NOV 28 Agena Item 20.2


To determine a proposal seeking a $9m interest free advance for a period of five years to fund the construction of 300 public car parks on the CH Smith site, subject to certain guarantees. 

RECOMMENDATION: 1(a) That Council enters into legally binding arrangements with Northern Outlet Developments Pty Ltd for the following: i. The construction of a 200 car space public car parking facility to be managed and owned by the City of Launceston on the CH Smith site. ii. The construction of a further 100 car space public car parking facility to be managed and owned by the City of Launceston on the CH Smith site. (b) Such legally binding arrangements shall be conditional upon the Council receiving $9m as an interest free loan from the State Government repayable at the conclusion of a five year period. (c) The legally binding arrangements are subject to Northern Outlet Developments Pty Ltd providing the guarantees indicated within 3. below. 2. That the Council provides a submission to the Tasmanian Treasury Department seeking approval for the provision of a $9m interest free loan repayable at the conclusion of a five year period for funding of the projects indicated in 1(a) (i) and (ii) above. 3. That as a pre-requisite to the Council executing any contracts, agreements or formulation of intentions that are legally enforceable relating to 1. and 2. above, the Council shall secure form Northern Outlet Developments Pty Ltd the following legally enforceable guarantees: i. That a 240 car space car parking facility for public use and to be owned and managed by the City of Launceston is constructed on the CH Smith site within a period of 12 months from a Development Approval being granted, or such further period agreed by the Council. City of Launceston COUNCIL AGENDA Monday 28 November 2016 149 20.2 CH Smith Site Development …(Cont’d) ii. That further a 60 car space car parking facility for public use and to be owned and managed by the City of Launceston is constructed on the CH Smith site by 30 June 2018. iii. That a schedule of works and timelines for the redevelopment of the CH Smith buildings and site in a timely manner and restoration of the heritage values of the buildings and site as approved by Heritage Tasmania be agreed with the Council. REPORT: 1. Background Aldermen would be aware that the CH Smith site located adjacent the intersection of Charles and Cimitiere Streets, Launceston has been in a derelict state for in excess of 15 years. During this time the property has been under various ownerships, yet the owners have been unable to generate a commercially viable development proposal that could be sustained. The Council has assumed a proactive role in working with the owners in the recent past in order to formulate a development proposal which could be considered. In this regard, two recent development applications for the site have received development approval from Council. The site contains significant heritage elements which are of major importance in conveying the story of Launceston as the nation's third oldest city. The Council has been in close collaboration with Heritage Tasmania in order to work with the owners in retaining the significant heritage values and advising on the most effective means by which a development proposal could proceed. The years of neglect on the site have severely compromised the heritage values to the extent that should further deterioration occur, there is a very real prospect that important aspects of the city's history may be irretrievable. In more recent times, the Council has been made aware of illegal activity occurring on the site, including the presence of squatters. The presence of people on the site has led to serious concerns regarding both in sanitary conditions and safety from injury. The continuing deterioration of the CH Smith site and the lack of substantial remedial action by the owners despite repeated undertakings, has compelled the General Manager to issue three Emergency Orders on the site seeking the buildings are made secure so as not to pose risk to community safety. It merits reiterating that the owners have received a number of recent Development Approvals from the Council relating to various development proposals they have put forward for the CH Smith site. None of these proposals have come to fruition. City of Launceston COUNCIL AGENDA Monday 28 November 2016 150 20.2 CH Smith Site Development …(Cont’d) It would appear from the visual assessment and from condition reports relating to buildings on the site that if urgent action is not taken to address continuing deterioration from weather exposure, then the increasing derelict nature of the buildings on the site may leave no viable option other than demolition. This would be an extremely unsatisfactory and regrettable outcome. 2. Community Perception The CH Smith site lies at a prominent very visible location in the confluence of two major vehicle routes into the city, Cimitiere Street and Wellington/Lower Charles Streets. The public perception, continually reinforced on a daily basis, is of an increasingly derelict site on a key city location. Inevitably this reflects negatively on the image of the city to both residents and visitors alike. Additionally, the subjective messaging becomes one that suggests Launceston lacks the capacity or imagination to address a derelict outcome on ostensibly a major city access point through decisive and positive action. This perception continues notwithstanding that the CH Smith site is in private ownership. These matters have been of major concern to the Council over a lengthy period of time as it undertakes to plan for a vibrant and sustainable city environment appropriate to a contemporary regional service centre. 3. Council Strategic Objectives The CH Smith site is of major strategic importance to the city as a consequence of the prominence of the site, its scale and due to its potential function in providing a major connection between the CBD and the city's key waterfront areas and onwards to: North Bank, Royal Park, Cataract Gorge and Inveresk. Development of the site in a manner that is visually appealing, restores the highly regarded heritage values of the buildings and achieves the strategic function of the location is extremely important to both the city and as an expression of confidence to residents and visitors to Launceston. 4. Council Car Parking The CH Smith site is strategically located to provide important car parking facilities for patrons to Seaport and other adjacent areas and also for the northern aspect of the Launceston CBD. City of Launceston COUNCIL AGENDA Monday 28 November 2016 151 20.2 CH Smith Site Development …(Cont’d) It could reasonably be anticipated that at a future point in time the development needs of the City will promote consideration of a higher value use for the remaining area of the Council owned Cimitiere Street car park, capitalising on the City Heart developments and the transformational capacity of the University of Tasmania Inner City Campus project at Inveresk. Discussions have been undertaken with management of the extremely popular Harvest Market in order that the Council may integrate the future plans and requirements of the Harvest Market into infrastructure design and implementation for the City Heart project. At some future point in time it may be necessary for the Harvest Market to relocate to a more bespoke infrastructure location developed at Civic Square. An important aspect of any future relocation will be the availability of sufficient readily accessible nearby car parking. The CH Smith site is ideally located to fulfil this purpose. 