Sale of Rigby House for $11.75m on CHCC agenda this Thursday

Council’s Management Executive have tabled an $11.76m offer for Rigby House this in Thursday’s Council meeting agenda and have recommended it be accepted as a ‘fair and reasonable’ price ‘in line with current market conditions’.

By The Editor

This is what council’s executive have recommended to Councillors;

“Council resolved after previous resolutions on this matter at its meeting of 25 February 2021 to enter into negotiations with prospective purchasers for the sale 27-29 Duke Street Coffs Harbour with a view to achieving a reasonable offer in line with market value.

27-29 Duke Street, Coffs Harbour, comprises a three level commercial office building with basement security car parking.  The proposed sale will reduce the Council’s reliance upon the interim loan which it resolved to undertake in the instance it was unable to sell 27-29 Duke Street, Coffs Harbour and 2 Castle Street, Coffs Harbour for the Cultural and Civic Space Project in Gordon Street, Coffs Harbour……….

The offered price of $11,750,000 plus GST is considered fair and reasonable and in line with current market conditions.  The prospective purchaser is noted within Confidential Attachment 4 to this report.  The property has been extensively exposed to the market and although other offers have been received, all have been below the current offer.  It is recommended that Council accept the offer.

Coffs Harbour City Council as part of the sale will continue to occupy those parts of the building, which it currently occupies on the ground level, level 1 and a small area on level 2.  This arrangement will be formalised upon settlement of the sale by Council entering into a 3-year lease with 3 x 1 year options for continuing tenure from the date of transfer initially at a rental of $940,000 per annum gross.”

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CCO editorial comment

Why There Won't Be a Fire Sale on Those Unsold BlackBerry 10 Phones (At  Least Not in the U.S.) - Vox

The fire sale continues.

As does the rush, afforded by yet another LGA election delay, to apparently ‘bind the hands’ of a new council.

Not happy with offloading the airport for a underwhelming and sub optimal overall return price the CHCC executive, scrambling to get bank loans in place for a building contract signed off before finance was in place, now suggests a gross sale price of $11.75m is great value.

But wait, as always the devil is in the detail. Council is leasing back Rigby House at $940,000 for up to three years. If the full three years occurs that is a total of $2.2m. That needs to be deducted from the gross amount. So that brings the net value down to $9.55m.

Then there are agents commissions and numerous day to day operational expenses too numerous to itemise here. But finance and real estate professionals spoken to by CCO yesterday say the maximum net return taking these all into account would be $8m, possibly as little as $7m.

That is why, when all things are considered, we think the the term ‘fire sale’ is appropriate.

This from a Council management that at every turn recently has in our opinion failed to really deliver for residents and ratepayers.

There is the airport price mentioned above and which recently landed $33.6m into Council funds. An amount we don’t know is for five or 10 years.

There was the swimming pool contract management fiasco.

There is $121m of ‘ring-fenced’ developer contributions and government grants still sitting in Council’s bank accounts. But the state of basic day to day maintenance is seen by many in the community to be steadily deteriorating.

There is the ongoing waste mismanagement issue potentially costing residents and ratepayers as much as $31m. And that is before legal fees are taken into account.

There was the failure to land the ‘guaranteed’ TCorp loan for the CCS. There was the ‘rolled gold, you beaut’ Westpac CCS loan that has now fallen over.

And when the net value of the real estate sales is taken into account the promised $20m return seems to be a mirage when outgoings are deducted from the sale prices.

We could go on but we are sure you get the picture.

And who is to say the CBA will now not take a much harder look at council now they surely know that loan-wise, they are essentially now third choice?

What guarantees can the Council Executive give that wont occur?

But never mind. There appears to be nothing more important to this council management, and some Councillors, than a green building housing new council chambers and administration.

4 thoughts on “Sale of Rigby House for $11.75m on CHCC agenda this Thursday

  1. Sparring with a now foreseeable future of (seriously sorry to mention it) a longwhile covid-affected society, having to reassess and perhaps acutely and materially change the way we all interact, isn’t now this question the one to ask: What if the so-called CCS is built, at this extreme cost, then visitation is forced into severe limitation, or even access denied for extended periods altogether?

