Freo's View

PERTH ROAD AND RAIL TRAFFIC AT STANDSTILL BY 2031

Posted in fremantle, infrastructure australia, TRAFFIC, western australia by freoview on May 22, 2015

I absolutely understand how difficult good governance it at every level for our local, state and federal governments and I don’t believe party-focussed governments bashing and negativity is helpful, productive or a way to find solutions for the problems we face. Governments will never please everyone, so they sometimes need to make unpopular decisions. All good and well, but why is there so little long-term and strategic planning that is actually implemented? Large reports are written, expensive consultants’ fees paid and glossy reports published that end up in the archives. Traffic problems appear to go in the too hard basket as governments only work toward the one or two terms they are in office. What happens after that is the opposition’s problem.

Look at the report in the West Australian today where Infrastructure Australia warns that road congestion in Perth will cost the State 16 billion dollars a year by 2031, and seven out of the ten most clogged roads in Australia will be in Perth. The other three in Sydney.

But the way we are going in WA we can’t even say the State will be able to compensate for that with rail transport, as according to Infrastructure Australia the Joondalup and Mandurah lines will also reach “crush capacity” by 2031.

All that is due to pressure from a very fast growing population, estimated to reach 3.9 million by 2031.

To me it appears to be madness that these issues are not the first priority for our State Government, no matter if they are Liberal, Labor, National, Greens, or whatever, and it also should be a top priority for the Federal Government to support and assist WA in trying to find solutions fast. It is essential for the well-being of our community and for our economy that transport flows, that people can commute to and from work in a reasonable time that does not affect their physical and metal health, and it is essential that goods can reach their destinations within an acceptable time frame.

Decentralisation also needs to be a priority to assist with transport problems and we need to fast get past talkfests about this and implement the changes needed with urgency. The problem with that is that the Capital City Perth dream will want more highrise office towers there that will only make the problems worse.

State Government needs to give incentives to developers to build offices in ‘satellite cities’ and also move government departments and agencies to the suburbs, so that there is less focus on Perth and the problems it creates getting people into and out of the capital city during rush hours. We in Fremantle have been on our knees to ask State Government to send one or a few departments and agencies over here to help boost our economy and CBD residential population, but so far we have had very little success swaying the Barnett government in committing to that.

Urgent action is required as 2031 is only less than 16 years away!

Roel Loopers

YES MINISTER GOVERNANCE HURTS FREMANTLE

Posted in fremantle, politics, state government, western australia by freoview on May 21, 2015

I wrote a post below on how intrigued I am with local government, but the piecemeal planning of the Perth Freight Link by State Government puts Fremantle Council’s ineptness in the shade.

Transport Minister Dean Nalder appears to be doing most things on the run and changes his mind more often than the Melbourne weather. He has suddenly announced that they are looking at widening the Fremantle Stirling Bridge to accommodate the expected tsunami of additional trucks to Fremantle Ports.

This means bringing forward the bridge expansion by some 10-15 years. Wow! And all that just because Fremantle Mayor Brad Pettitt expressed his worry about creating a bottleneck full of traffic congestion chaos in North Fremantle? Yes, Minister!

Minister Nalder also said he was not convinced yet about the route of the PFL through Palmyra, but only after residents protested against being forced to sell their homes to make way for the road. Yes Minister!

On the hop piecemeal planning indicates clearly that there has been no integrated planning by State Government for this extremely expensive, and wrong, option to get freight to Fremantle Ports. I don’t give a four X what side of politics governments are on as long as they offer good, professional and sensible governance, but this whole thing is just as shambolic as the way the State’s finances have been mismanaged. It is unacceptable and the people responsible for it should all be sacked, no matter how high up the ladder they are.

Roel Loopers

INTRIGUING FREMANTLE COUNCIL BUSINESS

Posted in city of fremantle, local government by freoview on May 21, 2015

When it comes to governments reality is far more intriguing than fiction, as last evening’s Fremantle Council Strategic and General Services Committee showed.

The development process of Cantonment Hill has been less than satisfactory with Council ignoring community consultation to out of the blue considering handing over half of the Signal Station for 20 years to the Fremantle Volunteer Sea Rescue organisation for a peppercorn rent. This was never the suggested intended use for the building, but who cares. If one believes Councillor Josh Wilson we should all be on our knees and thank the lords that someone is willing to take that burden off us because the building would be near impossible to lease to anyone else but the FVSR. Really Josh?

