Ordinary

Supplementary Agenda

DECLASSIFIED REPORT Providing a copy of the declassified report presented to Closed Session on 12 June 2013, following declassification of that report on 3 July 2013.

11 July 2013

 

TO:

Cr Bill Taylor, Mayor

Cr Russell Fitzpatrick, Deputy Mayor

Cr Tony Allen

Cr Michael Britten

Cr Keith Hughes

Cr Ann Mawhinney

Cr Kristy McBain

Cr Liz Seckold

Cr Sharon Tapscott

COPY:

General Manager, Mr Peter Tegart

Group Manager Infrastructure, Waste and Water, Mr Wayne Sartori

Group Manager Planning and Environment, Mr Andrew Woodley

Group Manager Community and Relationships, Ms Leanne Barnes

Minute Secretary

 

 

 


Council                                                                                                                  3 July 2013

 

Supplementary AGENDA 

10   Staff Reports – Enterprising

10.2             Declassified Report - Merimbula Lands - Redevelopment option...........

 

 

 

 


Council 3 July 2013                                                                                           Item 10.2

 

10.2.       Declassified Report - Merimbula Lands - Redevelopment option     

 

Providing a copy of the declassified report presented to Closed Session on 12 June 2013, following declassification of that report on 3 July 2013.

20.1             Merimbula Lands – Redevelopment option

 

Presenting report on opportunity to purchase Tura Tavern at auction, for potential redevelopment as branch library, gallery, after school care and community rooms.

 

General Manager   

 

Background

Councillors have been briefed on the opportunity to potentially acquire the Tura Tavern (lot 154/DP746134, lot 157/811012: 3576m2) held by Tura Pty Limited (Receivers and Managers appointed as company in Liquidation), that is subject to auction on 13 June in Sydney, for its reuse as a public facility such as branch library, gallery, after school care and community rooms for example.

The property (constructed in 2006 by DA2004/0679) is offered for sale as mortgagee in possession, with estimates provided through the agent of $1.1m. The property comprises bar, lounge, café/restaurant, commercial kitchen, play room, service areas, amenities (including disabled toilets), lift, offices, cellar/storage, delivery dock and onsite parking for 30 vehicles, in addition to disabled and staff parking. The property has security and is air conditioned.

It also has a 3 bedroom and study two storey brick residence, and carries 4 gaming entitlements estimated at $330k. While hotel trading information is available, it has not been taken into account.

A valuation of the  tavern, as well as the residence (should it be considered for subdivision and subsequent sale) has been sought and should be available at the meeting. Floor plans and contract are attached and photographs available at the meeting.

ISSUES

Strategic

The property is all in one holding including the dwelling, is currently Zoned 3(a) Business (LEP 2002) and proposed B1 Neighbourhood Centre with a 10m height limit.

That zone permits: Home businesses; Home industries; Home occupations; Boarding houses; Business premises; Child care centres; Medical centres; Neighbourhood shops; Office premises; Respite day care centres; Shop top housing.

 Asset

Should Council acquire the property, it should be noted no staff assessment has been undertaken of its condition, nor has its maintenance and renewal been accounted in an AMP. However, as the property is under 7 years old, maintenance costs should be initially minimal. A building report has been requested of the agent.

With regard to the following floor areas, some internal modifications may be required to convert the property to the proposed uses:

Current use

NFA*

Proposed use

Tavern, games

325m2

Library space

Restaurant

165m2

Exhibition/community space

Games, outdoor landscaped

100m2

Childrens play/after school care

Storage (x2) each

100m2

Gallery/records storage

 

The furniture (comprising tables, chairs, piano etc) may be reused in community halls, while the children’s play room and equipment may be used for library or after school care. The sale also comprises some electronic equipment and plant, as well as a coaster bus, that may be reused or sold.

The current library furniture and collection would move across to the new venue.

Council may wish to also contemplate reusing the quality commercial kitchen equipment and bar cabinetry in the Bega Civic Centre, and styling the kitchen and bar  in the Centre to accommodate that equipment.

