BUSINESS PLAN

FOR

MAJOR LAND TRANSACTION
TO

DISPOSE OF LAND BY WAY OF LEASE

COLLIER PARK GOLF COURSE

........................................................................ 7......................2 7........................ 4 LEGISLATIVE REQUIREMENTS .................. 6 PROPOSAL ........................ 4 5............................................. 4.... DISPOSING OF PROPERTY ............................................... 10 DETAILS OF ANY JOINT VENTURE ................................ 9..........1 - .......... 13 © City of South Perth – May 2010 Page .................................3 5.... 6 EFFECT ON THE PROVISION OF FACILITIES AND SERVICES BY THE CITY 7 EFFECT ON OTHER PERSONS PROVIDING FACILITIES AND SERVICES IN THE DISTRICT................................................................................................................................................................................ 3.1 7.......................................................... 10 PERCENTAGE RENT ................... 5 CONTAMINATED SITES ACT 2003........................ 2 INTRODUCTION ...................... 3 BACKGROUND ......... 10 BASE RENT..........BUSINESS PLAN COLLIER PARK GOLF COURSE TABLE OF CONTENTS 1.......................... 11 COMMENTS ON BUSINESS PLAN................. 10....5 6...................................................1 5......................................................................... 5 PUBLIC NOTICE REQUIREMENTS . EXECUTIVE SUMMARY ......... 12 APPENDIX 1 – SITE PLAN.............4 6..................7 7...................................... 10 OTHER REVENUE DERIVED FROM GOLF COURSE OPERATIONS...................................................2 6................................................ 8 EXPECTED FINANCIAL EFFECT ON THE CITY OF SOUTH PERTH ............2 5................................................... 5......3 8................ 3 PREMISES LOCATION AND DESCRIPTION.................... 11 PROCESS FOLLOWING PUBLIC ADVERTISING ............. 4 PREPARATION OF A BUSINESS PLAN ....... 10 METHOD OF DISPOSAL................................... 9 ABILITY OF THE CITY OF SOUTH PERTH TO MANAGE THE TRANSACTION ................. 6..........................................3 6...4 6.... ........................... 8 EFFECT ON MATTERS REFERRED TO IN THE PLAN FOR THE FUTURE .................................................................................................................. 6 VALUATION OF SUBJECT PREMISES .......................................................................................................................................................1 6..................................................................... 11 ASSESSMENT OF MAJOR LAND TRANSACTION .................................................................................... 2..................................................................................6 6............................

It is one of the most popular public golf courses in the Perth metropolitan region. The operation of the cafe/bar (kiosk). driving range. under an agreement with the City of South Perth (the City). function centre facilities (offices/meeting room/clubhouse). offices and meeting room. EXECUTIVE SUMMARY Best described as picturesque and challenging. (2) (3) (4) © City of South Perth – May 2010 Page . the City’s statutory obligations in relation to the disposition of property under the Local Government Act 1995. and the public consultation process required under the Local Government Act 1995. The large driving range and immaculate putting greens have been key contributors to the courses continued patronage and success. The City undertakes all maintenance of the course. and Lot 3858 Hayman Road. commonly known as Collier Park Golf Course. via a private treaty process to the current lessee. This Business Plan discloses: (1) the intent of the City to dispose of the cafe/bar. pro shop & cart store.2 - . (Reserve 38794) Como.BUSINESS PLAN COLLIER PARK GOLF COURSE 1. the assessment requirements in relation to a land transaction and the disposition of property required under the Local Government Act 1995. (Reserve 36435). cart store and hire area form part of the proposed lease. driving range and cart hire area. to Rosetta Holdings Pty Ltd. who acts as the course controller and collects green fees on behalf of the City. by way of a commercial tenancy lease for a period of five (5) years. Rosetta Holdings Pty Ltd. in return for a set commission. pro-shop. Collier Park Golf Course is a 27 hole international standard public golf course. situated on Lot 3817 Thelma Street.