Let’s have a look at it. Moving costs for the FVSR would be some $ 120,000, so divided by ten years that would only be $ 1,000 a month plus outgoings and for that they’d receive two floors in a top spot of Fremantle rent free.

So what about if the COF asked for let’s say $ 1,000-a-month rent per floor instead of handing it over for free to the FVSR? Artists and other creative small businesses are constantly looking for affordable space and the floor space of the Signal Station would allow for dividing the floors in smaller spaces suitable for artists, designers, rehearsal spaces for bands, recording studios, etc, who might then only have to pay $ 250 a month to have a nice studio, office, or work space, but the City has never looked at that option. In pure silliness they advertised for expressions of interest for someone to open a cafe before they even have improved access and amenity up there and of course no one was interested.

Concerned residents and Councillor Rachel Pemberton are rightly worried about a twenty year lease because it will hamper Council from implementing those things that community consultation and the working group want up on Cantonment Hill.

Unbelievable also that an officer’s amendment will have to be added before it goes to full council because several proposals such as an Indigenous Garden had been left out mistakenly. Does anyone check the agenda before it goes to committee?

Cr Pemberton also pointed out the 25-year-lease of Fremantle Oval to the Dockers for just $ 1.00 a year and that the City now can only hope the Dockers will be willing to hand back the oval once they move to Cockburn. It’s a pretty good example that the COF should be very careful with rent-free long-term leases.

Also on the agenda were basketball courts, and a half court will be added to the Esplanade Youth Plaza. The location for a full court at South Beach, after a year of consideration, was not going anywhere last night with the same options in Wilson Park and South Beach still not narrowed down to one or two preferred options. Only the Local Government God will understand why after 12 months all the options were still on the table last night and non short-listed. That is ridiculous and a waste of time.

Chair Andrew Sullivan, who has taken up the fight for the ballers, got a bit irate about that and rightly so, but why was his new option suddenly on the table to put the court just south west of the toilets/kiosk? It sounds good that it is furthest away from residents but the noise of bouncing balls will drive cafe users and staff insane. It is protected from wind and afternoon sun in that location but it would fill up with sand, rain and reticulation water because it is down a slope. Does it really make sense there when it would need maintenance, cleaning and care more often? If one puts it there I suggest to spend extra money to make it into an amphi-theatre that could also be used for music and other events, so the COF does not spend the money to please only less than 3 per cent of the population who play basketball.

A basketball court should be more than just a surface and hoops and also have a BBQ, tables, shade, etc. so the people using it can spend quality time there, so maybe this should go back to the drawing board and community consultation again, especially asking cafe patrons and workers. Put the half court at the EYP asap so that the ballers will have a place to go to, and make a really good quality decision for a full court at South Beach with all the other enhancing features that makes it stand out as a special place for the whole community. Spend a bit more money on it to make it great and multi-functional!

I am intrigued with how council functions and why communication between officers and elected members appears to be so poor at times. As for the public, we are just a box to tick so the Minister can’t say proper process has not been followed. Six weeks, or whatever, of community consultation looks great on paper even when anything that comes from it is ignored.

Roel Loopers

DOES BUDGET PROMISE DEPARTMENT MOVE TO FREMANTLE?

Posted in city of fremantle, state government by freoview on May 15, 2015

I am yet to hear any comments about the Western Australian budget and assets sales in regard to the Department of Housing. Is their building at 99 Plain Street, East Perth on the list of State Government properties for sale? If not, a move by DoH to Fremantle will become even more unlikely, when one considers the financial deficit disaster the Barnett government has put our state in.

Fremantle could be negatively affected in two ways by the budget, with the planned sale of Fremantle Port, and if Housing does not announce a move to Fremantle’s Kings Square in the next few months that development project will be in limbo, because it is highly unlikely it can proceed without a major office tenant.

With estimated office vacancies in Perth projected to reach 25 per cent by the end of the year, and the no doubt offering of more lucrative deals there, a move to Freo’s Kings Square is not going to be a priority for government departments, agencies or corporations I fear. Now let’s hope Sirona Capital and the City of Fremantle will fast implement plan B,C,D…..or whatever and not wait for Godot any longer.

