2017-10-16 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                                                 16 OCTOBER 2017


Lease/Business Component          Eco Cottages’ Proposal
Proposed Development:             Staged Construction of a 2,600m2 Factory over 1 to 3 years
Employees:                        12 existing
                                  + 8 new proposed with the factory expansion
Environmental Initiatives:         ISO 14001 Certification process commenced.
                                   Environmental Policy in place.
                                   Proposed factory to incorporate solar power and water
                                      harvesting.
                                   Cypress pine based building manufacture.
                                   Manufacturing by-product recycling programme.

EC manufactures pre-fabricated modular homes using native cyprus timber. The company,
originally established in Hill Street, Pomona in 2006, and has grown from 2 employees to 10. EC
indicates it benefits from the continuing growth in popularity of pre-fabricated buildings, with the
sector forecast to grow at more than 5% per annum over the next decade. The company is also
federally registered as a Research and Development Entity for its research into the stabilisation
and use of sustainable native cyprus timber, which currently is in limited use in the construction
industry. EC’s R&D recognition allows it to obtain significant tax incentives for much of its
business operation and the incentives would apply to some of the proposed new factory
construction.

EC currently rents factory premises directly to the north of the site in Johnson Court and advises
that that factory’s production is unable to meet customer demand. It proposes to construct a new
factory at 4 Jarrah Street to allow it relocate and expand its operations. The proposed factory is
approximately 2,600m2 in area and will more than double EC’s manufacturing area. Preliminary
plans for the factory are included as Attachment 2. Development approvals will need to be
obtained by EC, with the factory use consistent with the site’s Industry Zoning under the Noosa
Plan and subject to code-assessable development applications. At least stage 1 of the factory
construction is intended for completion in the first year to allow EC to relocate but EC aims to be
able to finance the entire construction from the outset.

The assessment panel noted EC’s strong existing contribution to the Noosa economy and local
employment and the potential for significant growth of those contributions posed by the new
factory venture. Eco Cottages suggest the 8 new jobs posed by the factory expansion will
comprise of:
    1 full time architect
    1 full time office administrator trainee
    1 full time qualified carpenter
    1 full time qualified cabinet maker
    1 apprentice joiner
    1 apprentice carpenter
    1 apprentice painter
    1 apprentice plumber

The panel also noted EC’s development intent and business operation align with the Noosa’s
Local Economic Plan by facilitating growth of a manufacturing business seeking to research new
technologies and grow local capacity. Eco Cottages tendered an annual rental of $30,000, which
is in line with an independent market valuation for the site undertaken by Savills Valuations Pty
Ltd on behalf of Council. It proposes an initial lease term of 4 years, with 2 further options of 3
years.

Council commissioned an independent third-party financial assessment of Eco Cottages’ trading
history, which indicates the company has financial capacity to meet rental obligations. Whilst
development finance would normally be difficult to obtain over the 10 year period proposed, EC
indicates finance is to be sourced from identified private equity investors, rather than commercial
institutions.
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