The Penrith Paceway has survived floods, fires and COVID. For more than 100 years the showground has been an institute of Sydney's west. 

It's now facing what it says could be the greatest threat to its existence, after the state government issued it with a notice to acquire its land – to make way for a multi-million-dollar upgrade to its neighbouring Penrith Stadium.

"It sort of does feel a little bit like we're collateral damage, that perhaps they've forgotten about the importance of the history," Penrith Paceway CEO Tash Greentree told 7.30.

In July this year, the paceway received a notice flagging that its land would be compulsorily acquired by the New South Wales government to make way for Penrith's new state-owned $309 million stadium. 

The Penrith upgrade stands alone as the sole remaining suburban stadium after NSW Premier Dominic Perrottet announced the other three would not go ahead in order to prioritise funding for the state's flood recovery response.

The Labor opposition has also flagged concerns about the cost of the project and raised questions about the process the government is undertaking in the potential acquisition of the paceway's land.

New documents released to the NSW upper house reveal how the state government slowly came around to the new site.

Penrith's new stadium timeline

In December last year, Mr Perrottet went on a press tour of suburban stadiums in Sydney. He was committing hundreds of millions of dollars to each of the new stadiums, including to upgrade Penrith.

The announcement was made with local Penrith MP Stuart Ayres, who at the time was trade and investment minister.

Mr Ayres has been a strong advocate of the Penrith Panthers, which leases the existing stadium. When he was asked about the stadium plans, he told reporters: "It's a full redevelopment of this facility, so everything you see here will go and be replaced by a new venue."

The Penrith Paceway sits just across the road from the existing stadium. It too welcomed the announcement. Ms Greentree says they have a good relationship with the Panthers.

"We were very excited to see that the stadium had received the funding and that they were going to be getting a new field," she said.

Three of the four stadium upgrades were scuttled in August after funding was diverted to flood recovery. Only Penrith remained. Mr Perrottet came under fire from the NRL, which claimed he had broken his promise to the league.

Two weeks after the Penrith stadium announcement was made, Mr Ayres became sports minister, giving him a key role in the government's stadium plans. Behind the scenes, government officials began plans to undertake a round of community consultations.

In his role as sports minister, Mr Ayres initiated those consultations.

An Infrastructure NSW briefing note sets out that the agency and the Office of Sport "are now progressing the stadium design phase which, at the request of the Honourable Stuart Ayres MP, Minister for Sport, includes engaging with the community and other stakeholders".

On April 4, 2022, Infrastructure NSW officials met with Penrith City Council about the stadium. They told the council these consultations would be run "through online surveys, one-on-one meetings and round table forums and will take around 12 weeks to complete".

Infrastructure NSW undertook meetings with some of the key stakeholders, including Penrith City Council, the Penrith Paceway, Penrith Panthers, Penrith Cricket Ground, Penrith Chamber of Commerce and other groups.

The Penrith Panthers strongly supported the acquisition of the paceway. In a May 20 meeting between the Panthers and Infrastructure NSW, they are recorded as stating the club’s preference was to build on the paceway site because it would cause "less disruption (don't want to lose two years of home games)", and would allow them more seating capacity.

The current stadium is selling out at 22,000 seats, and the meeting note says the club wanted a stadium with 30,000 seats.

In a May 26 meeting between the paceway and Infrastructure NSW officials, the paceway asked for a commitment for further discussions before the government considered going down the route of compulsory acquisition.

“We even shared with [the Infrastructure NSW official] thoughts of how we could work together to produce … the best possible outcome for both of the facilities,” Ms Greentree said.

On July 4, Ms Greentree says she received a phone call from a senior Infrastructure NSW official.

"He advised me that the government had made the decision to commence with the proposed acquisition of our land, and he would be sending me the documentation," she said.

"I was floored. It's very rare that you get news where you've absolutely got no words left.

"The stadium fits pretty well in its own space over there. I can't see why it's a necessity to move across into our land."

The acquisition notice left the paceway with little doubt the government had made a decision to acquire its land. It read: "The proposed area for the project has been researched at length and will unfortunately require the acquisition of the whole of [the paceway]".