For those who do not understand my reference to Godot. Waiting for Godot is, according to WikiMedia, an absurdist play written by Samuel Beckett in 1953 in which characters Vladimir and Estragon wait endlessly and in vain for the arrival of someone. It is a great play I have seen and photographed a few times and I am alway reminded of it when I think of the stagnant Kings Square development.

What are we doing here, that is the question. And we are blessed in this, that we happen to know the answer. Yes, in the immense confusion one thing alone is clear. We are waiting for Godot to come…”
~ Samuel Beckett, Waiting for Godot

Roel Loopers

INNOVATIVE DESIGN NECESSARY FOR RESIDENTIAL INFILL

Posted in development, fremantle, residential by freoview on May 13, 2015

Canadian urban planning expert professor David Gordon has expressed what many people in Perth’s older established suburbs like Fremantle have been saying for years, that is it not necessary to disturb stable communities with high-density residential development, but that there is a lot of scope to develop along freeways and railways instead, and low-rise shopping centres and industrial areas should also be targets for higher residential development.

Professor Gordon told the Committee for Economic Development of Australia that Perth has the lowest density of a major city he has seen.

Gordon is an urban planning professor from Canada’s Queen’s University and said  the WA Government faces a major challenge meeting its infill housing targets (it set in its 2031 future development papers)

LandCorp chief executive Frank Marra is quoted in the West Australian newspaper saying that developers often only got one chance to get high density living right and one bad design could alienate a community. I believe that is a very good comment, as established communities such as Fremantle want much better design than the bland colourless big boxes that developers can put up relatively cheaply, compared to outstanding and innovative design and building quality. We want development that embraces, enhances and improves neighbourhoods, not the boring mediocre sameness that destroys the ambience of older suburbs by taking their sense of amenity, comfort and unique lifestyle away.

Frank Marra told the West Australian that “The community really latches on with poor outcomes that might have occurred in the past.”

The W.A. government’s latest draft Perth and Peel@3.5 million report sets a target of building 800,000 new homes by 2050. Of that 380,000 are expected to be built through infill.

Here is Fremantle the Knutsford Street area and City of Fremantle Works Depot would be great areas for higher density student living to accommodate Notre Dame uni students, but also those who study at Murdoch and Curtin and who can jump on a bus to get there. It is not even a ten-minute bike ride from there to the CBD and UNDA, and busses come through Amherst and High Street frequently, so it appears to be a pretty perfect location for high-density living, that is also very close to the Fremantle golf course and Booyeembara Park for public open space and relaxation.

My information is that around 70 percent of UNDA students don’t live in Fremantle and I believe that is a real shame because they would bring vitality to our community and support our retailers and the hospitality industry, so Freo should make an effort to keep them in town. It is also something the State’s Landcorp agency should be supporting. Would it for example be possible to sell or lease Notre Dame a chunk of land at a peppercorn price if they were willing to build student accommodation, so that the students don’t have to commute and leave town? It might even be good for the City of Fremantle to consider doing a deal with UNDA on a small part of the Works Depot site as that would be a good investment into Freo’s future and an opportunity to keep a large percentage of the more than 5,500 students in town.

Roel Loopers

A BETTER KINGS SQUARE OUTCOME

Posted in city of fremantle, development, kings square by freoview on May 8, 2015

KS 1

The Kings Square development project between the City of Fremantle and Sirona Capital has been receiving a lot of negative news and there is also frustration in the community about the delay of it, which is hampering the revitalisation of the CBD, but is it all bad news because the project appears to be in limbo?

I personally believe that the community could get a better development outcome at Kings Square if the development partners have to find alternative solutions if the Department of Housing does not commit to relocating to Fremantle.

My preferred development from the very beginning, when community consultation was happening, was a residential and hotel component for our civic square. I believed then and still do now that Kings Square needs 24/7 activation and I don’t believe that can be achieved with just retail and commercial office development, so a forced re-thinking of the project and looking for alternative solutions could well result in a better and more vibrant development than the one that has now been on ice without much progress for three years.

It is simplistic to believe a huge development like this will happen over night, but we all fear that Freo might slide down further,  hence community anxiety about it all.

Roel Loopers

START SUPPORTING FREO, COLIN BARNETT!

