FREMANTLE council won’t be giving up its assets in a fire sale and will only sell them if it gets a “reasonable price”, says mayor Brad Pettitt.
The heritage-listed Victoria Hall, a childcare centre, a depot site and fleet vehicles have been identified for sale in the 2018-2019 budget.
In addition to the $2 million projected loss on the sale of Victoria Hall, the budget papers reveal the other properties are being sold for between 50 and 75 per cent of their net book value.
The Knutsford Street Depot site has a net book value of $9.85m, but the budget estimates it would sell for $5m – a loss of roughly $4.85m.
And selling the childcare centre at 9-15 Quarry Street would result in an estimated lose of about $4.7m.
Total losses from key asset sales are projected to be about $12.74m, irking the Fremantle Society.
In July president John Dowson emailed society members, “it is alarming to see that council aim to sell a raft of ratepayer assets for a projected LOSS of $12m in the next few months”.
Mr Dowson quotes a third-party, senior accountant who criticises the city’s financial situation and practices: “Just looked at the council finance documents. Yep, trend to sell off properties continues and to borrow additional funds…I think originally it was to borrow $15m and has now increased to $20m.”
However, Dr Pettitt told the Herald the budget figures were subject to change and the assets identified were “a surplus to the city’s requirements”.
“The only way to get a true valuation of an asset is to put it to on the market,” he said.
“If the going market rate is below the city’s expectations we don’t have to sell.
“On the flipside, the market could be prepared to pay more than anticipated.
“The bottom line is the council won’t sell assets unless we can get a reasonable price for them.”
The mayor noted that selling the assets would help to revitalise the city’s economy.
“We not only generate income that we can invest in things that the city actually does need, it also unlocks the opportunity for someone else to come in and redevelop them,” he said.
The council’s business director Glen Dougall said the city’s assets were independently valued every three years, but he believes the last valuation in 2017 was overly generous. Mr Dougall says the council taking a more conservative estimate on what it would sell the buildings for had the effect of inflating the projected losses.
by WADE ZAGLAS