SPIN CITY

SPIN CITY: $650,000 BUDGET FOR PUBLIC RELATIONS
Fremantle journalist Carmelo Amalfi has revealed Fremantle Council has so far spent $650,000 on a public relations campaign.
Amalfi the publisher of Fremantle StreetWise magazine
Ratepayers Face Conflicting Evidence of Visitor Numbers
The Mayor, Dr Brad Pettitt, paraphrasing spin from Sirona, stated in late September that Fremantle has 1,600,000 tourists per year.
He claims this will increase to 3,000,000 when the Myer makeover is completed but quickly contradicted himself, announcing the Fremantle Festival Parade will be cancelled because visitor numbers are not high enough.
The parade will be replaced by a shopping trolley race to held in King’s Square to raise money for charity. There should be no shortage of competitors. Within fifty metres of the mayor’s office there are enough homeless people using shopping trolleys to harness their belongings in their shopping trollies and head for the starting line.
On the 5th October the Mayor quoted conflicting visitor numbers. These show that in the financial years of 2015-2016 and 2016-2017 visitor figures were a little short of 1.3 million per year, 300,000 less than figure of 1.6m Dr Pettitt had previously quoted which he said were obtained from the Department of Tourism.
The Mayors latest statistics show the Festival period of November has a very high visitor rating, only marginally  lower  than the Christmas and Easter holiday periods.
So why cancel the Festival Parade which has been the highlight of the annual ten day festival for 20 years?

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Homeless and in sight of the Mayor’s office. This person was camped here for weeks and  then the election campaign got into gear. It appears that he has found a home or was moved on by Fremantle Council’s security squad. In the past few days a lot of people seem to have been ‘moved along’. In defence of the security detail it must be said they operate with a great deal of tact and understanding but they are only a band aid solution.

EMERGING DYSTOPIAN SOCIETY
It’s not difficult to spot the city’s emerging dystopian society. Retail trade in the West End is collapsing. Within a stone’s throw of the Town Hall, where rents for a medium size retail outlet are as high as $240,000, homeless people sleep in the empty doorways. Of course the problem is solved easily – move them on. We now have a security team recruited by council to clean up the streets, moving less than fortunate people away. Out of sight, out of mind! A band aid solution for an increasing problem and a clear sign of a city in crisis.
While this is happening Spin City HQ is in full swing. The council are reportedly burning a budget in excess of $650,000 to try and make the Magic Pudding rise. Coincidently this feel good spin is happening during the lead up to an election where challengers to the Koolaid Council, followers of The Cult Of Brad, are fighting for seats and salaries Fremantle ratepayers are funding the spin campaign.
THE ONE EYED MAN IS KING
We’re told that the Myer makeover will see Fremantle’s economy rise, Phoenix like, from the ashes of an eight year autocracy.
The Mayor is commendably one eyed about the city’s future. But in the land of the blind the one eyed man is king. There is also  a biblical saying: ” When a blind man bears the standard, pity those who follow.”

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The CBD’s latest victim closed last week

FINANCIAL GOAL POSTS MOVED IN A SMOK AND MIRRORS ACT
The city’s overbearing spin has sparse factual substance but when the financial facts related to the King’s Square development were exposed by financial expert Martin Lee and City Ward candidate Claudia Green, they were brushed under the carpet. Those facts, based on figures obtained from council, show Fremantle faces a  financial collapse leaving ratepayers to fill a black hole of up to $50,000,000.
This financial collapse was recently endorsed by the Minister who stated Fremantle is a city at financial risk. Fremantle had the worst financial rating on the State’s Local Government website.
Fremantle Council claimed that was not the case explaining they had moved the goal posts in the accounting system, hence the poor showing of 42 points in a statewide list of councils’ finances. 70 points is the benchmark for good financial health.
Within a fee days the goal posts were moved again. Fremantle now has a rating of 85! Questions must be asked about how this smoke and mirrors act came about.
Was the Minister mislead, were Treasury so incompetent they misread the city’s accounts? Did all ratepayers  come down with the last shower and believe this overnight turnaround? Was there a moment of panic in the Mayor’s office?
LIPSTICK ON A PIG
The Myer makeover materialised from an architectural competition and is described in Spin City’s publicity as world class. It is not. It is simply putting lipstick on a pig. The style is a Neo Lavatorial throwback to the 60s similar to that used in the  in the east end of the city. That too was promised to be a miracle trading area for the city. The area is now little more than a third world eyesore with a promised hotel development put on hold and becoming a temporary car park. The new Woolworth’s site, next to St Patrick’s, which we were told would bring life to the east end of the city, is closed after a few years of trading. At least 80 retail and business premises are now visibly vacant in Fremantle’s CBD alone.  The total is probably over 100.
OUTSIDE FORCES BLAMED WITH SMOKE AND MIRRORS SPIN
Outside forces are blamed: the GFC; mining boom collapse; State Government finances et al. Yet other shires flourish while operating under identical state, national and international burdens.
What we are getting is more Spin. Smoke and mirrors distractions: Australia Day; plastic bags; charity collection pillars; speed humps; shopping trolly derby; ‘Yes’ vote. Non of these issues address the core problems facing the city and the spin bait seems to be swallowed hook line and sinker by every member of council.
Does council really need a new administration building? The old one seems to have worn quite well and bears a striking resemblance to the Myer makeover, a carry over from ’60s style architecture. The market in Kings Square has not succeeded in attracting visitors and there is no reason to assume that the glossy spin from Sirona will be any more successful. These lifestyle promotions can result in spectacular failures. An example is the Docklands development in Melbourne which now has retailers and restauranteurs walking away from their leases and apartment owners saying ‘this is not the lifestyle we were promised’.