Posted in city of fremantle, development, kings square by freoview on May 6, 2015

Interesting to see the mainstream media have finally given attention to the Fremantle Kings Square project community concerns with an article in the West Australian today about the extensive media release by CEO Graeme McKenzie. Here a quote from it:

In an unusual move, Fremantle chief executive Graeme Mackenzie yesterday released a statement on the integrity of the Kings Square business plan, including the valuations of city-owned assets.

He also expressed frustration at the Government’s failure to commit to the Housing Department’s move and revealed the council was planning for “alternative structures” in case it did not happen.

“Sirona Capital has to date invested significant time and energy working through Government processes to obtain that commitment to this project,” Mr Mackenzie said.

“If that . . . (or a viable alternative anchor tenant) can’t be obtained in the next 12 months, this project in its current structure will fall over.

“This is clearly understood by the city and we will be planning for alternative structures during this time to ensure we’re prepared should such a scenario eventuate.”

I want to make it clear that no one I know wants the Kings Square project to fail and not go ahead, so it is time for the Fremantle community to start putting public pressure on the Barnett government and tell them to support the City of Fremantle’s revitalisation efforts. It is not acceptable that the State Government is Perth and country centric but does very little for the state’s second city. Tiny country towns get more attention from the Liberal/National government than the major port city and that is not on!

We are not asking for much, just that a major State Government department will be moved to Fremantle as part of the decentralisation moves and the creation of satellite cities around Perth. Fremantle should be a priority for that, not a second thought!

One also needs to question Sirona Capital though who have been trumpeting that they had other options and were not dependent on the Department of Housing moving into the former Myer building for the development at Kings Square to go ahead. That is clearly not true and it now looks as if the whole development might have to change drastically-and maybe have a residential component?-to make it viable. This would possibly mean more delay as new planning approval would have to be thought if the buildings would change from commercial/retail to commercial/residential/retail.

Twelve months is not a long time and the Fremantle want to see progress and activation at Kings Square.

Roel Loopers

FREMANTLE’S CEO DETAILED KINGS SQUARE REPLY

Posted in city of fremantle, kings square, local government by freoview on May 5, 2015

Last week the media officer of the City of Fremantle berated me for having criticised the response in the Fremantle Gazette by CEO Graeme McKenzie on the Kings Square financial concerns raised by Freo residents and asked why I had not waited for the full response. It is with great surprise and dismay then that today I have to find out in the Fremantle Gazette that the CEO has put a very lengthy justification for the project on the City’s website. The CoF is always keen to email me info I can promote on my blog, so why not also send me the full response of the CEO to the questions raised? Someone is playing silly buggers at the City, but one can never attack me for not trying to be balanced and fair on this blog, so here is the CEO’s full response that I had to lift off the COF website:

Kings Square Business Plan – response to community concerns Background/context

There has recently been some public debate questioning the integrity of the City of Fremantle’s Business Plan for the Kings Square Project. The business plan was released for public consultation in 2012 and signed off by the council in February 2013. In an attempt to answer the questions raised it is necessary to understand the project.

Issue 1 – the approach The Kings Square project involves the redevelopment of Queensgate Centre and Car Park, Spicer site, and Council administration centre facilities, including the public realm around the Square. Including the Myer building, this project has an estimated value of $220 million. It will provide approximately 12,000 square metres of retail space and 30,000 square metres of commercial office space. To put that into context, the current City administration and library is about 5,000 square metres.

There were a number of factors that contributed to this project being established: • The general decline in office and retail space in Fremantle • The Myer building had recently been purchased by Sirona Capital and Myer had indicated its intention to leave Fremantle (which it ultimately did) • Hoyts had advised the City that it would not renew its lease at Queensgate because of significant financial losses from this operation (it too has vacated) • No other cinema chain was prepared to take on the Queensgate cinemas because of the cost of refurbishment and adaptation to operate digitally • The council had a position of replacing its facilities (adopted in 2004) • The state government announcement that the Department of Housing would be relocated to Fremantle • The threat of local government amalgamations that could potentially have seen Fremantle merged with Melville and the administrative offices for the new entity to be located outside of the Fremantle CBD (further weakening the economy of Fremantle) After considering other options to guarantee a good development outcome to address these issues, the City determined that the best outcome could be achieved through a fully integrated development, rather than separate the development into segments. We were very aware of the risk that an open market sale of City property may not lead to a redevelopment of some or all properties. The City was seeking an agreement that could guarantee that the total development would occur before it relinquished complete control of its property. In order to achieve that outcome the project needed to be a fully integrated development. Making each component interdependent was agreed as the best way to achieve the integrated development outcome.