5. Negotiations Undertaken The Council has been in consultation with a number of parties seeking to reach a solution which enables the strategically important CH Smith site to be developed in a manner that adds value to the Launceston CBD and addresses the blight on the city's landscape that currently characterises the derelict site. The Council has entered these discussions because it is considered extremely important that the Council positions itself in a manner that is able to influence outcomes on the site. Three high priority Council outcomes have been identified and brought to bear with these negotiations: I. That there is a high level of certainty that the site can be developed in a timely manner and in a way that adds value to the Launceston CBD and restores the important heritage value of buildings. II. That the development does not incorporate retail floor space which has the potential to further fragment the Launceston CBD retail offering and increase the risk of a "hollowing out" of the CBD as a major retail destination. This outcome would be extremely negative for the future economic prosperity of a sustainable CBD and would substantially compromise the Council's City Heart major CBD investment. It would also detract from the compact nature necessary to activate a vibrant, dynamic and appealing CBD environment. City of Launceston COUNCIL AGENDA Monday 28 November 2016 152 20.2 CH Smith Site Development …(Cont’d) III. That the Council is able to locate a 300 car space public car parking facility on the site to service the future development of Civic Square, the northern CBD and the interaction with the city's waterfront areas. Negotiations by the Council have been premised on the basis that legally enforceable guarantees will be entered into to secure guaranteed outcomes on these three high priority objectives. 6. Outcomes The Council is aware that Errol Stewart and Scott Curran, trading as Northern Outlet Developments Pty Ltd have, by unconditional contract, purchased the CH Smith site and have taken occupancy on a lease basis pending settlement. Significant work is underway to address the structural and public safety issues related to the precarious condition of buildings on the site, abating further deterioration of heritage value buildings and securing the site from illegal access. Negotiations regarding the strategic importance of car parking in the CH Smith site have been undertaken with the new owners and also with the State Government. The State Government have indicated they are prepared to consider a submission to Treasury for a proposal that the State Government provide advanced funding of $9m for a period of five years, with no interest payable by the Council, under the Northern Economic Stimulus Package recently announced by the Treasurer. This funding could be applied to the construction of 300 car parking spaces as part of a car parking area on the CH Smith site. It is anticipated that the car parking project would be completed in two stages: i. 240 car spaces on the lower level within 12 months from the issuing of development approvals. ii. 60 car spaces in conjunction with completion of office development and upper level works by 30 June 2018. It is understood that Northern Outlet Developments Pty Ltd have made substantial progress on development plans for the CH Smith site. This information has been presented to Aldermen by the principals prior to a Development Application being submitted. City of Launceston COUNCIL AGENDA Monday 28 November 2016 153 20.2 CH Smith Site Development …(Cont’d) ECONOMIC IMPACT: Considered within the report detail. ENVIRONMENTAL IMPACT: To be considered as part of the planning approval process. SOCIAL IMPACT: Considered within the report detail and as part of the planning approvals process. STRATEGIC DOCUMENT REFERENCE: City of Launceston Strategic Plan 2014-2024 Priority Area 1 - A creative and innovative city Ten-year goal - To foster creative and innovative people and industries Key Direction - 1. To establish appropriate mechanisms to support the retail sector Priority Area 2 - A city where people choose to live Ten-year goal - To promote Launceston as a unique place to live, work, study and play Key Directions - 1. To continue to offer and attractive network of parks, open spaces and facilities throughout Launceston 2. To support the CBD and commercial areas as activity places during day and night 5. To plan for better connections between the river and Launceston Priority Area 3 - A city in touch with its region Ten-year goal - To ensure Launceston is accessible and connected through efficient transport and digital networks Key Direction - 3. To regularly review our strategic approach to parking in Launceston Priority Area 4 - A diverse and welcoming City of Launceston Ten-year goal - To offer access to services and spaces for all community members and to work in partnership with others to address the needs of vulnerable and diverse communities Key Direction - 2. To plan services and facilities that recognise the changing demographics of our community City of Launceston COUNCIL AGENDA Monday 28 November 2016 154 20.2 CH Smith Site Development …(Cont’d) Priority Area 7 - A city that stimulates economic activity and vibrancy Ten-year goal - To develop a strategic and dedicated approach to securing economic investment in Launceston Key Directions - 1. To actively market the City and Region and pursue investment 2. To provide an environment that is conductive to business and development 6. To facilitate direct investment in the local economy to support its growth Priority Area 8 - A secure, accountable and responsive Organisation Ten-year goals - To communicate and engage consistently and effectively with our community and stakeholders; to seek and champion collaboration to address major issues for Northern Tasmania; to ensure decisions are made in a transparent and accountable way; to continue to meet our statutory obligations and deliver quality services; to continue to ensure the long-term sustainability of our Organisation Key Directions - 2. To lead the implementation of the Greater Launceston Plan by collaborating on relevant initiatives 4. To continually improve our service delivery and supporting processes 5. To strategically manage our assets, facilities and services BUDGET & FINANCIAL ASPECTS: Financial aspects relating to commercial-in-confidence information regarding yield and rates for public car parking will be provided to Aldermen by way of a presentation.

DISCLOSURE OF INTERESTS: The officer has no conflict of interest in this item.

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