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Fremantle’s existing  administration building would benefit from a coat of paint and a flashy new market piazza . We could save $50,000,000 using little more than a paint pot.

$1.3 BILLION INVESTMENT MANTRA : ONLY 20% HAPPENING
We are told that investments of $1.3 billion are progressing in the city. They are not. In fact they are nearly all stalled, put on hold. The only visible progress is Sirona’s where we’ll see concrete Botox slapped on Miss Piggy. That is less than 20% of the investments the Mayor claims are happening.
THE ASIAN CONNECTION
Sirona  is a  company with strong connections to  Alvarez and Marsal, a corporation specialising in turning sluggish areas into  sustainable growth. Are Sirona  a pimple on the back of a massive overseas corporation and can we expect to see a sell out? In that respect council have helped  by selling assets at bargain basement prices to Sirona.  Many of the ratepayers’ assets at well below market value. We can be 100% certain that the real winners will be the developers. Who negotiated that deal?

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Homeless on Monument Hill. A number of people have been sleeping here recently. Will this type of image become an epitaph to Fremantle’s once vibrant lifestyle and economy?


NOTE:
Dr Pettitt has been asked to clarify the visitor figures and has been asked whether there was any other reason the Festival Parade has been cancelled.

Roger Garwood

editorbackchat@gmail.com

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FREMANTLE: RUNNING ON EMPTY

While council deliver a mantra of sustainability the signs of a collapse in the Fremantle economy is glaringly evident in the CBD.

I took a walk around  the area and counted in excess of 40 properties which are empty, offered for lease, or moving. The total is probably closer to 60 as the Woolworth’s building houses a number of vacant outlets  as does the Coles Woolstore.  These pictures were taken within about 250m of the Town Hall

Very recently one new retail outlet, selling high quality home furnishings and decorations, has closed after six months. It was located in the Mall, opposite the Town Hall. The rent was $240,000,  higher than similar sized properties in downtown New York.

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VILLA, closed after six months about a week ago. The rent was $240,000 a year but trade for this high quality retail outlet  didn’t materialise. This is in Fremantle Mall, opposite the Attwell Arcade development.

Shepherd’s News agency have to move from their prime spot. It holds the longest serving tenancy of Fremantle. The original Shepherd’s News Agency was established in this building in 1908 and the current business owners have been there for 26 years. They now have to move aside for developers.

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Shepherd’s Newsagency have been located in the Manning building  since 1908. They are the oldest  business in Fremantle still operating from the same premises. Now they have to move to make way for development.

The Woolworths shopping centre, next to St Patrick’s, has been closed for a couple of years. It was gleefully broadcast that this would bring new life to the east end of the city. Opposite them the Hilton site, which used to contain a number of shops, is derelict and scheduled to become a temporary car park.

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The Woolstores centre is hosting many empty premises. Even with a carpark in situ it was not able to survive

The centre  hosted about 20 retail and office business’s. They were not included in my count of about 40 empty premises.

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The Hilton Hotel site, due to become a temporary car park. 

CODA, a mainstay of council’s PR sustainability spin, have closed shop and amalgamated with a Perth based company. CODA was a foundation stone of the Future Fremantle organisation, established to build a better Fremantle.

 

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CODA’s vacant office

 

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Coles Woolstores site is home to several vacant retail premises
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A small selection of over 40 empty retail and office premises in the CBD is shown below.

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And finally, in one vacant shop window the mayor delivers his mantra of a vibrant city.

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NEW DAD BRAD SPITS DUMMY?

 

Mayor Brad Pettitt appears to be backing away from one of the most exciting election debate formats  a  candidate has ever proposed.

Mayoral challenger Ra Stewart has suggested a series of debates between Dr Pettitt, her and any other candidates who may run for the top job.  A debate will be held in each of Fremantle’s wards, one a week for six weeks.