The project ideas were then progressed through an MOU with Sirona, to allow exploration of how a fully integrated development could occur. Having reached some level of agreement of principles the City then commenced more detailed planning through the business plan process. There has been a suggestion that the City should have completed separate business plans for each property disposal and the redevelopment of the City’s facilities.

The above explains the City’s approach and the reasons for one business plan. Local Governments are required to prepare business plans when undertaking certain activities, a project of this size that involves the disposal of land being one of those activities.

The City’s Business Plan released for public comment in November 2012, explicitly states in the very beginning of the document at item 1.1: “The project vision is to instigate a generational re-investment of the City’s community, civic and administrative facilities and underpin economic development and the urban environment. Fundamentally this involves: a.

The City’s proactive role as a major anchor and catalyst through the staged re-investment of its library, civic, tourism and administration facilities (on its Kings Square land holding) b. Funded via the sale of strategic (non-core) sites to a third party commercial partner with the capability and experience to deliver mutually beneficial and complementary economic development anchors in a timely manner c. Reposition the Kings Square precinct as an iconic public realm centrepiece of the Fremantle CBD.” The business plan was very clear about what was being proposed.

Issue 2 – release of the business case for scrutiny In preparing the business plan for public release, the City engaged independent consultants, Leedwell Strategic, who had undertaken similar work in South Australia for both state and local governments. A business case was prepared for the City to assist in the preparation of the business plan. The business plan is what is required to be released for public comment, not the working papers which are essentially what the business case is. The business plan that was released was a comprehensive 56 page document containing much more information for public scrutiny than required by the Local Government Act for a local government business plan. The business case is not available for release to the public as it contains (still) commercially sensitive detailed information and although the content is the property of the City of Fremantle, the construction of that business case has intellectual property value for the consultant who prepared it for the City.

Issue 3 – Investment reserve funds There has been some speculation that the City is in breach of the Trustees Act by utilising investment reserve funds for this project. Firstly, the Trustees Act does not apply to local government public projects. Secondly, the City’s Investment Reserve Fund Policy is a policy created by council. It has no higher statutory authority than a guidance document created by council for council.

Issue 4 – Net Present Value (NPV) assessment and business plan assumptions The biggest area of debate relates to the City’s NPV analysis. The NPV is a resultant calculation after a number of inputs and is designed to test the value of money in a long-term transaction. The confusion about the Kings Square Project NPV is based on some assertions that: a. the discount rate is not justified b. council facilities values should not be included c. the valuation of the Queensgate building is incorrect. An NPV analysis is subject to the input assumptions – if the assumptions change the NPV changes. The following provides the assumptions used by the City in calculating the NPV. Issue 4a – Discount rate A discount rate is the rate used to discount future cash flows to the present value – and is a key variable in an NPV assessment. The rate used by the City in the business plan was 5.5%, arrived at by applying 4% (being the long term borrowing rate for local governments) PLUS a 1.5% risk margin. The discount rate aims to fundamentally reflect two variables namely: a. the risk of the timing of cash flows b. the risk in the quantum of cash flows. The consultant (Leedwell Strategic) that prepared the business case advises – “In other projects we have undertaken for state and local governments the discount rate adopted is generally in the range of 1%-1.5% margin over opportunity cost of funds (long term)”. The City elected to adopt the high end of this risk range, reflecting the conservative nature of the assessment. The local government long term borrowing rates have decreased since this business plan was prepared. Assuming all other inputs are equal, an NPV assessment done using today’s inputs would actually be more positive than it was at the time it was undertaken in 2012. Issue 4b – Inclusion of council asset values This issue has the greatest impact on the NPV calculation. The debate centres on whether the City’s buildings should be included in the NPV assessment since they are non-commercial. The reason the City’s facilities should be included is because they are on freehold land and the building has both a real and accounting value. The land value has not been included in any NPV assessment so there is no growth factor applied to the land value, however the buildings have: a real value – because the City could sell this asset (albeit highly unlikely) and decide instead to lease property for its administration, library etc. (It would then be faced with commercial leasing costs). The City’s facilities will also have retail and commercial spaces for lease, providing the City with a revenue stream through rent. an accounting value – because the value of this asset MUST be included in the City’s balance sheet. To not do so would be in breach of Australian accounting standards.

