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The Interim Administrator of Central Coast Council, Mr Dick Persson AM, is expected to resolve to sell some significant council assets on the evening of Monday, 30 November. Staff appear to want him to do so in a hurry and without community consultation.
By Jackie Pearson
Item 5.5 on the agenda for Central Coast Council’s ordinary meeting of November 30, should be of great interest to all Coast residents and rate payers. The list of assets that have been proposed for immediate sale by Joe O’Connor, Property Development Manager, Jamie Barclay, Unit Manager, Economic Development and Ricardo Martello, Executive Manager Innovation and Futures, have been described as “surplus to Council’s current and future needs and can be considered for immediate sale”.
According to the report recommending their immediate sale: “These properties were nominated after completing a desktop review of Council’s high value assets which would have the least perceived impact to the community.”
The properties listed for sale may surprise many in the community. The most high-profile is the former Gosford Council Chamber in Mann St, Gosford. It is understood that a proposal to sell this property for the bargain basement price of $8 million was put to our councillors before they were dismissed – and refused. The Point has learned that Council staff told Councillors they already had a developer interested in buying the site at the proposed price.
This may explain Council staff’s recent rapid moves to demolish the Caddy Club, the old hotel immediately next door to the former Gosford Council Chamber. If you’re selling off the family silverware at fire sale prices, why not make it a job lot? I recall one “independent” Councillor telling me in 2017 that the Gosford Council building had reached the end of its useful life and should be sold.
I have always maintained the amalgamation was, in fact, a takeover of the conservative, pro-development Wyong Council by the slightly-more community friendly Gosford Council. Selling the Gosford Council building as quickly as possible would be a bit of a spoiler for any moves to decouple from Wyong and de-amalgamate as other councils forced into amalgamations in 2016 have been doing.
Former Mayor and Suspended Deputy Mayor, Jane Smith, has pointed out that the Administrator has not yet released his report that will detail the true scale of Council’s financial problems.
He has until 14 days prior to the initial suspension term – so mid-January – before he has to hand that report to the Local Government Minister.
“He is planning to set the Council’s future in stone before our community has all the information available to them,” suspended councillor Smith said.
“At the very least, our community should have the chance to see the 30 day report that outlines the financial problem – and the savings to be made – before a decision is made, see a report that outlines how probity and transparency will be part of this process, and have a say on the sale of public land – with all tranches listed – including the Gosford Administration Building. The options should go on public exhibition,” she said.
Council’s website explains that Council is only considering selling one percent of its operational land holdings and that those considered for sale will be “non-core assets no longer required”. Apparently, according to the website, the parcels on the disposal list have previously been considered for sale, are duplicates resulting from the amalgamation or surplus to Council’s current and future requirements.
Inclusion of Gosford Council Chamber on the list is a slap in the face for anyone hoping for a demerger but there are other properties that do not appear to meet the above definition of surplus and non-core. There are elements of the fire sale process that appear to lack transparency and good business sense and there are some “non-core” land holdings conspicuously missing from the list.
What’s on the list?
The O’Connor-Barclay-Martello report describes the properties put forward for sale as “low hanging fruit” – properties with the biggest potential sale prices and likely to sell easily. In fact, the report believes money could be flowing into council’s coffers from the sale of these assets by mid-2021.
A closer look reveals that the sale of these assets will not be as straightforward as implied by the report.
The sale of three lots at 23 to 25 Ashton Avenue, The Entrance, appears to be the most straightforward, which may be why the report authors put it top of the list. The Spring Creek Business Park at Doyalson is another that appears reasonably innocuous except for mention of a proposed biodiversity corridor. After that, things get a bit more complicated and a bit less community-friendly.
Not many in the community will lose sleep over the sale of the site of the proposed Chappie Pie China Time Theme Park at 4 and 10 Warren Rd, Warnevale, but it does include some E2 land and the report acknowledges that investigation will be required to “fully understand the implications of sale re biodiversity offset credits”.
Likewise, 140 Sparks Rd, Warnervale, also has Ecologically Endangered Communities, key habitat for threatened species. This should limit the land’s potential future development and any potential buyer would expect that to be factored in the purchase price. So much for low hanging fruit, a quick sale and a mighty useful profit.
The Lucca Road, Wyong, property needs an easement to be created before sale. Another expense to Council.
Low hanging fruit should mean the public could expect operational land only in this first of four tranches of proposed asset sales, and yet, lots at 219 Albany Street North, Gosford will need to be reclassified as operational before they can be sold.
The Albany Street North lots are currently used as a childcare centre, dementia centre and a youth hostel. The non-financial importance and value of these council-subsidised community services is downplayed in the report.
We are told the childcare centre’s lease has expired. Geoff Wright Cottage, the dementia centre’s lease expires in 2021 and its rental is described as “nominal” so of no value – quite disposable really. Rumbalara Hostel also pays “nominal” rent, according to the report.
It is understood that land on Hue Hue and Sparks Road at Jilliby, including the ill-fated Kiar Ridge airport land, was being considered for a major recycling centre in partnership with Lake Macquarie Council. It appears negotiations fell through in about May thanks to some incompetence on behalf of Central Coast Council. So that potential long term, employment creating opportunity can be sacrificed and the land sold, according to the O’Connor-Barclay-Martello land sale proposal.
