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Council Meeting Agenda |
28 July 2020 |
The Chairperson has determined this matter is of real urgency and approval has been given to refer this report to the Council as a late item.
ITEM: 15.4
SUBJECT: Disposal of Council Administration Assets
AUTHOR: Property Services Manager
DATE: 27 July 2020
Executive Summary
This is a report concerning the disposal of Ipswich City Council assets to West Moreton Hospital and Health Service (WMHHS).
As part of the Central Business District (CBD) re-development project, Council will vacate its current administration buildings along South and Roderick Streets and move all staff from these buildings to the new building in the CBD, once completed. These buildings will be surplus to Council’s requirements and WMHHS will purchase the assets.
A. That 82 Limestone Street, Ipswich, described as Lot 1 on RP2868 and 3 Foote Lane, Ipswich, described as Lot 3 on SP197463 (“the land”), be declared surplus to Council’s needs and that the valuable non-current assets be disposed of.
B. That Council apply the exception under section 236(1)(b)(ii) of the Local Government Regulation 2012 (Qld) (Regulation) and dispose of the valuable non-current assets being 82 Limestone Street, Ipswich, described as Lot 1 on RP2868 and 3 Foote Lane, Ipswich, described as Lot 3 on SP197463 (“the land”) directly to West Moreton Hospital and Health Service as a “Government Agency”.
C. That pursuant to section 236(3) of the Local Government Regulation 2012 (Qld) (Regulation), Council dispose of the valuable non-current assets at equal to, or more than, the market value of the land and buildings.
D. That pursuant to section 257(1) of the Local Government Act 2009, Council delegate the power to the Chief Executive Officer to authorise, negotiate and finalise the terms of the sale of the land to West Moreton Hospital and Health Service, to be executed by Council and to do any other acts necessary to implement Council’s decision.
RELATED PARTIES
There are no conflicts of interest to declare in relation to the matters which are the subject of this report. The parties entered into a Probity Plan that dictated the terms of communication on matters relating to the negotiation of the transaction.
Advance Ipswich Theme
Managing growth and delivering key infrastructure
Purpose of Report/Background
Council’s existing administration and library services are being relocated to new purpose-built facilities in the Ipswich CBD. The relocation will result in the existing Council administration buildings in the South Street precinct being vacated and surplus to Council’s requirements. WMHHS expressed an interest in purchasing the buildings from Council for the expansion of health services in Ipswich, which included the following properties as part of the sale;
· Lot 2 on CP864211 - Administration Building and Humanities Building - 50 South Street, Ipswich (includes 56 South Street and 45 Roderick Street)
· Lot 1 on CP864211 - Ipswich Global Information Centre - 40 South Street, Ipswich
· Lot 3 on RP864195 - Ancillary car park - 69 East Street, Ipswich
· Lot 2 on RP2875 - Ancillary car park - 71 East Street, Ipswich
· Lot 1 on RP2875 - Ancillary car park - 37 Roderick Street, Ipswich
· Lot 3 on RP51850 - Ancillary car park - 39 Roderick Street, Ipswich
· Lot 10 on RP150792 - Hayden Centre - 37 South Street, Ipswich
In a report to the City Management, Finance and Community Engagement Committee on 19 June 2018, these properties were declared surplus to Council’s requirements and the decision was made that the exception applies under the Local Government Regulation 2012 to dispose of the properties to a Government Agency. Through the negotiations, the parties agreed to the below properties as additional to the transaction and these properties are surplus to Council’s requirements:
· Lot 1 on RP2868 - Carpark, 82 Limestone Street, Ipswich
· Lot 3 on SP197463 - Carpark, 3 Foote Lane, Ipswich
A Memorandum of Understanding was executed between Council and WMHHS on 14 June 2018 (see attached). The terms of the sale were negotiated between the parties and finalised through a Heads of Agreement executed on 18 October 2018 (see attached) and this was subject to valuation assessments completed by both parties. The valuations were reassessed in 2020 and the parties have negotiated and agreed on a finalised sale amount with WMHHS, which is detailed in the attached confidential briefing note.
The final terms and conditions of the contract of sale are being finalised and once a resolution is adopted by Council the parties will execute the contract with WMHHS.
Legal/Policy Basis
This report and its recommendations are consistent with the following legislative provisions:
Local Government Act 2009
Local Government Regulation 2012
RISK MANAGEMENT IMPLICATIONS
Once the Contract of Sale is signed and executed by the parties, the settlement of the transaction will occur at the date of the practical completion of the new administration building in the CBD. There are some risks associated with meeting the requirements of the Contract of Sale up until the settlement date, including:
Conditions Precedent – There are terms and conditions binding in the contract that will need to be met prior to the settlement of the transaction. Considered a medium risk. Please see confidential attachment.
Encroachments – A number of the assets are encroaching on neighbouring properties and these will need to be resolved by Council prior to settlement. This is considered a medium risk.
Date of Settlement – The settlement date will be the practical completion of the new administration building and there is some flexibility with this date should the practical completion date change. This is considered a low risk.
Vacating Tenants – All existing tenants will be provided with a date of termination of the agreement well before the settlement date. However, if they do not vacate the tenancy Council will need to take action to remove them. This is considered a medium risk.
Financial/RESOURCE IMPLICATIONS
The sale price for the assets as agreed between the parties is outlined in the confidential briefing note attached.
COMMUNITY and OTHER CONSULTATION
Given that there is a Probity Plan in place, only nominated Council officers have been involved in the negotiations with WMHHS and this has consisted of the Legal and Governance Branch and the Coordination and Performance Department. When required, the Infrastructure and Environment Department and the Planning and Regulatory Services Department have been consulted for input and information on certain matters.
Conclusion
Council and WMHHS have agreed to the final sale price following the negotiation of valuation assessments completed by both parties. It is recommended that Council approves the disposal of the assets to WMHHS and that the terms of the contract be finalised and the contract be executed.
Attachments and Confidential Background Papers
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Previous Committee Report - June 2018 - Declaration of
Properties Surplus to Futue Council Requirements ⇩ |
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CONFIDENTIAL |
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Brett McGrath
Property Services Manager
I concur with the recommendations contained in this report.
Sonia Cooper
General Manager Corporate Services
“Together, we proudly enhance the quality of life for our community”
