2017-10-16 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                                                16 OCTOBER 2017


Assessment panel members conducted further clarification meetings and correspondence with
Eco Cottages to progress lease provisions reflective of its EOI submission and development
proposal. The following further lease provisions are agreed in principle:
   An initial rent free period of 4 months (in line with industry practice), with a further deferral
     of 3 months’ rent payments to the second year of the lease to assist Eco Cottages’ cash
     flow during the period of it developing Council’s site;
   Annual rent increases of CPI or 3%, whichever is the greater;
   Market rent reviews to be on an unimproved site (i.e. vacant site) valuation basis; and
   Eco Cottages’ buildings and improvements to generally remain its property at all times but
     with Council able to require the lessee to remove or forfeit buildings and improvements in
     the event of cessation of the lease.

EC indicated some concern with development of Council’s land under a 10 year total lease
period noting there is risk its lease may not be renewed. Whilst unable to commit to a future
Council’s action, Property staff have advised that current provisions of the Local Government
Regulation 2012 provide for a Council to negotiate directly with an existing tenant for renewal of a
lease, in the first instance, rather than obliging it to conduct an open tender.

The assessment panel recommends Council agree to enter a commercial lease with Eco
Cottages Pty Ltd for the 4 Jarrah Street site generally in line with the provisions detailed in this
report.

Previous Council Consideration

Ordinary Meeting Minutes, 18 May 2017, Item 2, Page 8
That Council note the report by the Property Advisor to the Services & Organisation Committee
Meeting dated 9 May 2017 and proceed to an Expression of Interest process for a commercial
lease of Council land at 4 Jarrah St, Cooroy (Lot 2 RP176126), as detailed in the report.

Ordinary Meeting, 1 May 2014, Item 10, Page 9
That Council note the report by Property Officer, Property and Land Management to the General
Committee dated 28 April 2014 and seek Expressions of Interest (EOI) for a Commercial Lease
for 4 Jarrah Street, Cooroy.

Finance & Risk
Preparation of a new commercial lease for the site will incur legal and surveying costs in the
order of $8,000 and would be met by the Property Branch’s operational budget. A new lease
agreement would need to address specific risks associated with the proposed development of
Council’s land and standard risks associated with commercial lessees.

Consultation

External Consultation
Preliminary legal advice on lease provisions has been obtained from a consulting solicitor.

Internal Consultation
   Director Corporate Services
   Property Manager
   Procurement & Fleet Manager
   Property Officer



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