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2018-08-31 Special Meeting Agenda
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AGENDA
Special Meeting
Friday, 31 August 2018
commencing at 11.30am
Council Chambers, 9 Pelican Street, Tewantin
Committee: Crs Tony Wellington (Chair), Jess Glasgow, Ingrid Jackson,
Joe Jurisevic, Frank Pardon, Brian Stockwell, Frank Wilkie
“Noosa Shire – different by nature”
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Section 2
SPECIAL MEETING AGENDA 31 AUGUST 2018
TABLE OF CONTENTS
ITEM PAGE
ATTENDANCE & APOLOGIES -
REPORTS
1 INVESTIGATION ON POTENTIAL USES 24 COOROY NOOSA ROAD, TEWANTIN -
LOT 375 SP151415 (FORMER TEWANTIN TAFE SITE) 3
MEETING CLOSURE -
Page 2 of 25
Section 3
SPECIAL MEETING AGENDA 31 AUGUST 2018
1 INVESTIGATION ON POTENTIAL USES 24 COOROY NOOSA ROAD, TEWANTIN - LOT
375 SP151415 (FORMER TEWANTIN TAFE SITE)
Document i nformati on
Authors Director Corporate Services, Michael Shave
Project Officer, David Thomas
Corporate Services Department
Index ECM/ Property/ 24 Cooroy Noosa Road
Attachments 1. Koala Habitat Overlay
2. Bushfire Hazard Areas Overlay
3. Financial Assumptions and Outputs
EXECUTIVE SUMMARY
Not applicable.
RECOMMENDATION
That Council note the report by the Director Corporate Services and Project Officer to the Special
Meeting dated 31 August 2018 regarding potential uses for the former Tewantin TAFE site located
at 24 Cooroy Noosa Road, Tewantin and agree for Council staff to continue negotiations with the
Queensland Government regarding the future of the site.
REPORT
Background
In February 2002 the Queensland Government (the state) gave notice of the designation of land
situated at 24 Cooroy Noosa Road, Tewantin for the purposes of “community infrastructure –
education facilities”. The designation was at the time made under section 2.6.1(1) of the Integrated
Planning Act 1997 (the Act). Section 2.6.11 of the Act also required Council to note the designation
on its planning scheme.
In 2004 a purpose built Technical and Further Education (TAFE) campus was constructed on the
site. The land comprises 11.04 hectares with approximately 1.56 hectares utilised for the campus
footprint. The remaining 9.48 hectares of land area is heavily vegetated with much of it considered
to have high biodiversity environmental value.
As the site was subject to a Ministerial designation for “community infrastructure – education
facilities”, no development application was required for the TAFE. Ministerial designations will
ordinarily lapse after six years unless extended. It is understood that the Ministerial designation for
community infrastructure on this site has lapsed and therefore the land is subject to the Noosa
Planning Scheme.
Page 3 of 25
Section 4
SPECIAL MEETING AGENDA 31 AUGUST 2018
An aerial view of the site is provided for information below.
The site is situated opposite the Noosa Outlook residential estate roundabout and is surrounded
by the Tewantin Noosa Golf Club, Tewantin Cemetery and the Tewantin Sports Complex. There
is some minor encroachment by the Golf Club driving range on the western side of the property.
The buildings on the site are set well back from the road frontage, surrounded by dense vegetation
and are accessed by a bitumen sealed driveway.
The facility had student intake from 2006 and operated for approximately 8 years until it was closed
in June 2014 following a TAFE Queensland review. The facility has remained closed since that
time. A decision on the site’s future was to be made following the completion of a ten year Strategic
Training Asset Management Plan by the state.
The Department of Employment, Small Business and Training made contact with Council in March
2018 to discuss whether Council had any interest in purchasing the site. Since then, information
has been obtained and developed as part of Council’s due diligence investigations in the following
areas:
1. Site infrastructure;
2. Site planning, land use options and environmental considerations;
3. Building condition assessment;
4. Potential site demand (commercial and community); and
5. Financial analysis and whole of life cost implications.
This information is important to ensure that Council makes appropriate decisions in the best
interests of its ratepayers and the community. Any decision must also align with Council’s Financial
Sustainability Policy.
Page 4 of 25
Section 5
SPECIAL MEETING AGENDA 31 AUGUST 2018
Site Infrastructure
The former TAFE facility comprises 4 main buildings (blocks A through D) linked via covered areas
and walkways, a work shed, with the facility supported by onsite road and water / wastewater
infrastructure. Vehicle access is available via a boom gate at the Cooroy Noosa Road frontage and
a bitumen sealed driveway (with 95 car parks on site). An aerial view of the current building footprint
is provided below for information.
The net floor space of the 4 main buildings is approximately 1,822m2. A breakdown of floor space
for each building and common areas is provided below.