Locals to ‘have a go’ on their territory

The diversity in the demographics of each ward mean a 6×6 series will give residents of each ward the chance to question candidates on concerns which are specific to their locality.

This style of localised debates may help residents understand the importance of local government effect on everyday life.

Brad’s immediate response was enthusiastic, agreeing to have diverse debates. Six debates in six weeks will offer a lot  of tempo and interest to the campaign. It’s an idea which deserves to succeed.

However Dr Pettitt appears to have distanced himself from the idea,  indicating it is necessary to liaise with precincts. That is a reasonable point but precincts are not wards and his request appears to be a delaying tactic, maybe on the advice of his campaign team.

Ra Will Run Alone – unless candidates for local seats join the debate

Ra Stewart  has resolved to run the debates alone which may be a little one-sided but an obvious expansion of her idea would be for local ward candidates to be part of a debate with her. This opens up a direct one on one discussion related to local issues.

The first debate is on the evening of Thursday 7th September, 5.00pm at the PCYC, 34 Paget Street, Fremantle.

And an apology to Brad: Sorry if the headline seemed a bit OTT but I just couldn’t resist it having considered the current family event. Best wishes to you all.

Roger Garwood

editorbackchat@gmail.com

0418 921 735

SUNSET: CONCERT CASH WENT INTO BACKPACKS

SUNSET’S EVENTS : CONCERT CASH FILLED BACKPACKS : PARLIAMENTARY INQUIRY INTO EVENT FAILURE : AUDITED ACCOUNTS : CONFIDENTIAL REPORT INTO CONFLICTS OF INTEREST
A music industry insider has informed Fremantle Backchat that within Sunset’s Business structures it was normal practice to sell surplus tickets at entry gates for cash. Most entry tickets were sold online through booking agencies but it is estimated as many as 2000 tickets, normally available to events online, may have remained unsold. Depending on the event these were sold for cash at prices of “$120 to $150”.
As cash registers filled a Sunset director, James Legge, “would empty them, putting the money into a backpack. As the tills refilled he would return and empty them into the backpack again”.
Fremantle Backchat’s informant explained that, if there were people still waiting to gain entry when tickets were sold out, Sunset’s volunteer workers were instructed to recover ticket stubs from waste bins. The tickets were then recycled “restamped” and sold again. It was impossible to know exactly how many cash tickets were sold but “anything from 1000 to 2000” was estimated.
This indicates that within the directors’ matrix of companies there could have been cash sales of $120,000 to $300,000 at any particular event.
It is not illegal to sell goods and services for cash but it is unknown whether all of the cash  collected at events went ‘through the books’ or was kept aside, possibly to avoid being used to pay creditors. Sunset has recently attempted to negotiate settlements with creditors.
Fremantle Backchat has been supplied with information which indicates the Sunset directors are secured creditors. This would mean that before other creditors are paid the directors have first call on funds.
PARLIAMENTARY INQUIRY INTO EVENTS FAILURE
In September 2011 a parliamentary inquiry was held into the dealings of One Movement Pty Ltd, Sunset Events and the three directors with Events Corp, part of Western Australian Tourism Commission. One movement had been sponsored by Events Corp for a series of three events which  failed financially.
‘Sunset’ has become an umbrella term which covers a matrix of companies. Each company ran events controlled by the three directors, David Chitty, Andrew Chernov and James Legge, each registered with ASIC as individual one dollar companies.
In summary it was proposed by the three directors that One Movement Pty Ltd should host an event in Perth each year for three years. The event was managed by Sunset Events, in itself a partnership operated by the three directors.
The events were planned for 2009, 2010, 2011 and involved agreed sponsorship by Events Corp of nearly $3m. The event of 2009, the first in the planned series of three,  did not meet expectations. Audited accounts of One Movement Pty Ltd showed sponsorship of $1,683,035 which included State Government sponsorship of $995,500.
Ticket sales were recorded in the company audit at $134,893 online and $23,023 in cash
AUDITED ACCOUNTS OF ONE MOVEMENT PTY LTD
The audited accounts of One Movement Pty Ltd, for an 18 month period ending on 31st December 2009, were submitted and reveal a net loss of $1,361,439.
Expenditure showed administration costs Of $202,667 and consultants’ fees of 364,083 were paid. It is not known who the administrators or consultants were but it may be reasonable to assume they may have been one or more of the three company directors. During the inquiry the directors claimed $400,000 was spent on due diligence at the event’s planning stage.
(A link to the audited accounts is shown at the end of this article)
It is reasonable to conclude that, in spite of $400,000 claimed to have been spent on due diligence, which presumably included calculations related to adverting and sales, the company did not follow its own research advice. Did they spend as little as possible to ensure the event’s attendance reached expectations?
A final report was made to Parliament in December 2011 (see link below). The report included many observations, among them:
“Total revenue was approximately $1.26m below that budgeted, with the largest variance being ticket sales which was $908k below that budgeted”.
The report continues “Total expenses were approximately $47,485 below that budgeted with the largest variance attributable to marketing expenses”.
The audited reported, under the heading “Emphasis of Matters Regarding Going Concern” said “One Movement Pty Ltd has a deficiency of Working capital and a deficiency of net assets of $1,361,588.  The liabilities of the company include borrowings from Sunset Events which is related to equity. The owner directors have pledged their ongoing financial support for One Movement Pty Ltd”
The Parliamentary Report said “The Committee views the Auditor’s “Emphasis of Matter” as significant”. (see Note below)
The Committee cast doubt on the liquidity of One Movement Pty Ltd, spoke of the considerable financial distress shown in the financial statement and outlined the directors’ explanation of delays in paying creditors. The auditors said: “This situation indicates the existence of material uncertainly that may cast significant doubt on the companies ability to continue as a going concern and therefore the company may be unable to realise assets and discharge its liabilities in the normal course of business. The financial report does not fully disclose this fact.”
One Movement Pty Ltd ceased trading on September 5th 2011.
CONFIDENTIAL REPORT : CONFLICT OF INTEREST WITHIN EVENTS CORP
In a separate report into matters surrounding government sponsorship of events, questions were raised in relation to a manager within Events Corp resulting in the Report on Allegations of a Conflict of Interest Involving a Tourism WA Employee and the One Movement Music Festival.
The report is relevant as a number of Fremantle City Councillors have expressed a conflict of interest in relation to Sunset Events.
There were several conclusions in Commissioner Wauchope’s report to the acting CEO of Tourism WA.
The principal conclusion was:
“There was both an actual and perceived conflict of interest … This presented a situation which raised competing interests and a perception that there was the potential for the individual concerned and or Sunset Events to receive an unfair advantage”
(Fremantle Backchat has a copy of the confidential report).

