$9 lease of Bronte on agenda

The Derwent Valley Council will raise $9 over 9 years for the lease of the old and refurbished Bronte Ward in the Willow Court Heritage Precinct according to the new agenda item on the Council’s own website. It is common practice to have a “peppercorn” rent for community services, so this is not unusual. However this will tie up the business capacity of the location for that 9 years to any prospective lessee that the Council hope to attract with their current plans to seek out an International Tourist Operator (or favourable business) to run and operate the site. How this joint lease arrangement and the impact on each party will be affected has not been explored with any type of impact study to date.

Discussion On 16 April 2015, Council considered a proposition for the DVCH to lease a portion of the Bronte Building located at Willow Court. In accord with the Councils direction, discussions and negotiations have continued between Council representatives and DVCH Inc. The proposed Lease Agreement is presented to the Council for confirmation prior to the property being formally offered to DVCH Inc. The lease provides for:

 Annual rental of $1

 Nine year lease term

 Lessee responsible for utility costs such as electricity, water etc.

 Standard conditions associated with maintaining the premises in good order with fair wear and tear accepted, indemnification of liability, and the processes to be followed in the event that the building is substantially damaged through fire, floor or tempest

 Processes if failure by the lessee to observe any of the covenants or conditions The lease is not for the sole occupation of the entire Bronte Building; as is indicated on the diagrams attached to the lease the area known as the dormitory will remain with the Council, together with the area known as the caretakers apartment and adjacent Plant Room. Provision is included within the lease for non exclusive possession of the dining room and kitchen area.

This provision has been incorporated given the unknown future uses of the Derwent Valley Council Agenda – 20 August 2015 Page 58 dormitory area and the need to utilise the dining room and kitchen facilities and the like potentially in the circumstance. During the ongoing discussions the representative the opportunity for utilisation of portions of the external areas to the Bronte Building to be utilised by DVCH Inc. It was considered reasonable to incorporate the use of these areas into the lease Agreement on the basis that DVCH Inc would be prepared to undertake maintenance. The areas are again indicated within the Lease Agreement diagrams.

A further issue that has arisen has been a suggestion by the DVCH Inc that Council make a contribution towards a security system for that portion contained within the dining and kitchen areas. This has not been incorporated into the lease is proposed that it would be more appropriate for quotations to be sought by DVCH Inc for the entire building. The Council could then consider a proposal for a cost sharing arrangement once the likely costs are known. Further, in the event the shared space of the dining room and kitchen comes to fruition, and then it is proposed that a booking system be overseen by DVCH Inc and that costs of cleaning be negotiated closer to that time.

It is understood that the occupation of portion of the Bronte Building stems from the desire to provide some degree of activity and utilisation of the Willow Court areas owned by the Council. Given the Councils intention to also call for Expressions of Interest into the future use of those areas owned by the Council, there is a degree of risk in offering the lease proposed as it may compromise the extent of interest. It is acknowledged, however, that given the degree of uncertainty the expression of interest process may reveal, and likely timelines in the event there are any firm proposals, this arrangement provides a degree of certainty in the immediate term.

It is therefore recommended that the Council offer the Lease of a portion of the Bronte Building to the DVCH Inc for a term of nine years with a annual lease rental of $1.

Consultations That Have Taken Place

(a) The Community Not applicable

(b) Experts Councils Legal representative

(c) Stakeholders Derwent Valley Community House Inc Representatives Proposed Community Consultation, Public Relations and Media Issues Upon formal acceptance of the lease by DVCH Inc, it is proposed that appropriate media release be issued and advertising take place. Derwent Valley Council Agenda – 20 August 2015 Page 59 Budget/Financial Issues The properties owned by the Council in the Willow Court Complex represent a late and significant investment. Maintaining the structural integrity of the buildings will potentially escalate over time. The leasing of a portion of the Bronte building will allow for outgoings and some minor maintenance to be incurred by the lessee. The lessee has also access to grant funds which may enable some additional restoration works to be undertaken. Policy Implications There are no significant policy implications associated with this particular lease arrangement.

It is noted however that a former resolution of the Council associated with embargoing rate payer funds whilst not a policy position, it will need to be addressed by the Council into the future.

Recommendation It is therefore recommended that the Council offer the Lease of a portion of the Bronte Building to the DVCH for a term of nine years with a annual lease rental of $1 under the terms and conditions contained in the lease enclosed.

 

P.S.

Councillor Bester wants best for Bronte if you consider his post on his Bog Site. He is not happy with the shared use of the building, especially with the previous plans as a tourist attraction and also now the Community House. While we have had these concerns for some time we are yet to hear from any Councillor who voted in favour of the multi use of the building. The 9 year lease will severely affect the likelihood of anyone or an organisation taking on the management and investment in the historic precinct as suggested by the Derwent Valley Council.

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