Asset Description Floor Area
Block A 7 classrooms / meeting rooms 337m²
Block B 3 classrooms / meeting rooms / 3 studios 1,045m²
Block C: Administration building / library 395m²
Block D: Workshop / maintenance building 45m²
Covered Areas Walkways / shed 638m²
Total Area 2,460m²
Page 5 of 25
Section 6
SPECIAL MEETING AGENDA 31 AUGUST 2018
Site Planning and Environmental Considerations
Noosa Plan 2006
The site is located in the Tewantin and Doonan Locality and is included in the Community Services
Zone. The land to the east containing the Tewantin Cemetery is also included in the Community
Services Zone, with a small portion to the north being included in the Open Space Conservation
Zone. The land currently enjoys existing use rights for an educational establishment, to the extent
that is was developed for the purposes of a TAFE.
The Tewantin and Doonan Locality assessment table identifies the following code and impact
assessable uses noted against the “Community” use zone.
Use Assessment Comment
Level
Commercial Code Type 2 Medical (use of premises for the practice of human
medicine and therapies).
Type 3 Veterinary (use of premises for the treatment of sick or
injured animals).
Entertainment & dining business Type 1 (the use of premises
involving the sale of food and beverage for consumption on the
premises for 10 or more people) where in conjunction with a
community use.
Impact Commercial business type 1, entertainment and dining business
(if not otherwise code assessment).
Home based business, industrial business, retail business.
Community Code Education Type 4 Information (the use of premises for the
collection and display of information for reference or reflection
including a library, museum and information centre).
Emergency Service (any use conducted by a state or local
authority for the purposes of protecting the community and
responding to emergency situations).
Open Space Type 1 Sport and Recreation (The use of premises
for sports or active recreation in a formal outdoor setting,
accessible by the public).
Wellbeing Type 2 Social (The use of premises for the gathering of
people for networking, support, common pastimes, exercise,
charitable work or companionship).
Impact Education Types 1 (Childcare) , 2 (School) or 3 (Adult).
Open Space Type 2 (Camp Ground).
Wellbeing Types 1 (Health), 3 (Worship) or Type 4 (Funeral).
Infrastructure Code Service and utility Type 1 Depot (the use of premises for a depot
or station for conduct of the daily business of a local government,
State government, statutory authority or telecommunications
company, in supplying a public service or utilities).
Type 2 installation (the use of premises for a structure or
installation as part of a network where other administrative
functions are not conducted on the same site).
Type 4 Treatment, Recycling and Disposal (the use of premises
for the treatment of water for municipal supply or the treatment,
recycling and disposal of wastewater or solid materials).
Transport Type 1 Passenger Terminal (the use of premises, by the
travelling public, as an air, rail, water or road transport passenger
terminal, station or interchange).
Page 6 of 25
Section 7
SPECIAL MEETING AGENDA 31 AUGUST 2018
Use Assessment Comment
Level
Type 2 Carpark (the use of premises for the parking of motor
vehicles where such parking is not ancillary to another uses on the
same site).
Type 3 Depot (the use of premises for the storing and routine
maintenance of commercial or passenger motor vehicles).
Impact Service and utility Type 3 (Tower).
Transport Type 4 (Aeronautical).
Residential Code Ancillary dwelling unit (The use of premises for a caretaker’s
residence or employee residence associated with a non-
residential use on the same premises).
Impact Detached House, Community Residence, Multiple housing Types,
2 (Duplex) 3 (Retirement or Special Needs), 4 (Conventional) or 5
(Relocatable); or Visitor Accommodation.
Environmental Considerations
The site is identified by the Noosa Plan’s biodiversity overlay as containing vegetation worthy of
environmental protection due to its remnant status (refer map below) and its endangered
classification under the Vegetation Management Act 1999. The vegetation on the western portion
of the site contains ‘endangered’ vegetation’ with a wallum wetland area and the eastern portion
of the site is considered ‘least concern’ vegetation, mainly due to a change in land zone.
The site is also mapped as containing koala habitat area under the biodiversity overlay (refer
attachment 1). The site is mapped under the Nature Conservation Act 1992 as high risk for
protected plant species. High risk areas represent areas where endangered, vulnerable or near
threatened plants are known or likely to exist. Any clearing in a high risk area may require a flora
survey and / or a clearing permit from the state. A recent site inspection confirmed the presence of
endangered vegetation ecosystem over the majority of the site (excluding the TAFE footprint and
golf course encroachment to the west).
The natural hazard overlay identifies the site as medium to high potential bushfire intensity (refer
attachment 2), and being in a low potential acid sulfate area. The site contains regulated
vegetation including endangered regional ecosystem and of concern regional ecosystem.
The site is mapped as essential habitat for the following species.
Species Comment
Koala Site has been identified as containing Koala habitat, however it is not
designated as either Koala assessable development area or a priority
Koala assessable development area under state mapping
Koalas are observed in the adjacent sports grounds and golf course and
are likely to frequent the site
Wallum rocketfrog The site contains habitat for Wallum Rocketfrog.
Any habitat disturbance / removal would require assessment and any
impact offset in accordance with Queensland Environment Offset policy
Glossy black cockatoo The site contains habitat to support the Glossy Black Cockatoo
Any habitat disturbance / removal would require assessment and any
impact offset in accordance with Queensland Environment Offset policy
Note: The site is also likely to contain swamp crayfish habitat.
