Former Masters site Q&A's
Why purchase this building?
Council saw this as a commercial opportunity and investigated options to purchase the (building) site for significantly under its replacement value. The building is not only an excellent commercial opportunity, it is also considered to be a viable option for a centralised administration building.
A centralised administration building will allow us to bring teams together from across the organisation so that we can deliver more effective and efficient services to the community.
Why would Council be interested in commercial opportunities?
MidCoast Council is a commercial and entrepreneurial organisation. Council makes purchases that are strategic in nature and provide either a commercial return or community benefit (e.g carparking). Many of these sites provide an income for Council which not only goes back into community services and infrastructure but also puts downward pressure on rates.
We currently own:
- Woolworths supermarket in Peel StreetTuncurry
- Motel and other land in Wallis Street Forster
- Bottle Shop in Lake Street Forster
- Civic Precinct site in Lake StreetForster
- 6ha residential land in ChapmansTuncurry
- Aviation Business Park in Taree
- Land forming part of the proposed "Northern Gateway" transport precinct
- Existing Council office buildings and infrastructure depots
What was MidCoast Council’s process for purchasing the site?
- Initial enquiries made 2 August 2017
- Formal expression of interest (Council resolution) 3 August 2017
- EOI closed 4pm 10 August 2017
- Followed up offer and advised no offers have been accepted 1 September 2017
- Inspection of property with senior staff, union reps and architect 12 October 2017
- In negotiations with broker 16 – 31 October 2017
- Commercial inConfidential business paper presented to Council 2 November 2017
- Contracts exchanged 3 November 2017
- Settlement due 4 December
What determined the price?
Council submitted an expression of interest on 3 August. Council obtained a valuation based on a commercial return on the site and subsequently paid for the site in accordance with this valuation.
Where is the money coming from?
MidCoast Council has extensive property investments and we are using the income from these investments and savings through the merger to cover any loan repayments. Former Master site - Q&As Page 2 of 4 The program comprises:
Will the funding of the roads/bridge program be affected by the Masters purchase?
No. Since merger Council has put together a comprehensive RoadCare program which we anticipate will invest over $160 million into improving our local roads and bridges. This is on top of our existing road program and represents a huge achievement that addresses our community top priority.
The program comprises:
- A $30million RoadCare package made up from $14million in Stronger Communities funding and $16million in merger savings over the next four years. Work has commenced and results can be seen across our region.
- Special Rate Variation (SRV) – income from the SRV is quarantined under legislation and will be used specifically on roads and bridges. Council anticipates being able to secure a low interest loan of $50millionwith the money raised through the SRV.
- Council is also negotiating with the State Government to have Council's funding matched dollar for dollar. That is;an additional $50 million which will provide for a $100 million road package..
- Grant funding received - $8.3million for Bucketts Way in State funding,
- $6.835million for bridge renewals in Federal "Bridge Bonanza" funding.
- Council is negotiating with the State Government for a commitment of $20 million for the replacement of Cedar Party Bridge and associated works; including the replacement of the swimming pool.
With the above program in place Council's backlog of roads and bridges will be within the State Governments asset management guidelines.
What Council buildings do we have that would be affected by the move to the masters site? What will happen to these?
- Council Administration, Pulteney Street, Taree
- Water Services, Muldoon Street, Taree
- Council Administration, Breese Parade, Forster
- Water Services, Breese Parade, Forster
We are currently having these buildings valued and assessed to determine their best possible use into the future.
This information will be incorporated into the business case being prepared and presented to the December Council meeting to determine whether the site should be used as a centralised office or other commercial opportunities.
If administration was moved into one building a presence would remain in Forster. It is anticipated that the depots and district offices would not be affected otherwise the site may be used for commercial opportunities creating local jobs. Likewise if we do move then the current sites can be used to create local jobs.
It is important to remember that to retrofit the existing Council Offices to ensure they are fit for purpose will come at a cost. Currently Council is operating out of 4 offices very much like the former 4 organisations operated. Our teams are currently dispersed across multiple sites. To bring teams together will require moving staff and re organising work teams and this will require a refit of the existing buildings.
How much is it going to cost to fitout this building?
Council is developing a detailed business case and a cost benefit analysis that will be presented at the December Council meeting. Former Master site - Q&As Page 3 of 4 What about the staff and the impact on them? If a change in location is determined to be the best option we will continue to liaise with staff to understand the potential impacts and minimise these where possible.
Is the use permissible on the site?
The land is zoned B5 Business Development under the Greater Taree Local Environmental Plan 2010.
A public administration building (Council offices) is permitted with consent.
What about the staff and the impact on them?
If a change in location is determined to be the best option we will continue to liaise with staff to understand the potential impacts and minimise these where possible.
What information did the Councillors use to make this decision?
As part of our Councillor on-boarding program the General Manager provided a briefing in September to new Councillors to understand their appetite to pursue the purchase of the former Masters site. Councillors agreed to the pursue investigations and were kept up to date throughout the process.
A confidential report was presented to Council 2 November 2017. This report is now available on our website. At this meeting Council unanimously resolved to proceed with the purchase of the former Masters site as a commercial opportunity.
A detailed business case and cost benefit analysis will be provided at the December Council meeting.
What's the situation with MidCoast Trucks?
The sale of the site was not a Council run process.
The Masters site was subject of an Expression of Interest (EOI) through Cushman & Wakefield on behalf of the owner. MidCoast Council submitted an EOI to purchase the property. We did not block anyone from the process and the sale process was not under Council's control. Council's timeline and process can be found here http://www.midcoast.nsw.gov.au/Council/Works-and-Projects/Council-Projects/Purchase-of-former-Masters-site
Council are happy to work with and support MidCoast Trucks to help bring them to the region, however, since contracts were exchanged on the former Masters site Council has not been contacted by MidCoast Trucks other than to advise potential legal proceedings. If MidCoast Trucks are disappointed with the process they would need to take this up with the agent. We are surprised to be advised Council may be party to potential legal proceedings, particularly as this was an independent process run by the agent, Cushman & Wakefield.
Why the Masters site?
This was a unique commercial opportunity that presented itself with limited time to act.
To house approximately 400 staff and facilities we need a building that is around 6000sqm. We are looking at the most cost effective option to deliver greater value for money for our ratepayers.
What determined the price paid?
The site was purchased within the valuation range provided by an independent valuer. In the event Council can’t use the building as a combined office the rental return is within a sound commercial range.
What about other Council services, are they moving to?
We anticipate there will be minimal or no impact to other services such as Ageing & Disability, Libraries, Visitor Information Centres, district offices and depots.
In addition a face-to-face point of contact will remain in Forster for transactions over the counter. Former Master site - Q&As Page 4 of 4 We are constantly looking at ways to improve efficiencies that deliver greater value for money for our ratepayers. The potential consolidation of Council’s administrative functions
How is this going to deliver benefits?
We are constantly looking at ways to improve efficiencies that deliver greater value for money for our ratepayers. The potential consolidation of Council’s administrative functions will mean tangible savings and operational efficiencies. Information on this will be provided in the detailed business case. Integration of teams has been hampered and challenging with staff dispersed across the region. Our focus is on ensuring our staff work collaboratively to streamline processes and work holistically to deliver the best possible outcome for our community.