By Steve Hart
A proposal to sell public land at a discount and underwrite parts of a $60m private development in the heart of Broadmeadows was stopped by Hume City councillors this week, six votes to five.
Following the vote, supporter of the scheme, meeting chair, mayor, and Sunbury councillor Jarrod Bell asked councillors to vote again. He got the same result.
And just to triple-confirm the outcome, councillors were asked by the mayor to raise their hands a third time so their names could be noted down in a meeting procedure known as a division.
Under debate on Monday 26 May was whether council officers should negotiate a final project delivery agreement for a hotel and office block with the Wilbow Dealcorp Consortium – made up of private investment company Wilbow Group and property development firm DealCorp.
On the table was a four-storey, 88-room hotel on the corner of Tanderrum Way, and a 3,500sqm office and retail development on the site of a 200-space carpark on Dimboola Rd.
While council officers claimed the developments would help revitalise the area, concerns about commercial risks being shifted onto ratepayers came to the fore with Cllr Sam Misho being the first to raise concerns about the deal.
He explained ratepayers would be on the hook for who knows how much money if the developer of the proposed office block came unstuck due to a lack of tenants.
He took exception to a proposed agreement between council officers and developers that would require ratepayers to guarantee a minimum level of unspecified rental income for office space.
In referencing the watered-down report in the council agenda Cllr Misho said: “Council ultimately bears the liability for any rental shortfall. So basically we have to find tenants, and if the rent is below the recommended lease price we actually have to fund that shortfall.
“I’ve made my decision based on three elements; financial, social, and the vision for Broadmeadows. Financially, as a professional accountant, I find there is no benefit to us or to council, and who is council? Council is ratepayers.”
Cllr Misho went on to say the proposal was “very controversial” and said “…we should not be taking from the poor to pay the rich”.
“I speak against this report Mr Mayor as I don’t think it actually provides any improvement to the people of Hume.”
Also opposing the plan was Cllr Carly Moore, elected as a Labor councillor, she ran as an independent candidate in this year’s federal elections.
“I agree the proposed development appears beneficial, that it offers significant private investment, job creation, and potential further interest in the area,” she said. “But I’ve got significant concerns.
“The key financial terms and the risk allocation for the proposal are included as a confidential attachment so speakers and submitters have not seen these. But what I can say is that they include the sale of our council land to a private developer at well below market value, and they require council to underwrite the commercial office space.
“I don’t understand why we would use ratepayers money to do this.”
Cllr Moore said Hume has some of the most disadvantaged people in the state.
“I don’t expect that they would want to see us use their hard-earned ratepayer dollars to de-risk private investments, underwrite developers’ income, or to sell council land at well below its estimated value.
“So despite all of the benefits, I cannot support using our rate revenue and ratepayers’ money for this purpose.”
Cllr Steve Gagen said the proposed office and hotel development would help make up for the loss of the Ford factory, which operated in Broadmeadows until October 2016.
“We can’t just say ‘oh well, those people are going to be thrown on the scrap heap’,” he said. “I know it’s only going to give a few hundred of them jobs, but it’s better than nothing.”
He said Broadmeadows can’t be allowed to rust away “like Detroit”.
Cllr Karen Sherry also rose to speak in support of the proposal.
“I know it’s something different,” she said. “But think about some of the risks we take on when we invest in all the services that we do in the pavilions…We never do a cost benefit analysis on that, and we don’t even do an asset management plan, so I think this is going to deliver more benefits.”
How they voted.
In favour (5):
- Jarrod Bell
- Steve Gagen
- Karen Sherry
- Naim Kurt
- Kate Hamley
Against (6):
- Sam Misho
- Jim Overend
- Daniel English
- Carly Moore
- Ally Watson
- John Haddad