Ms Greentree says she's lost staff and has struggled to take bookings for events due to the uncertainty surrounding the decision.

"It started damaging us the very day that we received that acquisition notice," she said.

"This is livelihoods for not just my staff or our participants, but the people that come to the markets, that sell their wares here, the people that are employed by the other facilities on our grounds."

Julia Finn, the shadow sports minister, told 7.30 she believed the paceway had been sidelined "at the expense of redeveloping Penrith stadium, when the stadium site is just across the road".

The Penrith Panthers welcomed the move, saying publicly: "The NSW government has commenced commercial negotiations for the acquisition of the Penrith Paceway, as part of the stadium redevelopment – allowing Panthers to remain at BlueBet Stadium next season."

Paceway is 'preferred site' for stadium, Ayres says

Mr Ayres became sports minister on December 21 last year, and was not the minister when Penrith Stadium was selected by the state government as the location for the outer Sydney stadium.

Mr Ayres was sport minister until August 5 this year, when he resigned as minister after questions were raised over whether he breached ministerial standards for his involvement in the appointment of former deputy premier John Barilaro to the role of US trade commissioner.

He has since been cleared of breaching those standards, allowing for his potential return as minister for sport.

One of the meeting minutes released to the NSW upper house appears to suggest Mr Ayres supported the move to the paceway while the consultations were underway.

After Infrastructure NSW officials met with the paceway on May 26, the minutes suggested the head of Projects NSW Tom Gelibrand had told the paceway: "Minister Ayres has suggested the best use of the paceway site would be to put the redeveloped stadium on it."

But in a later version of the document dated to May 30, 2022 the reference to Mr Ayres is removed. Instead, it reads: "Some feedback suggested the best use of the paceway site would be to put the redeveloped stadium on it."

Mr Ayres did not attend the meeting. Asked about the discrepancy, Mr Ayres told 7.30: "The Penrith Paceway is identified as the preferred site for the redeveloped Penrith Stadium by the business case that has been presented to government.

"I understand the government is currently working on an addendum to the business case to reflect changes in market conditions, community feedback and relocation costs of the Penrith Paceway to a new site.

"In order to complete this work I understand that Infrastructure NSW has started commercial negotiations with the Penrith Paceway management.

"I also understand that until this work is completed no site or final investment decision will be made."

He said while there was no doubt of his "strong advocacy" for a new stadium as the member for Penrith, he added: "I was not the sports minister when the government chose Penrith as the location for the outer Western Sydney Stadium nor was I a member of the sub-committee of cabinet that made the decision."

A spokeswoman from Infrastructure NSW said "it is standard practice for meeting minutes to go through a review process".

Final costs in doubt

The final cost of the new stadium is likely to be more than the government's budgeted estimates. While the government initially slated it for $309 million, the documents suggest costs could increase to acquire the paceway.

During the paceway's meeting with Infrastructure NSW on May 26, an agency official is recorded as telling the paceway: "Can't speak on behalf of government but if no change to the budget or the site, we commence the project asap after the 2022 footy season."

He is then recorded as noting: "If decision is to move to the paceway site, then we need to secure the land and would need additional budget and a different scope – that requires government approval."

Shadow sport minister Julia Finn told 7.30 the acquisition and relocation costs for the paceway and the businesses it has on site would be a "hugely costly" exercise.

"It makes a great announcement prior to an election ... But it's a huge cost to a lot of other people," she said.

The Perrottet government now appears to be walking back from these stadium plans. 

On September 1, current Sports Minister Alister Henskens told budget estimates that the government was still consulting on a range of options for the stadium redevelopment.

In a statement he told 7.30: "The cost and timing of construction for a new stadium will be confirmed once the consultation is completed and the scope for the new Penrith Stadium has been determined."

An Infrastructure NSW spokeswoman said: "The NSW government will consider a new addendum to the business case over the coming months."

But the acquisition process remains ongoing. The paceway now has four months to negotiate, before the government can move to acquire their land.

Ms Greentree says she remains hopeful the paceway can survive.

"We have to keep fighting, this place is worth it," she said. 

"It's worth every fight in every breath that we've got to keep going." 

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