Item No.	Item Title	Page No.
6	Ipswich Central Redevelopment Governance	3

Economic Development Committee

Meeting Agenda

3 December

2019

Doc ID No: A5918110

The Chairperson has determined this matter is of real urgency and approval has been given to refer this report to the Economic Development Committee as a late item.

ITEM: 6

SUBJECT: Ipswich Central Redevelopment Governance

AUTHOR: General Manager - Coordination and Performance

DATE: 22 November 2019

Executive Summary

This is a report concerning the governance arrangements for the Ipswich Central Redevelopment Project.

This report recommends that Council adopt a governance structure for the project which includes a Retail Precinct sub-project steering committee with a remunerated independent Chairperson with relevant commercial, retail development and operations experience.

The proposed governance structure is designed to ensure that the Ipswich Central redevelopment is delivered in a transparent, effective and efficient manner to enable the project to achieve the objective of an activated and commercially successful central business district.

Recommendation/s

That the Interim Administrator of Ipswich City Council resolve:

A. That Council adopt the proposed governance structure for the delivery of the Ipswich Central redevelopment project as detailed in this report.

B. That Council approve the draft Terms of Reference for the Retail Sub-Project Steering Committee, as attached to this report.

RELATED PARTIES

There are no known conflicts of interest in relation to this report.

Advance Ipswich Theme

Strengthening our local economy and building prosperity

Purpose of Report/Background

Ipswich City Council is currently undertaking a major redevelopment of the various Council-owned properties in and around Nicholas Street within Ipswich Central. The redevelopment includes a core Council assets of a civic precinct, a community library and a new Council Administration building. The redevelopment also includes a number of retail and commercial assets owned by Council, which, when fully developed and leased to private sector entities, will comprise retail, cinemas, food / beverage and commercial buildings. For ease of reference, Table 1 below has been included to clearly identify the various Council owned assets in the precinct.

A construction manager, Hutchinson Builders, has been contracted by Council to deliver the Civic Precinct, community library and Council Administration building. These components of the Ipswich Central redevelopment are integral to the operations of Council and are intended to be retained in long-term Council ownership. The adjoining retail, commercial and entertainment assets owned by Council are largely currently vacant in advance of redevelopment.

On 28 October 2019, Council endorsed a development and divestment strategy for the retail and commercial assets that was informed by a market sounding and financial analysis conducted by KPMG. KPMG’s analysis was based on extensive investigations by various professional firms including Ranbury Management Group, Urbis, Brain and Poulter, WSP, RLB, McKenzie Group and Savills.

The endorsed development and divestment strategy adopted by Council on 28 October 2019 recommended that Council expend funds to develop the retail, commercial and entertainment assets in a staged approach designed to achieve the key objectives of the Ipswich Central redevelopment. The report advised that the KPMG review identified that Council will most likely need to hold and operate these non-core assets to demonstrate that they are an ongoing commercial success in order to divest the assets and maximise the return on investment for Ipswich ratepayers. In other words, Council needs to “prove up” these assets for a year to two as a vibrant inner city precinct in order to demonstrate a value proposition for private sector investors. Any earlier sale of the assets would probably be at a lower price due to current investor market uncertainty.

With the endorsement by Council of this new development and divestment strategy, it was timely for Council to re-examine the governance structure for the Ipswich Central redevelopment project.

Ipswich Central Redevelopment Project Governance Structure

In October 2018, Council obtained advice from Queensland Treasury Corporation (QTC) in relation to the most appropriate project governance arrangements for the Ipswich Central redevelopment. This advice is included as Attachment 1 to this report. QTC recommended the establishment of a Project Steering Committee comprised of a Chairperson with appropriate property development or construction experience, the internal project manager, an independent / external to Council commercial advisor, the CEO of Council and a Council finance representative.

Existing Ipswich Central Redevelopment Steering Committee

Council subsequently established a Project Steering Committee to fulfil this function. At present, this steering committee is currently comprised of the Chairperson Mr Steve Greenwood (a member of the Interim Management Committee during this period of Interim Administration), the Council CEO Mr David Farmer and the Council’s General Manager of Corporate Services. This project steering committee is functioning effectively in relation to the construction and project management aspects of the Ipswich Central redevelopment and it is not advised that any changes are required to the composition or function of this steering committee at this stage, which reports through to Council on a monthly basis.

Proposed New Governance Structure for the Ipswich Central Redevelopment Project

With the adoption of the new retail and commercial development and divestment strategy, the existing Ipswich Central Redevelopment Steering Committee has recommended that an additional Retail Steering Group be established.

The steering committee has identified that the current membership of the committee does not have appropriate expertise in relation to the marketing, leasing, contractual and operational aspects of a retail and commercial precinct. The steering committee has recommended that Council establish the Retail Steering Group and conduct recruitment for a remunerated independent Chairperson and members with experience in the development and operation of a retail / commercial precinct.

The remuneration for these positions will be consistent with the Queensland State Government “Remuneration Procedures for Part-Time Chairs and Members of Queensland Government Bodies” (Attachment 2).