    The ‘project’ originated in a world different from this one.

    Isn’t now the time to halt this project, while we can, catch a breath, then look to how other cities are negotiating their futures, designing their societal infrastructure?

    Save the money, start from scratch, armed and strengthened with that knowledge from pioneers at the forefront of re-envisioning the new world? Inspired minds are out there right now, finding and developing these new structures, new ways of engaging. Both administrative (workplace) and cultural structures will change, necessarily, isn’t it sensible to put these new developments to good use?

    Does “sensible” make it into the Coffs Harbour City Council vocabulary? Or is it, and we, too zealous to build something, anything? Do we have more money, or think we have, than sense? We can’t set aside twelve months, time to allow for the wiser path forward to grow more clear? Buildings will change, shouldn’t we see how so?

    One of the reasons why China has such progressive developments is it came late to the game and was able to pick and choose from the latest innovations and developments. We could learn from that and do the same. New precincts. Of and for the future.

    Here’s why that won’t happen. Coffs Harbour has a mental anchor, a constraint, that grounds its grand potentials and possibilities into the mud, makes pies from it, then dishes these up as the finest fare you can get. It’s almost as though CHCC cannot let the wider world in.

    Listen in, you’ll hear it on Thursday. Small town thinking serenading itself as worldly and wise and high achieving. Now that’s a ‘bubble’.

    1. For those who are interested in planning, an article has appeared on the ABC site that’s quick and easy, as a taster for a flood of more news items and articles of similar things to come, showing us how contemporary thinkers are setting about redesigning our homes and cities. It mentions TB, so good to avoid if you’ve had enough of covid.

      Otherwise, here’s the link:
      https://www.abc.net.au/news/2021-08-25/what-planning-lessons-during-tb-outbreak-teach-us-about-covid19/100348914

      So on current form where would these new innovations leave Coffs? While modern cities charge ahead with these healthy changes, and economically sound decisions, projecting the ‘now’ into fifteen years ahead Coffs would have a sparse fluttering of it sucked from it by consultants, unrecognisable from the real developments; little bits appearing here and there, yet heralded as state of the art.

      Coffs has to get out of this rut, folks.

      New changes may include even simple things such as sub-floor ventilation systems, surface preparations that are perhaps antiseptic — whatever these are, the silly CCS if built misses out on every single new innovation. Can anyone believe we have a handful of people in Council so mindlessly pushing forward on a project that is already outdated before the car park is even built?

      Nothing will change while Steve “Mud Pie” McGrath is in there. He doesn’t have the mind for it, nor the appetite, in my view. Brilliant innovations and potentials devolve into pedestrian tickboxing that, when enacted, are from another historical period altogether, under his hand.

      Cities all around the world will have precincts change quickly, effected within just a few years (fully built and operating). Just as Coffs Harbour, and indeed Australia was and still largely is culturally backward, an outpost, so too are our planners outdated: this country won’t see those changes but for that limp fluttering, with Coffs far behind that.

      The world is changing too fast for the Management regime currently in place. Let’s bite the bullet, support all mayoral candidates who have the courage to realise Council is antiquated now, and summon the will to make our own changes to keep up with the new-world program.

  2. To spend almost three million in three years to rent back part of Rigby House is simply a pea-and-thimble trick to move the costs to another ledger account. Cut it how you will, but we will be lucky to clear $8million – and we lose a valuable asset. The result is to defer the costs (loss) as a rental expense over the next three years. We rob Peter to pay Paul, I believe the accounting profession has several definitions, massaging, kiting, take your pick.

  3. 40c! But keep in mind that “every single new innovation” might just be smoke and mirrors .

    Take for example; it is not only the elected councilors that take and follow through with bad ideas, the top staff can and do rather senseless things .

    Around 2010 with “smart ideas for the environment” in mind the Council took the initiative to install “waterless Urinals” for their office workers in the administration building, thousands were spent to convert to the new water saving urinals, this ridiculous system lasted for about 12 months and then more money was spent to reverse the idea.

    Maybe something smelt about this move? 😉

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