The Fremantle Society has sought advice from a range of professionals regarding the Business Plan. We commissioned a licensed practising valuer to assess key aspects of the plan. The valuations of the properties are not the key elements of what is important, though one major developer told The Fremantle Society on two occasions that Fremantle Council was selling $50 million worth of assets for $29 million.
Amomg the key issues are the financial assumptions. We sent you our concerns in an article which quotes the licensed valuer, but not one councillor responded. To date, it seems not a single Councillor has sought independent advice to better understand the nature of these concerns. Referring questions about these issues back to the Mayor and City of Fremantle staff does not constitute independent advice.
As councillors you know that you have a fiduciary duty to ensure that you are properly informed to make a decision on this matter. Ignorance is and will be no excuse or defence in the future for the consequences of your decision if we pursue these issues through legal means if necessary.
Ten Things You Need to Know about the King’s Square Business Plan
1) While it is essential to do everything possible to get the 1250 Department of Housing workers to Fremantle, they do not have to be in a civic space like King’s Square. Kings Square should be used predominantly for civic, retail and residential purposes, with some commercial.
2) The financial assumption in the Business Plan that the new $47 million administration building will increase to $97 million in 20 years for the building alone is ‘absurd’ according to the licensed practising valuer commissioned by the Fremantle Society. It is totally illogical to say that the current administration building has zero value but that a new one will more than double in value in just 20 years to $97.7 million because it is promised to be a better built building. It is our understanding that NO single councillor has sought independent expert advice on that issue, and they should before voting.
3) The false assumption for the new building destroys the 6% claimed NPV, making it negative, and therefore NOT allowing council to borrow funds for it.
4) Council is selling the 850 car bay Queensgate for $16 million and then intends spending $15 million building a 400 car bay car park on the ‘sacred’ community site known as the Stan Reilly site. That is an unsustainable use of ratepayer funds.
5) Queensgate was earning $1,471,829 in rent in 2010 despite vacancies and some use of the building by council. The valuation of the building in 2012 was $15.9 and should have been sold then instead of emptying the building of tenants and waiting until Sirona was ready to purchase, meaning that when lost rent is taken into account and deducted from the heavily discounted sale figure of $6.3 million, ratepayers will be getting almost NOTHING for one of their prime assets.
6) Building a new administration building for the mayor, councillors and staff, along with an underground library the staff do not want, destroys half of King’s Square and prevents Fremantle getting a true civic square for the future as recommended by experts such as Ruth Durack and the Urban Design Centre using Geoffrey London, Adrian Fini, Richard Weller, Dominic Snellgrove, Patric de Villiers, and supported by others such as Ian Molyneux, Robert Campbell, Linley Lutton, and the Fremantle Society. If a new administration building is needed it does not have to be in the same location.
7) The designs proposed for Myer and Queensgate, which include building up to 7 storeys on part of the Queensgate site, not 6 as the mayor states, bring a Claremont Quarter style large box development to the heart of Fremantle which is foreign to and damaging of the heritage of the area.
8. The King’s Square Business Plan has so far failed to keep Myer and revitalise the city centre as proposed and the ratepayer is subsidising the developer Sirona, so the plan should not be extended but let lapse so that further negotiations can take place that do not keep having the ratepayer subsidising the developer.
9. There is no urgency to extend the plan yet again, because the extensions are simply more financial loss for the ratepayer and if the refusal to extend by Council triggers the purchase of the property by Sirona at least the $29 million will be available sooner rather than later.
10. If the plan is not extended but let lapse, council is in a position of strength to renegotiate a new deal which might exclude the necessity for example of Sirona building the administration building, a project the ratepayers cannot afford and which will do little to revitalise King’s Square except further damage the value of the civic square. Have the councillors satisfied themselves there are enough funds available to ensure a new administration building of the promised excellence, which has already gone up from $45 million cost to an estimate a couple of years ago of $52 million?
Besides commissioning a licensed practising valuer we commissioned a report on King’s Square which was part of our submission to the Premier when we met with him last week. They are attached.
(copies of those presentations can be obtained by writing to the Fremantle Society. We also presented a 37 page report to the Premier when we met him last week).
The Fremantle Society
24 April, 2016
ps The photograph below shows the Claremont Quarter type box that will dominate the heritage civic centre of Fremantle, and the new administration building for the mayor, councillors, and staff to replace their existing one, which will further reduce King’s Square to King’s Triangle.