Meeting Notice and Agenda
An Ordinary Meeting of the Bega Valley Shire Council will be held at Council Chambers, Biamanga Room Bega Valley Commemorative Civic Centre
In accordance with the resolution of Council 20 September 2017, this section of the agenda will be chaired by the Mayor.
S.1 Sale of 142-144 Imlay Street, Eden (former Hotel Australasia)................................................ 4
8 August 2018
S.1 Sale of 142-144 Imlay Street, Eden (former Hotel Australasia)........................... 4
Council 8 August 2018
This report is presented to Council to confirm its position on the sale of 142-144 Imlay Street, Eden (former Hotel Australasia).
1. That Council accept email correspondence from Irisha Pty Ltd and Rubycove Pty Ltd legal representatives, outlining they will not be proceeding with the purchase of the Australasia (142-144 Imlay Street, Eden).
2. That Council officers engage a third party Agent to provide a detailed marketing plan to Council including costings, related to commissions and expected expenses, and report back to Council at the earliest practical Ordinary Meeting of Council.
Officers have been formally advised by the legal representatives of Irisha Pty Ltd and Rubycove Pty Ltd, they would not be proceeding with the purchase of 142-144 Imlay Street, Eden (former Hotel Australasia).
On Monday 30 July 2018, a Media Statement was released by Council advising the community of this information. Since that time there has been considerable community discussion about the matter. Officers believe it is in the public interest for Council to confirm its position in relation to the sale of this property.
Further, a representative of Irisha Pty Ltd and Rubycove Pty Ltd has since made contact with the Mayor, (after their legal representatives advice was received) seeking to restart negotiations in regard to the sale. This would place Council in a difficult situation having already acted on the formal advice provided by the legal representatives of Irisha Pty Ltd and Rubycove Pty Ltd.
The most recent Resolution of Council in relation to the sale of 142-144 Imlay Street, Eden was at the Ordinary Meeting of Council on 23 May 2018, where Council unanimously resolved:
“1. That Council enter into the Contract for Sale and Side Deed with Irisha Pty Ltd and Rubycove Pty Ltd for the sale of Lot 14 DP 250841 at 142-144 Imlay Street, Eden (the former Hotel Australasia).
2. That the General Manager and Mayor be authorised to execute the Contract for Sale and Side Deed, and all related instruments and documents contemplated in the Contract for Sale and Side Deed.
3. That Council authorise the General Manager to complete all other actions as required to implement the matters contemplated in the Contract for Sale and Side Deed.
4. That Council release the contract for sale as a public document as soon as possible
In relation to tenders, Council at its Ordinary Meeting of the 31 January 2018, resolved:
1. That Council resolve to decline to accept all tenders.
2. That Council decline to invite fresh tenders or applications on the basis that there are reasonable prospects of being able to negotiate a contract with the highest ranked tenderer in relation to the subject matter of the tender and the only other tender that was submitted does not meet any of the prescribed requirements.
3. That Council resolve to enter into negotiations with Irisha Pty Ltd and Rubycove Pty Ltd, with a view to entering into a contract and side deed for the sale of 142-144 Imlay Street, Eden (the former Hotel Australasia) on the basis that the financial capacity of the company to deliver the project within the required timeframes are met and there are reasonable prospects of being able to negotiate a contract and side deed which meet all the requirements of the contract and side deed (the subject matter of the tender).
As such there are currently no “live” tenders to revisit. The Local Government Regulations (Tendering Guidelines for NSW Local Government – October 2009) are very clear on the process for accepting, declining and negotiating during and after a tender process. These Guidelines have been followed to date. However, the Guidelines don’t specifically address the issue and Council now needs to look at what options are available, if negotiations do not produce a result. This is because once all tenders have been rejected, the tendering process is over and Council is now in a separate process of direct negotiation.
