State def Vincent (1-0)

TOUGH negotiators from the state’s sports and recreation department have left Vincent council with a $3 million hole in a long-term investment.

The council built 246 Vincent Street in 2004 on the back of a 25-year loan, agreeing to a state government condition that the building could only be used for administering WA’s sport and recreation needs.

A 15-year lease was signed with the department (now rolled into the Department of Local Government, Sport and Cultural Industries) which currently pays $644,000 a year – a smidge over the market rate.

But the lease expires December 21, and with a condition making it the only plausible tenant, the department has played hardball for a better deal.

Initially it offered just $450,000, but after negotiations, settled on $546,000pa on a 10-year lease with a 5-year option.

Council staff called the deal an “incentive” for the department to stick around. While it’s a $3m drop in revenue over the life of the lease, they clawed back some territory when the department agreed to fund a $1.6m building upgrade.

The mood at the December Vincent meeting was more Chamberlain than Churchill as councillors accepted the state’s deal. 

Councillors Dan Loden and Joanne Fotakis (whose background is in commercial property) acknowledged it would be difficult finding an alternative tenant. 


“I know there has been a lot of negotiations back and forth on this. Whilst it is not a great outcome for the city, it probably is the best outcome we can get,” Cr Loden said. 

Mayor Emma Cole described the state’s final offer as “a slightly better option than what first came before us”. 

“We are actually in a slower market and a rent reduction makes sense,” she said, but pointed out the original deal left the council on uncertain grounds because it had a 25-year loan and just a 15-year lease.

“But I think given the circumstances and where we are, I do really appreciate the effort the administration has gone to tweak this and to work to secure the long-term tenancy.”

Ms Cole said the department had been a good tenant and it was good to have government workers in the building, with more department staff expected to join the sporties.


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