldg: construction 36 units on existing land. [August 2011]

Geelong (Belmont) - State Govt: renovation 12 units. [Dec 2011]

Ballarat-State - State Govt: construction 14 units [Aug 2011]

Maryborough - State Govt: renovation 12 units on existing site. [Aug 2011]

Geelong (Manifold Heights)-Nation Bldg: construction 14 units (6 being addn’l build) on existing site. [July 2011]

Euroa - State Govt: extensive renovation 8 units on existing site. [Oct 2011]

Castlemaine -State Govt construction 9 units on existing site. [Jan 2012]

St Arnaud - State Govt: renovation 6 units & construction 5 new on existing site. [August 2011]

Geelong (Highton) - Nation Building: construction 34 units on land specifically purchased by Miller Estate [Aug 2011]

Benalla - State Govt construction 109 units on existing site. [Mar 2012]

Total government investment: $33million

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A replicable model

Registered Housing Agencyprovides tenancy &

property management & project management services

Community Land Trustprovides legal structure

takes liability &responsibility

Finance institution

Building/construction

Donors of land or funds

Tenants

MODEL 2: Community Land Trust (UK)

Registered Housing Agencyprovides tenancy &

property management & project management services

Charitable Trustprovides legal structure

takes liability &responsibility

Gov’tFunding

Building/construction

Private Donor

Tenants

MODEL 1: Miller Estate (Aust)

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A replicable model

GOVERNANCE/ TRUSTEESHIP

INVESTMENTS

GRANTINGIMPACT

GOVERNANCE/ TRUSTEESHIP

IMPACT

TRADITIONAL REALISED POTENTIAL

ASSETS ASSETS

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What worked well and what did not

• Most of the people who started the change, ‘finished’ the change

• Expert advice from relevant parties, eg. ANZ Trustees legal counsel, smooths the way

• The complexity of the task was not totally understood at the outset

• A new model means there are some questions no-one can currently answer easily, eg. property valuation

• Different parties frequently had different sense of urgency in the process (perpetuity vs now)

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Lessons

• Every change takes courage, a leap of faith, and a champion

• Focus on what you are good at, and get experthelp for the rest

• Managing and deepening relationships is vitaland is everyone’s responsibility

• Relationships will change through the courseof the process

• Share all the responsibilities – everyone witha stake has an important contribution to the process

• You cannot estimate when you will finish the change, and it always takes longer than you expect – this took since 2007 and not complete

• There will always be roadblocks. If things get tough you need to focus on the objective

• Trust between parties is important

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Alexander Miller Estate: Questions

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Contact Details

For further information about ANZ Trustees, please refer to the following:

ANZ Website links:

• What do we do?http://www.anz.com/personal/private-bank-trustees/trustees/

• Philanthropyhttp://www.anz.com/personal/private-bank-trustees/trustees/philanthropy/

• Investment Managementhttp://www.anz.com/personal/private-bank-trustees/trustees/investment-management/

• Grantinghttp://www.anz.com/personal/private-bank-trustees/trustees/granting/

Contact details:

ANZ Trustees direct line: 1800 011 047

Nicole Smith, Senior Business Development Manager, Victoriae Nicole.smith2@anz.com t (03) 8654 0904