Page 7 of 25
Section 8
SPECIAL MEETING AGENDA 31 AUGUST 2018
State Government mapping extract showing Endangered Vegetation (pink), Least Concern vegetation (green) and
habitat (hatched areas) for Koalas (860), Glossy Black Cockatoo (1171) and Wallum Rocketfrog (609)
Any potential development of the site that results in vegetation clearing may require referral to the
state for assessment and could result in vegetation offset requirements including replanting or
monetary payment.
Facility condition assessment
BDR Projects Pty Ltd (BDR) were commissioned by Council to undertake a building condition and
compliance assessment of the site. Included within the scope of works was an assessment of the
following building components:
Superstructure;
Substructure;
Roof;
Flooring;
Fit out & Fittings;
Heating, Ventilation and Air Conditioning (HVAC);
Fire & Security;
Electrical Services;
Hydraulic and Plumbing; and
Lighting.
The assessment was recently completed, with assessments based on visual inspections of
accessible areas. The assessment consideration assumed reinstating the buildings to their current
designed use, however did not include or assess any fundamental change in use requiring
structural changes or alterations. The consultant concluded that the buildings on the site are
generally in good condition and are building code compliant. The table below provides a summary
by BDR of the building condition and compliance assessment.
Page 8 of 25
Section 9
SPECIAL MEETING AGENDA 31 AUGUST 2018
Assessment Type Overall Assessment Comments
Building Condition Buildings are generally Overall structures, including superstructures and
in good condition substructures are functionally sound with limited
improvements required.
Roofs and guttering are in good condition with
limited priority repairs required.
External surfaces are generally structurally sound
however exhibit deterioration, primarily due to lack
of maintenance and vandalism.
Internal surfaces are generally sound and exhibit
minor deterioration, primarily due to lack of
maintenance and vandalism.
Visible services appear functional with some minor
wear and tear deterioration. Buried and concealed
services are considered to be adequate due to age
and limited use of the facility in recent years. It is
anticipated that concealed ducting, cabling, piping
and other associated services will be in a fair to
good condition,
Several fittings and fixtures will require replacement
due to lack of maintenance, vandalism, theft,
neglect and corrosion.
Building Compliance Buildings are generally The following improvements are required for ongoing
compliant with building operational compliance and occupant safety:
code requirements Fire extinguishers are to be re-instated.
Fire hose reel maintenance tags appear to be
current, but should be checked at the time of any re-
occupancy.
Fire safety installations should be checked and
tested in accordance with Australian Standard 1851
(fire safety) requirements.
Further building compliance assessment comments
include:
Building assessment certificate of classification not
displayed as required (note Council also has no
record on file).
Contract documents indicate the Building Code of
Australia 1990 and referenced standards to be the
applicable code for compliance purposes.
All relevant new and existing glass must have visual
indicators complying with AS1428.1-2009 (design
for access and mobility).
The scope of the assessment also included the requirement to provide a detailed asset
maintenance and renewal schedule in order to understand the future likely asset cost implications
for ratepayers in the event of site purchase.
Page 9 of 25
Section 10
SPECIAL MEETING AGENDA 31 AUGUST 2018
Annual Inspection and Maintenance Program
Likely ongoing facility costs were developed on the assumption that the buildings and their relevant
components were inspected and maintained to reach the end of their estimated lives. Given the
current state of disrepair at the facility (attributable to vandalism and general deterioration due to
the site being mothballed), additional defect rectification costs of $357k were estimated to bring
the facility back up to operating standard in year 1 (i.e. 2018/19). Costs from 2020 onwards reflect
expected ongoing asset inspection and maintenance requirements for the facility arising from the
condition assessment. The graph below highlights the estimated inspection and maintenance costs
required over 10 years for the facility (totalling $1.9m including inflation).
Renewal / Replacement Program
An asset renewal / replacement forecast was also developed on the basis of the expected
remaining life of the different components of the buildings following the onsite assessment. As the
overall condition of the facility is considered good, condition based renewal works of approximately
$500k are not likely until 2023 relating to HVAC and lighting system replacements. Significant
levels of expenditure ($9 million) were estimated by the consultants in 2028 when fit out and fittings,
and fire and security systems would require replacement. For the purposes of the investigation it
was assumed that half of these costs would be smoothed into future years once actual condition
is assessed.
Page 10 of 25
Section 11
SPECIAL MEETING AGENDA 31 AUGUST 2018
Likely demand or need for the site?
Background - why did the TAFE close?
The Tewantin TAFE had a short history, opening in 2006 and then being closed by the Liberal
National Party Government in 2014. It is understood that a key driver for the closure of the Tewantin
TAFE (and a number of other TAFE facilities across the state) was asset underutilisation and an
agenda to rationalise training assets to address sector financial viability concerns at the time.
