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Town Hall lease discount offered

Posted on June 25, 2009, 8:08am

Mount Gambier City Council is negotiating a long-term lease agreement for the Old Town Hall at discounted rates with an organisation that may cease to exist.

According to an agenda report tabled at last month’s council meeting, an independent assessment calculated the commercial rental value at $77,245 a year.

Council was considering a recommendation to charge the Limestone Coast Regional Development Board $38,600 a year plus rates, taxes and outgoings.

The matter was carried over from the May meeting pending discussions with the LCRDB.

The nature of those discussions and the final outcome has been shielded from ratepayers under confidentiality.

The State and Federal Governments are currently discussing how to align the state’s development boards with the Commonwealth’s new agency, Regional Development Australia.

The South Australian Government recently appointed former Premier Rob Kerin to head a transition team.

City councillor Jim Maher last week objected unsuccessfully to the Old Town Hall lease being discussed in confidence.

Cr Maher told The Border Watch he was concerned about issues of probity and governance.

He said the development board’s annual report revealed it was sub-letting space in the Old Town Hall at a profit.

“The LCRDB sublets unused space to its associates and other bodies for an amount reported as being $67,740,” he said.

“This subletting is carried out with scant regard for the terms of the lease, which requires written consent from the Council.

“Council has ignored its responsibility to maintain records of approvals for the sub-leasing arrangements.”

Cr Maher said over the past 10 years the LCRDB had paid rent of about $207,900 compared to a commercial assessment of about $547,000.

“The Council has foregone a very large amount of potential income through these arrangements over the past 10 – 15 years,” he said.

“The community is the loser.”

City chief executive Greg Muller defended the discount, the sub-letting and the proposed five-year term.

“The development board and its partners contribute significantly to the economy of Mount Gambier through their presence, activities and staffing,” he said.

“This alone provides major and very direct benefits to the city.”

Mr Muller said the other agencies that occupied the Old Town Hall were more like “arms of regional development” than sub-tenants.

These include the South East Local Government Association and Limestone Coast Tourism.

Regarding the five-year lease, Mr Muller said the city as landlord was seeking to house a tenant in a building under mutually satisfactory terms.

“If we are able to secure five years, that is favourable to the landlord,” he said.

“The tenant is responsible to fulfil their responsibilities under the terms of the lease.”

Mr Muller said if the LCRDB was re-formed in some shape it would need to renegotiate the lease with council.

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