The dwelling may be considered for retention as office space, business incubator, affordable housing or crisis accommodation, leased and operated by a third party NGO or NFP, or sold (all subject to relevant zoning and consents). The garage (converted into offices) requires consent.

Social / Cultural

The Merimbula branch library is housed in leasehold premises in Market Street at $65k/year, occupying an area of 250m2. Council has considered other options to sell the former library site in Main Street, using the proceeds for construction of a new library and meeting rooms, or considering a joint venture with a developer of that site or another site in the CBD to include a library under strata arrangements for example.

NSW State Library suggests an area of 500m2 is appropriate for a population of Merimbula and environs, and that a branch should be sited in a population centre with access to commercial and community amenities. The tavern site is near aged care accommodation, country club and shopping complex.

Financial

While no funds have been provided in the budget to acquire the Tavern, the LTFP provides $1.5m for the development of a new Merimbula library in 2013/14 (loan funded), while $2m was expected to be yielded from the sale or development of the former Main Street library site (see attached).

Subject to the valuation advice, should the Tavern be acquired at say $1.1m, ( P&I @ $140k pa;  IO @ $55k pa over 10 years), and then gaming licences be sold at say $330k, the servicing of the remaining debt of say $800k over 10 years (allowing for internal modifications) would be ~$100k/year – an increase of $35k above the current rent for the leased library space of 250m2.

In addition, should council not consider utilising the dwelling for affordable or emergency housing, it could be subdivided and sold, reducing the debt by a further $350k, with an annual servicing cost of ~$56k.

Grants could be sought from the State Library in the 2013/2014 Country Libraries Fund for  $200k, while an additional $45k would come from the Local Priorities Grant for specific projects. In addition, Revitalising Regional Libraries grants $16k every two years and Council is slated to receive funds in 2014.

 

Funding source

 

Amount

Loan (nett) – serviced from library vote @ $100k/yr

$

$800k

Legal

Should Council acquire the property, there are a number of matters to be attended, including the gaming entitlements, poker machines and transfer of liquor licence. It is understood a number of items in the inventory are subject to licence or lease, and consequently subject to notification or recovery of those items by those third parties.

Operational Plan

L7.2.1 Optimise Bega library and branch libraries to provide services and spaces for children, young people, students and older people and develop as a learning centres.

Conclusion

On balance, the acquisition of Tura Tavern, at the (understood) mortgage value of $1.1m presents as good value for its reuse as library and community purposes – particularly as $1.5m was allowed for development of a new library, albeit in Merimbula CBD. It is even better value should the gambling entitlements and/or dwelling be sold, and fixtures and fittings be reused in other halls, including the Bega Civic Centre.

 

ATTACHMENTS

Nil

 

Recommendation

1.         That the General Manager be authorised to bid at auction up to the amount             contained in the valuation report, for the acquisition of the Tura Tavern property,             being lot 154/DP746134, lot 157/811012.

2.         If successful at auction, the General Manager be authorised to execute the             contract at time of sale, for co-signing by the Mayor.

3.         If acquired, the property be classified as operational land.

 

RESOLUTION FROM THE CLOSED MINUTES 12 jUNE 2013

20.1

Merimbula Lands - Redevelopment option

1/13

RESOLVED on the motion of Crs Britten and McBain

1.         That the General Manager be authorised to bid at auction or negotiate in private treaty up to the amount of $1.5 million, for the acquisition of the Tura Tavern property, being lot Lot 158 / DP 1140729.

2.         If successful at auction, the General Manager be authorised to execute the contract at time of sale, for co-signing by the Mayor with associated documents executed             under Council seal.

3.         If acquired, the property be classified as operational land.

In favour:        Crs Taylor, McBain, Hughes, Tapscott, Seckold, Mawhinney, Fitzpatrick and Britten

Against:            Nil

Abstained:       Cr Allen