The Tewantin TAFE in particular had experienced reducing student numbers (approximately 700
down to 200). As a result, courses were transferred from Tewantin to Nambour and Mooloolaba
campuses, and upwards of 25% of the site leased at peppercorn rates making the facility unviable
for the state under the status quo. Another contributing factor was the cost of training courses being
driven down through competition with private enterprise registered training organisations
(introduced by the Australian Government), and the increasing popularity of online training through
technological innovation.
It has also been noted that the location of the Tewantin TAFE site may not have been appropriate,
particularly for undergraduate type courses, as the location is removed from social and supporting
facilities such as coffee shops etc.
Demand Investigation Undertaken
Following the approach from the state, Council’s Project Officer (former Noosa Council Director of
Business, David Thomas) has investigated what opportunities may exist within Council and the
external market for the ongoing use of the site. The investigation canvassed the need for the site
for current or future Council operations, current demand or likely need for the facility by community
groups, in addition to any likely commercial or other appetite to lease the site in an anchor role or
other financially sustainable way.
Potential Council Use
Uses for the facility that could potentially align with Council’s Corporate and Operational Plan
objectives (including adopted strategies and plans) were discussed across the various
Departments within Council. The table below outlines the potential use and comments received.
Department Use Purpose Findings
Community Social Council’s Social Strategy (page 14) has identified limited
Services demand for additional community facilities in the Shire,
and going forward there may be a need to rationalise
under-utilised facilities or those deemed to be no longer fit
for purpose to meet the changing needs of the population
Council’s Corporate Plan identifies that a key focus area
between 2017-2022 is to undertake a pre-feasibility study
for a regional art gallery building. Staff advised that the
location of the site is considered not suitable given its
isolated nature, poor visibility, lack of passing pedestrian
traffic and distance from other shire services and attractors
Cemeteries The Tewantin Cemetery has approximately 4-5 years of
capacity remaining. There is some appetite for expansion
of the cemetery onto the eastern side of the site to extend
the life of the cemetery (potentially creating a further 15-
20 years of plot life)
Planning constraints would need to be addressed
Waste Planning considerations limit any potential usage for
management waste management purposes, and the site has not been
considered with regards to waste management site
planning.
Page 11 of 25
Section 12
SPECIAL MEETING AGENDA 31 AUGUST 2018
Department Use Purpose Findings
Environment and Environment land Although the site contains endangered vegetation it has
Sustainable acquisition not been identified to date in Council’s Conservation Land
Development Guideline which identifies significant properties of interest
for purchase using Environment Levy funds
Economic As an education hub the site may have some wider
Development economic potential but that would require a substantial
paying anchor tenant and a number of sub tenants to
ensure the facility was viable for Council
Some commercial expression of interest was received
regarding potentially leasing the site should Council
purchase (although not of anchor tenant size)
Infrastructure Transport Council’s Transport Strategy implementation has recently
Services commenced. Opportunities for site use as a bus depot or
use for other transport purposes (possibly a park and ride
facility) were discussed.
It is unlikely that the site would provide a long term solution
as a secure bus storage yard or park and ride facility given
the existing carpark configuration has insufficient
hardstand space and other necessary infrastructure and
would require major rework (likely to create environmental
and planning conflicts)
Corporate Strategic land Council’s Property Branch is about to commence a
Services acquisition strategic review of Council land holding opportunities. The
project has not advanced enough to provide any advice
regarding the value or otherwise of the site as a strategic
land acquisition
Potential Community Group use
Likely community group demand for the facility was investigated within the context of any anecdotal
examples of need in addition to understanding current availability of floor space in Tewantin and
also the broader Noosa area.
Council’s Community Development and Property branches advised that there are currently no
active discussions with any group seeking tenure arrangements within a Council facility (with recent
demand considered low). With respect to the availability of floor space in Council controlled
facilities in Tewantin, spare capacity current exists in both the recently completed Tait Duke
Cottage (with Council currently seeking community group interest for a lease arrangement), and
facilities at the Tewantin Sports Complex (with a number of buildings having spare capacity during
the week).
With respect to casual space available in other local Council facilities, capacity exists in the nearby
Wallace Park estate, in particular the Noosa Leisure Centre (three meeting rooms), with meeting
rooms also becoming available for hire in the Noosaville Library once the refurbishment is
completed in November. Meeting rooms are also currently available for use free of charge at the
Cooroy Library for not-for-profit community groups
Following recent enquiries regarding the availability of commercial and other non-Council facility
floor space in Tewantin, there are a number of opportunities for free casual use of meeting space
in the new Bendigo bank building, at the RSL and also the Japara Noosa aged care facility in
Moorindil Street. Other shire wide meeting space is available for hire (for example Tewantin CWA,
Tewantin Masons, Pomona Community House, Cooran Hall, Kin Kin Hall, public school halls,
Cooroy Hall etc.)