In essence, the proposed Retail Steering Group will consist of independent industry experts plus the Council CEO and will oversee the marketing, leasing and redevelopment of the non core Council civic assets. The Group will report to the current Ipswich Central Redevelopment Steering Committee and hence to full Council. The Retail Steering Group will apply its members’ collective expertise to consider and recommend to Council the terms and conditions of the various leases, licences and sale of the non core Council properties.

It is noted that this governance membership structure reflects that recently endorsed by the Moreton Bay Regional Council for “the Mill” redevelopment at Petrie, which was also informed by QTC advice.

The proposed Terms of Reference for the Sub-Project Steering Committee are attached to this report and submitted to Council for approval.

Legal/Policy Basis

This report and its recommendations are consistent with the following legislative provisions:

Local Government Act 2009

RISK MANAGEMENT IMPLICATIONS

There is significant financial and reputational risk to Council associated with the Ipswich Central redevelopment project. There is additional financial and reputational risk for Council in the development and then ongoing operation of the retail and commercial assets that needs to be managed. The proposed governance structure, with the creation of a Retail Steering Group with appropriately qualified and experienced independent Chairperson and members, will act as an effective control measure to manage this risk.

Financial/RESOURCE IMPLICATIONS

The remuneration of an independent Chairperson and members in accordance with the Queensland State Government “Remuneration Procedures for Part-Time Chairs and Members of Queensland Government Bodies” has a minor financial implication for the organisation.

COMMUNITY and OTHER CONSULTATION

Queensland Treasury Corporation have been consulted in relation to this report.

Conclusion

The endorsement of the revised proposed governance structure for the Ipswich Central Redevelopment Project will enable Council to appropriately manage the risks associated with the project.

Attachments and Confidential Background Papers

1.	Queensland Treasury Governance Report ⇩
2.	Remuneration Procedures for Part-Time Chairpersons ⇩
3.	Sub-Project Steering Committee Terms of Reference ⇩

Sean Madigan

General Manager - Coordination and Performance

I concur with the recommendations contained in this report.

Greg Chemello

Interim Administrator

“Together, we proudly enhance the quality of life for our community”

Economic Development Committee

Meeting Agenda

3 December

2019

Item 6 / Attachment 3.

IPSWICH CITY COUNCIL IPSWICH CENTRAL

RETAL SUB-PROJECT STEERING COMMITTEE TERMS OF REFERENCE

1. ESTABLISHMENT

Council has recently approved to proceed with Ipswich Central as a key part of the rejuvenation of the CBD of Ipswich. Council has also approved a development strategy for the Council owned retail and commercial assets contained in the precinct. This development strategy will require Council to develop the assets, secure tenants and to operate the retail and commercial assets for an extended period, prior to selling these assets.

The current Ipswich Central Project Steering Committee has recommended that this retail sub-project steering committee be established to provide strategic direction to Council in relation to the development and operations of the retail and commercial assets.

2. SUPPORTING LEGISLATION AND POLICY

The Sub-PSC is not a formal Committee of Council in accordance with Section 264(1) of the Local Government Regulation 2012. However, the Sub-PSC has been approved by Council as a key part of the governance framework required for the delivery of Ipswich Central.

3. PURPOSE

The purpose of the Sub-PSC is to provide for the governance and strategic direction for the planning, development and delivery of the retail and commercial assets included in Ipswich Central.

More specifically, the Sub-PSC will;

· Provide oversight to all aspects of project delivery for the retail and commercial assets. This will include the endorsement of strategic documentation such as masterplans, business cases, major procurement activities, tenancy agreements and divestment strategies required for key approvals by Council;

· Ensure alignment to the objectives of the Ipswich Central Redevelopment project;

· Identify and manage strategic risks to the program;

· Provide a stabilising influence so organisational concepts and directions are established and maintained with a long term visionary view;

· Ensure appropriate reporting and reviews are in place to provide confidence and transparency in the delivery and operation of Ipswich Central retail and commercial assets

4. SCOPE AND LIMITATIONS

The Sub-PSC will overview major program and project elements such as:

• Prioritise project objectives and timing.

• Management of project scope.

• Budget review and reporting

• Risk Management strategies

• Project governance

• Oversee stakeholder management and change management programs.

• Review and endorse project plans.

• Monitor progress against approved plans including scope, budgets, programs and assist with strategies to mitigate or take corrective action as necessary

Scope of Sub- PSC Approvals:

• The PSC’s role is to develop the strategy and high-level processes required to ensure that the Project Objectives approved by Council are delivered.

• In making such determinations, the committee will be bound by the policies and decisions of Council.

5. AUTHORITY/ DELEGATION

· The Sub-PSC has no delegated financial approval and is subject to the normal approval policies and processes of Council. It is noted that individual members of the Sub-PSC may have delegated authority to commit and direct action and any such action would need to be clearly delineated from the operations of the Sub-PSC.

· Council may approve the delegation of certain approvals or procedures to the Sub-PSC and these would need to be specifically documented on a case by case basis.