There is also some recent public debate that the value assigned to the City’s buildings on the 20 year horizon was inflated. The value of the City buildings at completion (without land value) was estimated at $44.75m. The value in 20 years was assessed at $97.23m, calculated by applying a 3.5% price indexation rate each year. The City believes this figure is conservative given that historically property prices increase at better than CPI. The business plan includes an appropriate annual maintenance charge for the facilities to ensure they are kept in good condition and therefore retain their value. Just think about your own house – it has probably increased in value by something closer to 7% per annum (cumulative) over the past 20 years, so again a 3.5% growth in value is very much at the conservative end of the estimates. Issue 4c – Queensgate building valuation There is an understandable argument that selling the Queensgate building for the valuation price of $6.35m is undervaluing this asset. If this asset was a fully functioning and performing asset I would absolutely agree. In fact it took elected members and staff a long time to come to terms with this valuation. It is true that the City could have put the building on the market in an “as is” state and possibly got a better value, however it would have been highly unlikely it would have been redeveloped, undermining our whole vision for an integrated redevelopment of the area. And whilst the rental returns at the time suggested the property value was much higher, Hoyts who had the lease for the Queensgate Cinemas were seeking to relinquish their lease. That lease provided a very significant part of the revenues for this building and the loss of that lessee significantly impacted on the rental returns, which in turn decreases the value of the property. The City had discussions with three other major cinema chains to determine whether it could attract another cinema tenant in the existing space. Unfortunately none showed any interest at all in the current space, given its age and structure, and lack of adaptability for digital projection.

The City then spent a lot of time exploring a refurbishment of the existing building to open up the opportunity for a wider range of tenants, including office tenants. However, since nearly 60% of the floor plate of this building is the cinema space – and that space does not have a flat floor (it has an angled concrete floor) any refurbishment would require demolition of a substantial part of the building. That scenario was tested rigorously by the City, but the valuation under that scenario was assessed at $6.4 million by professional valuers (CBRE). That is only $50,000 more than a total demolition valuation which the City assessed ultimately as the better option.

Issue 5 – Tier assumptions Although not specifically raised as an issue, it is important to reiterate to the community that the City’s business plan was prepared on a conservative basis with a very low risk appetite. The City is well aware that it is investing hard earned ratepayer funds into a revitalisation project and council needed to be assured that this project was a project that would not have a detrimental effect on future generations of ratepayers. In undertaking the NPV assessment, the City included all tier 1 (direct) costs and revenues associated with this project. It also included tier 2 costs and revenues (indirect but clearly identifiable, such as future rate revenues from redeveloped properties). What is not included are any tier 3 revenues resulting from a general uplift in the economy from this project. Successfully implemented, this project will deliver a significant uplift in the local economy which means additional new businesses open, values generally go up and the City rate base is significantly improved as a result. What we know from the Myer departure is that the retail sector in Fremantle has suffered a downturn in business that is averaging around 15%. This project aims to reverse and improve that situation.

Issue 6 – Timing delays This is an area that is frustrating for all of us. That frustration emanates from a lack of state government commitment to its announcement in 2011 that the Department of Housing would be relocated to Fremantle, occupying around 20,000 square metres of office space and bringing over 1,000 workers. Sirona Capital has to date invested significant time and energy working through government processes to obtain that commitment to this project. If that (or a viable alternative anchor) can’t be obtained in the next 12 months, this project in its current structure will “fall over”. This is clearly understood by the City and we will be planning for alternative structures during this time to ensure we’re prepared should such a scenario eventuate. In the meantime the delays, whilst frustrating, do not mean the business plan has unravelled. The business plan has risk and escalation (CPI) factored into the plan and as noted above, the fact that the borrowing rate has decreased since the plan was prepared actually supports an improved financial outcome. It is true that the City has lost some lease revenue from the vacated tenancies in Queensgate as a result of the delays, but this has been in a large part offset by non-refundable deposits from Sirona totalling $400,000.