Page 12 of 25
Section 13
SPECIAL MEETING AGENDA 31 AUGUST 2018
Potential Commercial Use
In investigating potential future commercial appetite for use of the facility, population and
demographic projections for the Tewantin Noosaville catchment were reviewed. There is a
projected minor population increase of approximately 2,000 people in the catchment over the next
10 years, characterised by a large component over 65 years of age including a statistically high
number over 80 years of age expected to require some higher level of care. This population is
currently catered for by aged care centres such as Japara, Carramar, or retirement villages such
as Hibiscus, Domain, Riverlands, or serviced in residences by in home care providers. The
Sundale aged care and retirement facility currently being constructed on McKinnon Drive will also
meet some of the future expected demand.
It should be noted that the northern end of the Sunshine Coast Council region (i.e. Peregian
Springs / Peregian Breeze/ Doonan / Lake Weyba) forms part of the broader catchment, and
growth in these areas is expected to continue to place pressure on Noosa facilities (noting that the
populations in these areas are described as having a more even age distribution than the Tewantin
Noosaville catchment).
The population and demographic projections indicate that given the size and location of the
Tewantin TAFE site, commercial appetite may exist with respect to some form of aged care /
retirement village development in the near future.
Other possible uses canvassed include the following:
Use Comment
Place of public worship Should the property be listed for sale there may be interest from churches
(i.e. church) who are attracted to purchase the site due to its location and also size (i.e.
good vegetation buffers to contain noise and large existing floor space)
A change in use for the site would likely be impact assessable under the
current Noosa plan
Aged care / retirement As mentioned above, the Tewantin/Noosaville age demographic would
village indicate demand for this type of development. It is understood that there
have been providers within the industry actively seeking sites in the area
for purchase and as a potential development opportunity
Flow-on economic benefits to the Tewantin and broader Noosa region
would likely eventuate from this use
A change in use for the site would likely be impact assessable under the
current Noosa plan
Educational facility / hub Potential education providers would include registered training
organisations (RTO’s), the Central Queensland University (CQU),
Sunshine Coast University (SCU), private and public Schools, and smaller
boutique providers (i.e. English language classes etc.)
However issues associated with the TAFE closure (i.e. public transport
perception, visibility, distance from other facilities and overall accessibility)
remain factors that may discourage the use of location as either an owner,
sole tenant or joint tenant
It is understood that site is not under consideration for future use by any of
the large education providers currently located in the shire.
Should Council purchase the site to activate for educational purposes,
competitive neutrality obligations would need to be met with respect to floor
space market pricing
Single large commercial No market sounding exercise has been undertaken by Council staff to
tenant determine any appetite for a large commercial anchor tenant role at the
site (given the site is still under state ownership and this may already be
occurring directly with the state). The design of the buildings may deter
interest, with any potential redevelopment requiring a cost benefit analysis
Page 13 of 25
Section 14
SPECIAL MEETING AGENDA 31 AUGUST 2018
Use Comment
Should Council purchase the site for this use, competitive neutrality
obligations would need to be met with respect to floor space market pricing
Based on current market square metre lease rates it is unlikely that
revenue generated would cover the costs of the site (in its current form)
Any commercial use not for educational purposes would likely result in a
change of use and be either code or impact assessable under the Noosa
plan
Mix of commercial Some interest from external groups / individuals has already been
tenants expressed to Council (which Council appreciates and acknowledges)
regarding the potential to tenant some of the existing building space for
commercial use (should Council purchase the site)
In terms of available capacity in the lease market, experienced commercial
real estate agents have indicated that the Tewantin leasing market outlook
is soft due to the retreat of banks with vacant business space now available
in the CBD. The Noosaville industrial estate market is currently firm,
however it is expected that additional floor space is about to be released
onto the market, and this is likely to attract successful businesses willing
to upscale to new larger premises leaving vacancies at the lower end of
the market. Noosa Civic turnover opportunities still exist at competitive
rates
Should Council purchase the site with a view to use for mixed commercial
use, competitive neutrality obligations would need to be met with respect
to floor space market pricing
Based on current market square metre lease rates it is unlikely that
revenue generated would cover the costs of the site (in its current form)
including ongoing maintenance and depreciation expenses
Any commercial use not for educational purposes would likely result in a
change of use and be either code or impact assessable under the Noosa
plan
Summary
The following points are relevant based on the findings from the investigation into the likely need
for the future site use.
Commercial appetite for future site use is expected to be driven by an ageing population in
the Tewantin Noosaville catchment;
Identification of existing current need for site use by Council has been limited to the south
eastern portion of the site to accommodate a potential expansion of the Tewantin cemetery
(and noting that, whilst the site contains endangered vegetation, it is not currently identified
for potential purchase from Environment Levy funds);
There may be private investment potential in the site with respect to uses for public worship,
aged care or retirement village (subject to meeting planning requirements);
It is unlikely that the site would attract any large education provider given that factors still
remain relating to the TAFE failure;
Based on the assessment of current available capacity for community space there appears
no immediate need or pressing demand to activate the site for community group use;
Securing a sole tenant or a mix of commercial tenants at the site would likely be challenging
given currently available commercial floor space at Tewantin, and developing opportunities
in the Noosaville industrial estate and Noosa Civic; and
Any potential use sought by Council for commercial purposes will require competition policy
compliance to ensure a level playing field is maintained with potential competitors.
