The actions of the council are very wrong in my opinion. Truly appalling. However, I bet they could make a case that, by selling the land to a tax-paying entity, they are serving the public good. Now they can either provide more services, or lower taxes for the public. Isn't that peachy?
My opinion is that eminent domain done for "the public good" is just like everything else done for "the public good": a very bad idea. Property Rights are property rights.
Acting for the public good is what tyrants always claim to be doing.
The prospect of a tax base against a mega story skycraper versus a tax exempt church will be too much for liberal land thief politicians to ignore.