6. ROLES AND RESPONSIBILITIES

The role of the Sub-PSC is to:

• Ensure that a clear vision, objectives and scope are developed and articulated for Ipswich Central retail and commercial program of work.

• Overview the program and progress.

• Ensure appropriate resources are allocated to facilitate project delivery - recommend appointment of key project resources and confirm their objectives and responsibilities.

• Ensure provision of the required resources for planning and delivery of the program.

• Ensure that projects’ scope aligns with the requirements of the Council approved Project Objectives.

• Provide those directly involved in the project with guidance in relation to delivering the strategic objectives of the project.

• Address major issues which could materially impact the project.

• Ensure project scope is managed and any changes documented

• Report on program and project progress as required to Council.

• Monitor and review of the program at regular Sub-PSC meetings.

• Resolve or assist to resolve issues outside the authority of the project team such as priority setting, decision-making, and resources commitments that cross organisational boundaries and require agreement from senior stakeholders.

• Review, consider and endorse key project deliverables.

7. MEMBERSHIP

Membership of the PSC is as follows;

· Independent Chairperson (requires an appropriate level of retail and commercial property development and operations

· Council General Manager Finance and Corporate Services or Finance Manager

· Program/Project Director

Any additional or replacement members to the Sub-PSC shall be nominated by the Sub-PSC for approval by the Ipswich Central PSC.

8. ROLE OF COMMITTEE MEMBERS

It is intended that the Sub-PSC leverage the experiences, expertise, and insight of key individuals.

Sub-PSC members are not necessarily directly responsible for managing project activities but provide support and guidance for those who do.

Thus, individually, Sub-PSC members should:

• Understand the Strategic Project Objectives;

· Understand the strategic implications and outcomes of initiatives being pursued;

· Appreciate the significance of the program for all major stakeholders;

· Be genuinely interested in the initiative and be an advocate for broad support for the outcomes being pursued in the project;

· Have a broad understanding of project management issues and approach being adopted. In practice, this means the Sub-PSC through regular meetings and reporting:

· Review and understand the status of the retail and commercial aspects of the project;

· Ensure the projects’ outputs meet the requirements of Council and key stakeholders;

· Help balance conflicting priorities and resources;

· Provide guidance to the project team and users of the project's outputs;

· Consider ideas and issues raised, and provide guidance accordingly;

· Check adherence of project activities to standards of best practice both within the organization and in a wider context;

· Foster positive communication outside of the project team regarding the project's progress and outcomes;

· Report on progress to the Project Steering Committee.

8.1 APPOINTMENT OF CHAIRPERSON

The Chairperson is nominated and appointed by Council.

8.2 ROLE OF CHAIRPERSON

The role of the Chairperson is to chair the meetings, lead the Sub-PSC in its operations, and represent the Sub-PSC as required.

8.3 ADMISSION OF NON-MEMBERS TO DEBATE

Representatives from key contractors and consultants should be invited to attend meetings as required to provide progress updates on relevant projects.

9. MEETINGS

9.1 CONDUCT

Sub-PSC meetings shall be conducted in a professional manner and in accordance with

Council’s Code of Conduct.

9.2 FREQUENCY AND LOCATION

Meetings will be held monthly with additional meetings scheduled as necessary and will be hosted at the offices of Ipswich City Council or as advised otherwise.

9.3 VOTING

• A consensus vote is required for decision making purposes.

• A proxy maybe nominated by a member to attend a meeting if the member is unable to attend.

• The Chair will be informed of the substitution at least 5 working days prior to the scheduled nominated meeting.

• The nominated proxy shall provide relevant comments/feedback of the meeting to the member they are representing.

9.4 QUORUM

· A minimum number of 2 Sub-PSC members are required for decision-making purposes.

9.5 CONFLICT OF INTEREST

Sub-PSC members are required to declare any direct or perceived conflict of interest to the Chairman. In addition, members will be required to complete the Council’s Conflict of Interest declaration.

9.6 REPORT DISTRIBUTION

All reports will be distributed to the members of the Sub-PSC.

10. REPORTING GUIDELINES

The Sub-PSC will determine and agree to the specific content of reports required.

A standardised reporting regime will be adopted that defines the information and frequency of reporting between the;

· The Sub-PSC and the PSC

Papers required for preparation will include;

· Agendas

· Minutes

· Monthly reports

· Any submissions for information

· Any submissions for consideration and approval of the committee

The Secretary will be responsible for the recording, collation, and distribution of the abovementioned documents.

· Minutes will be circulated 1 week following the meeting following approval from the chair of the meeting.

· A monthly report will be prepared and circulated generally in the 3^rd week of the month week prior to the meeting.

· Any items of new business should be lodged with the Secretary no later than 3 days prior to the meeting.

· Any formal submissions should be circulated with the meeting papers 3 days prior to the meeting.

11. REVIEW AND PERFORMANCE EVALUATION

11.1 TERMS OF REFERENCE

It is proposed to review these Terms of Reference 6 months from initial adoption