Page 14 of 25
Section 15
SPECIAL MEETING AGENDA 31 AUGUST 2018
Financial Implications
To ensure that the financial implications of any potential site purchase are fully considered, 10 year
financial modelling has been undertaken based on a number of known buy and retain scenarios
(to effectively understand the worst case financial position should the site be acquired and
operated).
There are a myriad of scenarios that could eventuate regarding the future use of the site under
Council control, however only the following have been modelled for the purposes of the
investigation (with buy and resell options not yet considered):
Scenario 1 – Full commercial lease return (with 9 sub scenarios regarding alternative site
purchase cost and differing lease rates per m2).
Scenario 2 – Part commercial lease (assuming only 50% of the building footprint is leased
with 9 sub scenarios regarding alternative purchase prices and differing lease rates per m2).
Scenario 3 – Community lease (with 3 sub scenarios regarding alternative site purchase
cost).
The modelling incorporated the estimated rectification costs required to bring the buildings online
in addition to including annual operating and maintenance forecasts. Operating forecasts were
derived from comparison with other similar sized Council buildings (i.e. utilities, power, cleaning,
information communication), with other operating cost forecasts derived from first principles (i.e.
land management costs, rates, staff resourcing). Maintenance forecasts were utilised directly from
the building condition assessment results. Attachment 3 includes the list of general modelling
assumptions used in determining annual revenue, expense and net present value (NPV)
outcomes.
NPV is essentially a measurement of return calculated by subtracting the present values of cash
outflows (including any initial purchase cost) from the present values of cash inflows over a period
of time. After the cash flow for each period is calculated, the present value is achieved by
discounting the future value at a periodic rate of return (in Council’s case the likely rate of borrowing
funds from Queensland Treasury Corporation). Business and government use this approach to
determine if potential investments will provide a sufficient return (i.e. the net present value must be
nil or higher). Whilst this approach is not simple for local government projects with broader benefits
(social, economic, environmental) it is a good indicator of the likely financial impact on ratepayers
when making decisions.
The following graph outlines the NPV cost per ratepayer for the 3 scenarios. Assuming a
conservative approach to revenue generation (i.e. lease rates of $150m2 achieved) the potential
net cost to each ratepayer ranges from $258 to $296 over the 10 year period (on average a $25 to
$30 investment per annum). This would equate to an upfront general rate increase between 2%
and 2.6% to maintain Council’s current financial sustainability position.
Page 15 of 25
Section 16
SPECIAL MEETING AGENDA 31 AUGUST 2018
Options for Council
A number of options are available to Council regarding any decision or otherwise to purchase the
site. These options (including identified benefits and risks) are outlined in the table below (note
they are not exhaustive).
Option Benefits Risks
Do not purchase Potential financial and other risks Council is unable to directly control
relating to the purchase of the site the likely future use of the site
are avoided Ministerial designation reactivated
Site is disposed by the state for for a particular use which could
commercial development meeting result in loss of endangered
Council’s planning, environmental vegetation and other negative
and economic plan objectives outcomes (trunk infrastructure cost,
Possible perception from within the traffic challenges etc.)
community of cost shifting from state Inconsistent use development
to local government avoided application may result in refusal and
Council internal resources directed legal costs to ratepayers in
towards other identified strategic defending an appeal
objectives Site completely cleared for
development with at-risk vegetation
lost (should an inconsistent
development eventuate)
Advocate for Successful advocacy could result in Council is still unable to directly
preferred use future site use complying with control the likely future use of the
Council’s planning scheme and site
meeting broader economic plan Advocacy attempts are
objectives unsuccessful with the site disposed
Council planning and environmental for redevelopment resulting in an
objectives could be achieved inconsistent use application
without the need to purchase the Ministerial designation reactivated
site for a particular use which could
Financial and other risks of result in endangered vegetation loss
purchase mitigated and other negative outcomes (trunk
infrastructure cost, traffic challenges
etc.)
Page 16 of 25
Section 17
SPECIAL MEETING AGENDA 31 AUGUST 2018
Option Benefits Risks
Inconsistent use development
application results in refusal and
costs to defend a legal appeal
Site completely cleared for
development with at risk vegetation
lost
Buy and sell / retain Buy and Sell Buy and Sell
Council is able to control the likely Preferred Council use for the site
future use of the site (with the use may not align with or eventuate with
likely to be compliant with Council’s the potential purchaser
planning scheme) Ratepayers may need to fund any
Costs of purchase can potentially be net cost should purchase and other
recouped through sale (with site costs not be recouped through
subdivision or applying binding immediate or longer term sale
covenants protecting vegetation (through either a general rate
where required) increase or reduction in cash
Future commercial opportunities on holdings)
the site could also assist in meeting Realisation of cost shifting to local
Council’s broader economic plan government
objectives
Buy and Retain Buy and Retain
Council is able to take control of the Council retains responsibility for
site (and undertake appropriate cost refurbishment of the buildings, and
benefit analysis regarding financially ongoing operations and
viable uses – including possible floor maintenance costs of the facility
space downsizing to minimise cost) An anchor tenant is not secured
Site purchase and retention would (particularly given no expected
protect at-risk vegetation tertiary education demand for the
Future site use could assist in site)
meeting Council’s broader Uptake of floor space may not
economic plan objectives eventuate given location and other
spare commercial floor space
capacity in the shire
Ratepayers could fund the purchase
and net cost of operations of the site
in its current form through a general
rate increase
Where to from here?
