DUDLEY MAIER is a former Vincent councillor. In this week’s SPEAKER’S CORNER he casts a critical eye over a lease deal at Leederville Reserve between the WA government and Vincent council and finds the city needs to lift its game.
THE December 21 edition of the Voice had a front page story about how the WA Government took the City of Vincent to the cleaners over the lease of the office building on the Leederville Reserve.
The headline “State def Vincent (1-0)” was somewhat premature; the final score was 3-0, with Vincent kicking a couple of own goals in extra time. There are a number of reasons for this.
Leederville Oval was initially vested in the care of the City of Perth for the purpose of “recreation”.
In 1994 the vesting order was changed to “recreation and child care centre” in order to allow a child care facility to be built. The precedent for change was set!
Vincent councillors have acknowledged that the deal is “not a great outcome” and “in the commercial sector it may not be regarded as the best outcome”.
They are claiming that they were constrained because the building could only be leased to the one, specific tenant.
I questioned if the City formally approached the minister with a view to amending the vesting order. It appears that no approach was made as part of the lease negotiations. It seems to have been accepted as a fait accompli.
For all intents and purposes the building has been used as an office for 15 years, and it would take a brave minister to knock back a request to change the vesting order to “recreation, child care centre and office”.
To add insult to injury, the Voice’s story said mayor Cole was looking forward to more staff from the Department of Local Government, Sport and Cultural Industries joining their sports and rec colleagues, therefore reinforcing the reality that the building is just a general “office”, and calling into question whether the proposed use is allowable.
I mentioned that it would be a brave minister to knock back a request to change the vesting order. A politically savvy council would have realised they had the upper hand with the state election coming up, and it would be easy to spin the story along the lines of the state government bullying the council and being unreasonable with the result that the local community loses out.
Then again, perhaps they didn’t want to make party political waves. Just saying.
But that only accounts for the first own goal.
The story stated that the department, which currently pays $645,000 in rent, will nominally pay $546,000 in the first year despite a market evaluation of $640,000.
The deal was that a $3 million “incentive” would be paid over 10 years, with $1.6m being paid in the first three years. The silver lining, if there was one, was that the $1.6m was to be spent on a Vincent approved fit-out. At least some of Vincent’s money would be used improving its asset and it would have some control over how it was spent.
But this wasn’t good enough for the department. It asked for an extra $25,000 to spread the $1.6m over three years rather than two, and it wanted the $1.6m to be deposited into consolidated revenue with no commitment to spend the money on a fit-out. And Team Vincent lived up to their vision of being a council that says ‘yes!’ (but that’s another story).
The story also made reference to a council mood that was more Chamberlain than Churchillian. After seeing that the department, which currently pays about $645,000 a year, will pay about $290,000, $340,000 and $365,000 in the first three years, I think a more apt reference would be the Kerry Packer quote. After Packer sold the Nine Network to Alan Bond for $1.05b, and after buying it back three years later for $250m, he said: “You only get one Alan Bond in your lifetime, and I’ve had mine.”
This exercise has highlighted the lack of experience and commercial acumen at Vincent and a lack of confidence in Leederville. I feel the approach is along the lines of getting an outcome that can be defended, rather than the best, long-term deal for the community.