The association believes that one of the biggest financial disasters visited on unsuspecting ratepayers by council in recent years stemmed from its decision to purchase Eden’s Hotel Australasia in February, 2016.
In the four years that council held the property, its future was subject to many acrimonious debates, as councillors argued over the future of the iconic site.
Five members of the current council were involved in the matter from the outset, with Crs Tapscott & Seckold supporting the acquisition of the property & strenuously opposing its sale some four years later, while Crs McBain, Fitzpatrick & Allen opposed the original purchase & supported its sale.
In August, 2019, council resolved to sell the hotel for an undisclosed price, undertaking to publish all “closed session” documents on settlement of the sale.
In March of this year, noting the fact that the closed session documents had not been published, the association
wrote to council requesting copies of those reports. In May
council confirmed that the sale had been fully settled on May 20th & that the closed session documents would be released “
in due course”.
Following receipt of council’s May advice, the association published a
Media Release questioning the basis of the delay in finalising the sale, in particular as no mention had been made by council of a delayed settlement having been agreed on the one hand, while the purchaser appeared to have been provided with access to & had commenced works on the site coincidental to the announcement of the sale.
The following month, frustrated by council’s lack of transparency around the matter, the association submitted a
GIPA Application seeking a copy of the
Contract for Sale &
Side Deed relating to the sale,
copies of which were forthcoming this week.
What was immediately apparent to the association was that the Contract of Sale & Side Deed were dated April 2nd, 2020, almost eight months after council had resolved to accept the offer made for the hotel, & that there was no delayed settlement provision in the contract.
The association understands that templates of the Contract for Sale & Side Deed documents had already been finalised at the time council resolved to accept the offer made for the purchase of the hotel. The association believes that there was no reason why the contracts could not have been signed, exchanged & the sale settled by October, 2019, some six months earlier than council managed.
Given that there was no extended settlement involved, the association can only conclude that it was incompetence on the part of council that gave rise to the eight month delay in the Contract for Sale & Side Deed being signed & the sale finalised.
While council has ignored calls for it to disclose the full cost of its involvement with the Hotel Australasia, the association believes that it will ultimately exceed $1.7M.
- Original Purchase Price $535,737
- Initial Legal & Consulting Costs $102,462
- Maintenance Costs $ 69,821
- Estimated cost of council management/staff time $100,000
- Estimated final Legal Costs & Incidentals $ 50,000
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$858,020
Less:
- Proceeds of Sale $150,000
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- Estimated Net Cost $708,020
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Having burnt $700K on this financial debacle with nothing to show for it, ratepayers still have to repay the $1M borrowed to fund the misadventure.
No wonder the council’s competence is constantly under question.
John Richardson
Secretary/Treasurer
Bega Valley Shire Residents & Ratepayers Association
Tel: 0264945669
Email: secretary@begavalleyshireratepayers.asn.au
Website: http://www.begavalleyshireratepayers.asn.au
CC: Minister for Local Government
Member for Bega