Council staff are continuing to liaise with the state regarding the future of the site. Given the options
assessed and identified risks and benefits in this report, it is recommended that the purchase and
sell/retain option be pursued in the first instance depending on the Department of Employment,
Small Business and Training’s asking price (primarily given the site’s strategic location and the
opportunity to gain control of the site to investigate opportunities and mitigate development related
risks). An independent valuation has been undertaken which has provided some indication of the
current market value of the property.
If this approach is taken staff would report back to Council with the outcome of those discussions.
Page 17 of 25
Section 18
SPECIAL MEETING AGENDA 31 AUGUST 2018
Previous Council Consideration
Nil.
Finance
Refer to the body of the report.
Risks & Opportunities
Refer to the body of the report.
Consultation
External Consultation - Community & Stakeholder
Some interest has been expressed regarding potential floor space leasing from the local
commercial market. Whilst the level of interest is appreciated it was too early at this stage to provide
any meaningful feedback until the investigation was completed and future decisions made.
Internal Consultation
A number of internal stakeholders were consulted as a part of the investigation (with Executive
Team input into the development of this report).
Departments/Sections Consulted:
x Chief Executive Officer x Community Services x Corporate Services
Executive Officer x Director x Director
Executive Support x Community Development x Financial Services
x Community Facilities x ICT
Libraries & Galleries Procurement & Fleet
Local Laws x Property
x Waste & Environmental Health Revenue Services
x Executive Services x Environment & Sustainable Development x Infrastructure Services
x Director x Director x Director
Community Engagement Building & Plumbing Services x Asset Management
Customer Service x Development Assessment Buildings and Facilities
Governance x Economic Development Civil Operations
People and Culture x Environmental Services Disaster Management
x Strategic Land Use Planning Infrastructure Planning,
Design and Delivery
Page 18 of 25
Section 19
SPECIAL MEETING AGENDA 31 AUGUST 2018
Attachment 1 – Koala Habitat Overlay
Page 19 of 25
SPECIAL MEETING AGENDA 31 AUGUST 2018
Attachment 1 — Koala Habitat Overlay
| - | LEGEND x |
Se | 7
2B Schedule 7- Koala Habitat Areas |
C4) Habitat Regrowth
1 HS Remnant Habitat
7 g Base
#7 =Local Government Areas
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Page 19 of 25Section 20
SPECIAL MEETING AGENDA 31 AUGUST 2018
Attachment 2 – Bushfire Hazard Areas Overlay
Page 20 of 25
Section 21
SPECIAL MEETING AGENDA 31 AUGUST 2018
Attachment 3 – Financial Assumptions and Outputs
Financial Model Assumptions
Page 21 of 25
Section 22
SPECIAL MEETING AGENDA 31 AUGUST 2018
Page 22 of 25
SPECIAL MEETING AGENDA 31 AUGUST 2018
Total land size (ha) 11.04 | tHedtare|
Total land size (acre) 27.28{ 1Acre} 2.47105]
Total land size (sqm) 110,400] ==1sqm} 10,000 |
Treed area (ha) 9.48
Total building footprint (ha) 0.2460
Road (driveway) area (ha) 0.3460
Cleared area (ha) 0.96
Cleared area (sqm) 9.640
Fire Trail Establishment (S/km) $ 9.800
Fire Trail Length (km) 1.38 **including increase to 8m buffer
Fire Trail Maintenance (S$/km/pa) 365 **slashing 4 times per year
Hazard Reduction Burn $ 15,500
Harzard Reduction Burn Frequency Every 8 years
Initial Weed Management (S/pa) $ 1,602
Annual Weed Management (S/pa) $ 400
No. of High Risk or Large Trees 16
Cost per Arborist Report $ 250
[Mowing
Mowing cost (S/sqm) $ 0.03 **from Council mowing contract
Mowing frequency Every three weeks
[Tree Management |
Tree density (No. of trees/acre) 889 **assuming trees have an average of 2.1 metres spacing
% Trees Small 30%
% Trees Medium 50%
% Trees Large 20%
Stump Grind (S/tree) $ 270
Maintenance - Small (S/tree) $ 247
Maintenance - Medium (S/tree) $ 553
Maintenance - Large (S/tree) $ 1,423
Removal - Small (Stree) $ 315
Removal - Medium (S/tree) $ 632
Removal - Large (S/tree) $ 1,866
Initial Emergent Tree Assessment (Sitree/repor $ 160
No. of Emergent Trees 16
Ongoing Emergent Tree Assessment (Sitree/re $ 80
Frequency of Emergent Tree Assessment Every two years
Reactive Treed Area (ha) 0.71
Reactive Treed Area (acre) 1.74
No. of Trees in Reactive Treed Area 1,549 **assuming trees have an average of 2.1 metres spacing
% of Trees requiring Reaction pa 15%
No. of Trees requiring Reaction pa 232
Cost of Tree Reaction (Stree) $ 250
Cost per year - Tree Reaction $ 58,077
Page 22 of 25Section 23
