Samson Rec to pay for new HQ

FREMANTLE city council will have to sell the Samson Recreation Centre and Fremantle Leisure Centre carpark to help pay for its new Kings Square HQ.

The council may also have to raise rates to help cover a medium-term revenue shortfall the Herald has discovered during an investigation into the Kings Square business plan and long-term financial plan.

Council corporate services chief Glen Dougall says “future councils may decide to increase rates by a small amount … or apply funds from the sale of other assets” in order to service the $15 million debt the council will accrue as a result of the project.

But the Herald has discovered the council has already factored in the sale of both the centre for $5.5m and the carpark for $5m in its long-term financial plan.

$1.3m shortfall

The sales are slated for the 2017/18 financial year, but with the Kings Square development behind schedule are likely to be delayed. The sales are not revealed in the business plan.

Selling the Queensgate centre and two carparks to pay for its share of the Kings Square redevelopment will see the council forego $1.8 million in parking fees and rent every year. That will instead flow to development partner Sirona.

New offices and shops in the rebuilt HQ will bring in rent, but that will service the debt for about a decade. A new 400-bay car park the council is planning for the old Stan Reilly site will provide some revenue when built by 2018 but that also involves a multi-million dollar loan the council will have to raise and service.

The long-term plan shows the council’s annual interest payments over the next decade will nearly quadruple from current levels of about $480,000 to $1.73m in 2020 before dropping back to about $1.3m in 2025.

With increased rates already taken into account and no additional revenue streams outlined in the long-term business plan, that leaves the council $1.3m worse off over the medium-term.

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• An artist’s impression of how the new Fremantle council HQ will look. File image | supplied

The Herald pestered the council for days to reveal how it intends making up the shortfall, at first getting a rebuff from flak-catcher Jason Cunningham who blamed the silence on Willagee Labor MP Peter Tinley’s questions to parliament (“King concerns,” Herald, March 28, 2015).

“We have all agreed that until the minister has formally responded it is not appropriate to consider going through the plan in detail with the media,” Mr Cunningham emailed.

When the Herald pointed out that seemed spurious given the council had drafted a Thinking Allowed on the topic (see page 7), the council relented.

Apart from the projected rates increases and asset sales, Mr Dougall says a revitalised square is expected to generate more revenue.

“There will also be an organic uplift in rates that will occur as properties in Fremantle, including those as part of the Kings Square project, are developed and improved in the Fremantle CBD which will help to further reduce this gap,” he says.

“As the business plan notes, the impact on the city’s overall financial position is relatively minor.”

Hilton ward councillor Sam Wainwright, whose bailiwick covers Samson, says he hadn’t noticed the recreation centre’s sale in the long-term plan, but reckons it’s speculative at this stage.

“There have been some informal discussions about the long-term future of the site,” Cr Wainwright told the Herald.

“It gets huge usage as a regional facility, but doesn’t really function as the local community centre that the suburb needs and deserves.

“There is also a tract of vacant land to its south which could be sold to raise funds.”

Cr Wainwright says when the business plan was approved by council, he’d moved a motion that shortfalls should be covered by drawing on reserves so ratepayers wouldn’t be hit with huge rates increases.


14 COF Plastic Bag 20x3 14 COF Samson Rec 15x3 14 COF Meeting Place 10x7

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