Whilst there have been a number of Council Resolutions about this matter, the Resolution at the Ordinary Meeting of Council on 2 November 2016 provides direction in relation to queries raised in the community about Council undertaking works on the building. Council resolved:
1. That Council hold a further Expression of Interest process for private development of the Hotel Australasia maintaining the laneway in public ownership and requiring the heritage restoration of the Imlay Street frontage. Further that no physical works commence on site until such time as Council has resolved its position on the outcome of the Expression of Interest process.
2. That Eden’s Australia Inc. be asked to continue to fundraise towards the restoration of the façade, until such time that the expression of interest is resolved.
The outcome of the expression of interest process was determined by Council at its Ordinary Meeting on 14 December 2016. Council resolved:
1. That Council note the EOI process has closed.
2. That Council explore the subdivision of the car park space and laneway and review toilet infrastructure.
3. That Council proceed to an open tender process
Following this Resolution, tender documentation was developed and released to the market, which importantly included conditions for the restoration of the façade and the maintaining the laneway access.
Council has the following options available to it:
1. Continue to proceed with the sale of the property. The sale could be undertaken:
a. By tender process managed by Council officers. This would potentially limit the funds paid to third parties, but is likely to postpone other planned and budgeted activities.
b. By engaging a third party Agent working on Council’s behalf to market the property.
A further report to Council would be required to finalise the details of the sale conditions and detailed approach.
2. Enter into further negotiations with Irisha Pty Ltd and Rubycove Pty Ltd.
A representative of Irisha Pty Ltd and Rubycove Pty Ltd has contacted the Mayor on 3 August 2018 indicating they would like to retract their legal advice to Council that they have withdrawn from the purchase of 142-144 Imlay Street, Eden. Council officers have sought advice on the legalities of these negotiations being reopened.
3. Maintain ownership of the property.
Maintaining ownership of the property will require the identification of funds to undertake necessary works on the building and ongoing maintenance and operational budgets. A revised Business Plan on the use of the building and community engagement would also be required.
4. Other options, as raised and resolved by Councillors.
Following notification of the advice regarding the sale, a Media Statement was released to inform the community of the latest development in the sale process.
Financial and resource considerations
All options will have additional financial and resource implications. To date officers have not had time to explore the implications in detail, and this will occur following direction of Council being resolved on the adopted approach.
Sale options will include additional officers' time and resources as well as the possible engagement of third parties, advertising, marketing, and legal costs.
Re-entering into negotiations with Irisha Pty Ltd and Rubycove Pty Ltd will also involve additional legal fees and officers' time and resources.
To maintain ownership will require Business Plan preparation, officers' time and resources, capital expenditure and ongoing operational and maintenance budgets to be sourced. This option may result in an income stream being generated in the future depending on usage.
Under the Local Government Act 1993 (the Act), there is no restraint on Council’s ability to sell or otherwise dispose of land classified as Operational Land. Section 377(1)(h) of the Act requires a specific Resolution of Council to dispose of any land.
Impacts on Strategic/Operational/Asset Management Plan/Risk
Outcome 4: Liveable Places; Goal 8: Our places retain their character and scale, development is well planned, and a range of goods and services are available within out Shire that meets local needs.
In determining its direction, Council should consider a number of risks associated with this matter including but not limited to:
· Reputational risk in relation to the length of time taken on this matter; and the community's view on how Council is handling the matter;
· Financial risk in relation to the ongoing liabilities related to building management whilst in Council ownership; the cost of undertaking the sale process; and future costs to undertake major works, should the building stay in Council ownership;
· Risk in relation to the sale to a vendor who may or may not have the capacity and/or capability to complete the project; and the building remaining in a state of disrepair into the foreseeable future;
These risks are inherent in the project, but can be mitigated by making timely decisions.
1⇨. Contract for Sale - 142-144 Imlay St, Eden (Councillor Only)
2⇨. Side Deed to Contract for Sale - 142-144 Imlay St, Eden (Councillor Only)
3⇨. Advice from purchaser lawyers - 26072018 (Councillor Only)