Issue 7 – Debt funding There has been some speculation about how the City will fund its portion of the development and what the implications of this will be on ratepayers. The business plan indicates the City will need to borrow about $15 million to fund its portion of the completed project. It is anticipated that the revenues from the project (eg retail and surplus office space income) will service a significant part of this debt. Although the 10 year financial plan, which takes into account the Kings Square Project’s financial implications, doesn’t show any above average increase in rates over the cycle, future councils may decide to increase rates by a small amount to accelerate repayment or it could apply funds from the sale of other assets to reduce or retire the debt. As has already been mentioned there will also be an organic uplift in rates that will occur as properties in Fremantle (including those as part of the Kings Square Project) are developed and improved in the Fremantle CBD which will help to further reduce this gap. As the business plan notes, the impact on the City’s overall financial position is relatively minor. Summary The City approached the business plan with the utmost conservatism, but never shied away from the fact that it was disposing of three properties and using the proceeds to redevelop its own facilities. This is to be a catalytic project that will provide Fremantle with a much needed economic boost through increased retail and commercial activity. Most importantly, it is an integrated project, deliberately structured this way to guarantee all properties are developed as envisaged for the maximum benefit of the community. It would be a very poor outcome to separate these disposals on purely commercial grounds, accept the price from the highest bidder, and not see any development. This project is not unlike the City’s Point Street project that will see the Hilton Hotel chain on the former City site in Adelaide Street with other retail and residential uses. That project has taken eight years to get to its current stage of development. We are keen to get this one going much quicker because Fremantle really can’t afford to stagnate any longer.

Graeme Mackenzie Chief Executive Officer City of Fremantle

FINANCIAL REVIEW REPORTER LOVES FREO DEVELOPMENT

Posted in city of fremantle, development by freoview on May 4, 2015

Financial Review journalist Samantha Hutchinson has written a gushing report on development in Fremantle, and while it is always good to read and hear positive reports about good old Freo one would have expected a bit more research from the young reporter.

The article starts glowingly “A swag of retailers have opened their doors in Fremantle as the port town’s development swells to more than $ 1 billion.” 

I won’t publish the whole article here but you can read it for yourself: http://www.afr.com/real-estate/fremantle-attracts-more-tenants-with-1bn-pipeline-20150503-1msp6n?stb=twt

But a few important paragraphs from the Financial Review article below about the very-important and very-welcome Silverleaf and Sirona Capital investment in Fremantle:

Silverleaf Properties, a property group owned by Gerard O’Brien, is midway through a $16.5 million upgrade of Fremantle’s Atwell Arcade and is also in the process of gaining approval for an update of the iconic Fremantle Woolstores Shopping Centre.

Mr O’Brien’s group has shelled out more than $80 million in the past three years, snapping up prime sites including Atwell Arcade, the Target building and the Fremantle Woolstores, for which it paid about $50 million in late 2014.

In addition, Sirona Capital’s $220 million Kings Square development in Fremantle is being built by Leighton. Sirona has also funded the $97 million conversion of the Dalgety Woolstores apartment project known as Heirloom at a heritage-listed building on Queen Street.

No word from the reporter on the delay of the Kings Square project and the questions asked about it in Parliament and the media, so one wonders how well informed she is about Freo. The Heirloom project is in Queen Victoria Street and not Queen Street for example, and Leighton is not yet doing any building at Kings Square.

Roel Loopers

FREMANTLE QUARTERLY REPORT # 1

Posted in city of fremantle, local government by freoview on May 1, 2015

This is from the on-line Fremantle Quarterly Report:

The Kings Square project is an integrated redevelopment of key sites in Fremantle’s Kings Square precinct.

In order to progress the redevelopment, the City is currently awaiting confirmation from the State Government to move a major department to Fremantle. Recent discussions have been positive and the City hopes to have a decision shortly.

In response to media coverage and parliamentary questions regarding the Kings Square business plan, the City is planning to release a statement to address recent concerns. The City has been fully transparent in its planning for the Kings Square Project and is in contact with the Department of Local Government to provide the Minister with all required information for his parliamentary response on the project.

The $220m project includes the redevelopment or refurbishment of a number of properties currently owned by the City of Fremantle and the former Myer building owned by Sirona Capital Management. The project will create a civic, retail, commercial and community hub that is a vibrant, active and safe place which reflects Kings Square’s unique place in the heart of Fremantle.

For more information, including an image gallery of the proposed civic, library and administration building visit the City’s website.

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