COUNCIL LOSE $450,000 PER YEAR ON SALE OF SPICER CAR PARK

SPICER SITE SALE LOSES COUNCIL MILLIONS IN PARKING REVENUE.  WAS SALE  LEGAL? WHY DID SPICER SITE NOT GO TO PUBLIC TENDER?

Fremantle Backchat recently questioned the CEO and Mayor asking them to clarify who will receive parking revenue from the Spicer site. According to the Council’s accounts the revenue is in the region of $450,000 a year. 

They were asked: “Who receives the parking revenue from the Spicer Site now that it has been reported as sold to a third party?”

The Director of City Business, Glen Dougall,  replying on behalf of  Mr. St John, confirmed the net income (sale price) from the  Spicer’s was $6,650,000 (the valuation made in 2012), explained the site was now in the ownership of a Mindaroo portfolio (Andrew Forrest ). He said: “The City assumes that parking revenues from this site either passes to the Mindaroo related entity or the contractor managing the property for the owner”.

This confirms that the city will lose approximately half a million dollars a year from the sites parking revenue.

A further question was asked by Fremantle Backchat: “Did the revenue from the Spicer Site, prior to the sale, go into (the city’s) parking revenue? It is recorded by the Council as having been allocated to the King’s Square Plan (KSP). Does that mean it was paid to Sirona Capital? If not how did it contribute to the KSP?”

Mr. Dougall replied: “Net proceeds from the sale of Spicer were placed into Reserve Funds, the proceeds will be used as part funding for the new Civic Building”. 

However he did not detail what had happened to the parking revenue prior to the sale and Fremantle Backchat could not find a record of Spicer parking funds being paid into the City’s Reserve Funds. A lack of detail in the reply leads to the reasonable supposition that the parking revenue may have been paid to Sirona Capital as, until the sale of the site, Sirona appear to have had total control of the property while repeatedly asking for extensions of time to pay Council. 

This underlines a point made by Fremantle Backchat in a previous article (link below) which questioned Sirona’s solvency. In effect the longer Sirona had control of the property the more revenue they possibly gained from the parking facilities.

Council will now see a continuing loss of revenue amounting in the medium term of, say six years, of approximately $3,000,000 plus any revenue which may have previously been absorbed by Sirona Capital.

When the property was ceded to Sirona $12.65m was removed from the City’s Reserve Funds to assist in covering the Council’s operating costs. 

Sirona had agreed to purchase a number of properties and apparently still owe Council $6,000,000.

Legal advice on the sale of the Spicer Site was apparently $50,000. It is recorded as ‘Advice on Spicer settlement and possible Kings Square Redevelopment and Spicer se (sic) Legal Services’ in the accounts. Mr. Dougal explained that the advice between the Council and its lawyers is privileged and offered no further details.

WAS SALE CONDUCTED LEGALLY? WHY DID THE PROPERTY NOT GO TO PUBLIC TENDER?

A readers question to Fremantle Backchat  pointed out the City evade answering questions and asked: “How was the purchaser (Mindaroo), able to buy the site without going through a public tendering process?”

While pursuing a lack of transparency by the Council a series of questions have been asked by Fremantle Backchat related to Council’s partnership with Sirona Capital.  The questions will be published together with any clarifications from the Council.

Roger Garwood, Editor. <editorbackchat@gmail.com>

Links to related stories:

SIRONA MISS DEADLINE  <https://wp.me/p3YA9m-Az&gt;

ARE SIRONA SOLVENT?  <https://wp.me/p3YA9m-zA&gt;

FREMANTLE RUNNING ON EMPTY <https://wp.me/p3YA9m-mT&gt;

FREMANTLE- A PERFECT TORM OF COMMERCIAL CRISIS AND BAD MANAGEMENT <https://wp.me/p3YA9m-2E&gt;