SPECIAL MEETING AGENDA 31 AUGUST 2018
Annual Cost Summary (Inflated) – Full Commercial or Community Use
Annual Lease Revenue Projections – Full Occupancy Assumption
NOTE: The graph below includes a calculation error - refer to report addendum for an updated graph
Annual Net Cash Flows - Full Occupancy Assumption
Page 23 of 25
Section 24
SPECIAL MEETING AGENDA 31 AUGUST 2018
Annual Net Cost per Ratepayer - Full Occupancy Assumption
Net Present Value Outcomes (Full Occupancy Assumption)
Page 24 of 25
Section 25
SPECIAL MEETING AGENDA 31 AUGUST 2018
Page 25 of 25
SPECIAL MEETING AGENDA 31 AUGUST 2018
Scenario 1a Purchase at Market Value 1. Low commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Scenario 1b Purchase at Market Value 1. Mid commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Scenario 1c |Purchase at Market Value 1. High commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Scenario 1d | Purchase at Market Value 2. Low commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
COMMERCIAL Scenario 1e Purchase at Market Value 2. Mid commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Scenario 1f Purchase at Market Value 2. High commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Scenario 1g |Purchase at Market Value 3. Low commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Scenario 1h | Purchase at Market Value 3. Mid commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Scenario 1i Purchase at Market Value 3. High commercial lease rate. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Scenario 2a Purchase at Market Value 1. Low commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs
assumed at 75% of full occupancy to reflect partial lease of the site.
Scenario 2b Purchase at Market Value 1. Mid commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs assumed
seseeeceeeeeseeeee-f Ot.75%. Of full occupancy to reflect partial lease Of the Site. elec cece eeeecceceeeeeeseeeeeeeeeeceeecessececeeeesscceceeessscececeesseceeeeeesesseeeeeeesesceeceeeseseeeeeeeesscceeeeeeseseeeeeeeeeees
Scenario 2c Purchase at Market Value 1. High commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs
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SCENARIO 2 Scenario 2d Purchase at Market Value 2. Low commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs
PART © | llweseee---/a8SuMed at 75% of full occupancy to reflect partial lease Of the Site cece cc cceccsccenceeenceesneessecesnecsseeesneceseeesaeessecesseeseeesseeeneecsseessaeesseeeneeeseeeneeesseeeeaeesseeesesess
Scenario 2d Purchase at Market Value 2. Mid commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs assumed
cOER CIAL en na seaosau+-[St 75% Of full occupancy. to. reflect partial lease of the Site. ooo eccccccceesssescsecessucessesssovsssuesssuesssesssusessuesssvessuvsssussssusssuesssussssssssesssusssiessivessucesssssuesseeessesesseeeseeeeee
LEASE Scenario 2f Purchase at Market Value 2. High commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs
ceceeeeeceeeeeee-passumed at 75% of full occupancy to reflect partial lease Of the Site. ooo lee cece ccc eecccccccceeeenneseeeeceeeeceecccccceeasssssseeeeeeeceececcecceceassssseeeeeeeeeeceeccccceecsssseseeeeeeeeeeeeees
Scenario 2g Purchase at Market Value 3. Low commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs
seseeeceeeeeeeeeee foSsSumed at 75% of full occupancy to reflect partial lease Of the Sie. ooo e cece e eee eeeeceeeeececeeeceeecceeeeeesscceceeeesscceceeesesceeeeesesseceeeeeesceceeeeesseaeeeesssseeeeeeeesseeeeeeeeeees
Scenario 2h Purchase at Market Value 3. Mid commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs assumed
evesseeeeee--------]t 75% Of full occupancy to reflect partial lease Of the site. ele eeeee cece ce ceccecececeeeneesseeeeeeceecececccccecceesssseseeeececcecccceccccssssseeseeeeceecececececeecesssesseeeeceeeeeeeeeeees
Scenario 2i Purchase at Market Value 3. High commercial lease rate for 50% of the floor space. Council incurs all ongoing land management, maintenance and replacement costs. Operating costs
assumed at 75% of full occupancy to reflect partial lease of the site.
SCENARIO 3- | Scenario 3a__ | Purchase at Market Value 1. Three community leases at the site. Council incurs all ongoing land management, operating, maintenance, renewaland replacement costs.
COMMUNITY Scenario 3b__| Purchase at Market Value 2. Three community leases at the site. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
LEASE Scenario 3c | Purchase at Market Value 3. Three community leases at the site. Council incurs all ongoing land management, operating, maintenance, renewal and replacement costs.
Page 25 of 25