That brings us back to 49 to 75 Mann Street and 126 Georgianna Terrace. Let’s start with Georgianna Terrace, that’s land at the back of the conservatorium of music that adjoins Henry Parry Drive. It is bigger than it looks and is currently used for Council staff car parking. We won’t need that if we don’t have a council administration building in Gosford anymore.
The Conservatorium has had its eye on the land and proposed a partnership with Council to develop a performing arts centre but that appears to be off the table.
The Mann Street land is massive. Its sale would destroy the community’s long-held dream of a regional performing arts centre in the heart of Gosford. This land is within the Gosford City Centre SEPP so once it is in developer hands height and floor space ratios are completely negotiable and out of the influence of the community or Council.
The report reveals that 73 and 75 Mann Street are classified as community land. They cannot be sold without being reclassified to operational land. This is not, nor should it be, a straightforward process. The community will need to be consulted. How then, is this low hanging fruit?
These properties were compulsorily acquired last year to form part of a regional performing arts centre precinct. The Central Coast was promised hundreds of million as part of the Snowy Hydro money which could have been used for the performing arts precinct but the NSW Government reneged on its promise. The sale of the Gosford Council building and a massive proportion of this city block would be a significant loss to future generations.
Taking the public for mugs?
We, the public, are still waiting to hear Mr Persson tell us the extent of Central Coast Council’s financial crisis. What is the size of the deficit? How many millions of restricted funds have been illegally spent without the consent of our elected Councillors or the Minister for Local Government? What will be done to rectify the internal systems and chains of command to keep restricted funds safe in the future and ensure the highly-paid officers of the Central Coast Council abide by the law?
These questions remain unanswered and yet, on 30 November, the first of four tranches of council assets could be approved for sale.
Surely that demands that the process used for their sale is completely transparent and follows the laws of NSW to a T. Surely? Well, not necessarily.
There’s no time, we’re told in the O’Connor-Barclay-Martello report, for a formal open public tender to secure the services of the best possible real estate agent to oversee the sale of the low hanging fruit properties.
Instead, “Council will procure Real Property Sales services (real estate agents) for the first group of properties subject to a competitive quotation process, in lieu of a formal open public tender.”
It turns out Real Property Sales are a list of pre-vetted real estate agents approved by the NSW Government for Councils to use to sell properties.
Surely a man of Mr Persson’s professional and ethical standing will send Council staff a clear message that due diligence and transparency are necessary and a tender will be called for.
An open tender process will take 12 weeks but it’s almost the silly season and it is highly unlikely, unless Council staff have buyers lined up, that there will be a flood of interest in the low hanging fruit over Christmas and New Year.
“For further releases of property, Council will use an open tender to establish a panel of suitably qualified and experienced agents. This panel will enable Council staff to efficiently procure agents on the panel offering the best value and market reach to exceed the market valuation,” the report said.
The report does acknowledge the “various risks” involved with the liquidation of these assets.
Public perception and reputational risk are first on the list. Poor public perception can only be helped along by the lack of community consultation over the sale of major assets such as a massive block of land in the centre of Gosford and the complete withdrawal of an administrative presence for the regional council in the region’s capital.
The fact that there are blocks of community land quietly bundled into this first tranche also rings alarm bells.
Opportunity Cost is another listed risk.
“While these sites have been identified as surplus to Council’s need, there is the possibility that these sites could be redeployed for other uses and represent an opportunity cost to Council.” Apparently these opportunities have been considered and reviewed within the analysis of these sites. The public is supposed to trust council staff’s expertise to come up with a methodology for analysing the sites that is robust. This is the same executive leadership team that oversaw the use of restricted funds.
What should be sold?
Obvious omissions from the fire sale list include the Warnervale airport, the Central Coast Group Training headquarters in the Tuggerah Business Park and the Lake Haven cinema complex. All three are prime assets that are of very little value to the vast majority of Central Coast residents. Why are they not in the first tranche? Perhaps they will be on list two, three or four.
Kicking the problem down the road
When corporations get into financial trouble their first move is usually to start sacking people. Their second is to sell assets. Unfortunately, financial troubles tend to coincide with economic downturns. Economic downturns are not a good time to sell your most valuable property assets. Buy in doom, sell in boom.
If the Central Coast Council has over-spent to the point where it has been using restricted funds to keep paying its staff and providing its services, and if it were a company, an administrator would be put in place before a liquidator was allowed anywhere near the company’s assets.
In the corporate world, the job of the administrator is to steady the ship whilst conducting a thorough investigation of the full extent of the company’s financial traumas. The company’s creditors would expect a thorough assessment of the situation before any real assets were touched.
It appears the NSW Government, having corporatized our local government, is now determined to skip the thorough investigation stage and the report to creditors stage of administration and move directly to the fire sale of assets.
If Mr Persson is determined to start selling assets before he delivers any of his reports, he should at least have enough regard for the Central Coast community, in his short time with us, to tell the council officers who put this proposal together, to exclude any community land from any of its tranches, consider the social ramifications of the sale of assets currently used as a childcare centre, dementia centre and youth hostel and at least use a tender process to find the best real estate agents to do the deal.
He could, instead of rushing, defer this matter until January, to engender some faith in the community and give staff time to at least let the public know where they found Real Property Sales.