THE PUBLIC HAS A RIGHT TO KNOW

A 21 year was lease awarded to Sunset by Fremantle Council Chamber in the face of considerable public opposition. It seems reasonable to ask Council’s Administration to reveal what due diligence was conducted into the Sunset matrix of companies in relation to the application for the lease at Unit 1 J Shed. Fremantle ratepayers are subsidising the lease.

Did Council Administration have knowledge of these Parliamentary Reports, transcripts, financial statements and reports related to conflicts of interest?

If they did how much information was relayed to councillors and/or were complete reports made available to them?

If these reports were relayed to councillors did evidence of systemic failures within Sunset Events and government departments influence councillors decisions?
NOTE : Emphasis of Matter paragraph (EMP) has been defined in International Standards on Auditing (ISAs) as follows:
A paragraph included in the auditor’s report that refers to a matter appropriately presented or disclosed in the financial statements that, in the auditor’s judgment, is of such importance that it is fundamental to users’ understanding of the financial statements.
LINKS:
One Movement Pty Ltd Audit:
http://www.parliament.wa.gov.au/publications/tabledpapers.nsf/displaypaper/3813489a0c12182a799c6d77482578b6004e0f55/$file/3489.pdf
Inquiry into WA Tourism Commission/One Movement:
http://www.parliament.wa.gov.au/parliament%5Ccommit.nsf/(Report+Lookup+by+Com+ID)/822360D9A7CAF4CB482579590024EFD4/$file/ef.mte.111201.rpf.035.xx.pdf

Roger Garwood

editorbackchat @gmail.com

 

LOW KEY KICK START IN BEACONSFIELD

FREMANTLE COUNCIL ELECTIONS ARE WARMING UP

A  small, low key, group of supporters gathered at the Hilton Bowling Club last night (Friday 21st July) to support Fedele Carmada’s run for a Beaconsfield seat in the Fremantle elections.

Mayoral challenger Ra Stewart and former mayor Peter Tagliaferri  attended but primarily this was a family affair. Even the candidate’s grandmother was sitting quietly in the background, underlining a deeply established local family. It was a modest, ‘Very Freo’ grass roots event at which Fedele Carmada appeared as an intelligent, well informed, home grown, candidate emphasised by the fact he is a third generation local fisherman.

He delivered no bullshit, no rallying cries, no political platitudes but a straightforward ‘we’ve got a job to do, let’s do it’ attitude.

Hannah Fitzhardinge, the incumbent councillor, will be tenacious and highly credible in defending her seat, making the battle for Beaconsfield  the bellwether to watch in the lead-up to the elections.

STIR THE POSSUM

Fremantle traditionally has a higher turnout of voters than many local council electorates, though not high enough. Because local councils effect daily living more than any arm of government it is essential for ratepayers and residents to get out, stir the possum, listen to candidates’ objectives and make a seriously considered choice. In October the city will experience the most interesting election for decades at a time when contentious issues related to development, heritage and city finances are surfacing.