Council granted a further variation to and extension of the lease to Rosetta Holdings for two years. in 1998 and 2003. and Satisfy the requirements of Section 3.e. A proposal was developed by Rosetta Holdings and was considered by Council at its July 2009 Ordinary Council Meeting. with an expectation that the lessee would come forward with a development proposal for the Course facilities (Club house. driving range. with maintenance being undertaken by City staff. cart park and cart storage shed form part of a commercial tenancy lease. master plan. with Rosetta Holdings. detailing the premises the City is proposing to dispose of by way of lease. on behalf of the Council. who acts as the Course Controller. The Course Controller collects green fees. respectively. under an agreement with the City.BUSINESS PLAN COLLIER PARK GOLF COURSE 2. in return for a percentage commission. Further lease variations and extensions were provided by the City. It is now necessary to resolve the Course operating lease with the City taking on responsibility for determining the way forward for the future development of the course (i. subject to the consent of the Minister for Lands. with expiry in November 2007. to lease all or parts of Lots 3817 and 3858 contained in Crown Land Titles Volume LR3100 Folio 613 and LR 3102 Folio 500. The operation of the kiosk (cafe/bar area). © City of South Perth – May 2010 Page . workshop. Provide the opportunity for the public to comment on the Business Plan. BACKGROUND The Collier Park Golf Course is situated on Lot 3817 Thelma Street (Crown Reserve 36435) and Lot 3858 Hayman Road (Crown Reserve 38794) Como. and entering into a Major Land Transaction. offices and meeting room/function centre facilities. The Collier Park Golf Course was developed in 1984 and Rosetta Holdings Pty Ltd was contracted by the City to operate the facility for a period of three (3) years.58 and 3. In November 1987 the City entered into a five (5) year operating lease. pro-shop. 3. In July 2008. the City of South Perth has the power. to Rosetta Holdings.3 - . pro-shop and driving range). course upgrade and driving range/golf course etc). to Rosetta Holdings. with a five (5) year option. By virtue of a Management Order dated 28 June 1994. In 1996 the City granted Rosetta Holdings a Deed of Extension to the lease. At that meeting Council resolved to ‘note’ the proposal and for the City to engage a consultant to undertake a detailed business plan and feasibility study to redevelop the facilities.59 of the Local Government Act 1995 relating to the City’s proposals for: (i) (ii) the Disposal of Property. INTRODUCTION The purpose of this Business Plan is to: a) b) c) Advise the community that the City proposes to undertake a Major Land Transaction.

4 - .1 DISPOSING OF PROPERTY The process for disposing of property by a local government is detailed under the provisions of Section 3. This includes the requirements for “Major Land Transactions’. (c) It is the City’s intention that it will dispose of the property by item (c). after it has complied with the requirements detailed in Items 5. Specific matters relating to the subject premises are listed in the following table: ITEM Proposed area to be leased MRS Zoning Local TPS Zoning Management Order Purpose Land use Pro.2 and 5. it gives local public of the proposed disposition. water. private treaty. in the opinion of the City. Bar & Kiosk Maintenance Shed 469m² 252m² 48m² Reserved lands – Parks and Recreation Parks and Recreation Park. PREMISES LOCATION AND DESCRIPTION The subject premises are situated on Lot 3817 Thelma Street (Crown Reserve 36435) and Lot 3858 Hayman Road (Crown Reserve 38794). LEGISLATIVE REQUIREMENTS 5. as long as before it agreeing to dispose of the property by private treaty.3 of this business plan. whether or not it is the highest tender. Section 3.BUSINESS PLAN COLLIER PARK GOLF COURSE 4. Recreation and Golf Public Golf Course Easements registered on the Crown Land title in favour of the Water Corporation providing the right to enter exercise certain pipeline. 5.Shop & Cart Store Clubhouse. above.58 the Local Government Act 1995 (the Act).58 details that the City can only dispose of property: (a) (b) to the highest bidder at public auction. Como. Encumbrances Attached at “Appendix 1” is a map depicting the legal boundaries of Lot 3817 (Crown Reserve 36435) and Lot 3858 (Crown Reserve 38794). sewage and stormwater rights. or by private treaty. the most acceptable tender. or to the person who at public tender called by the City. © City of South Perth – May 2010 Page . makes what is.

It is also intended that notices will be placed on public notice boards at various City owned facilities including the Administration Centre.gov. and anything done by the local government for achieving the purpose of the transaction.59 of the Act set out the process governing ’Commercial Enterprises’ by local governments. A notice will also be published on the City’s website www. Its expected effect on the City’s Plan for the Future. and Details of joint venture transactions. is more. © City of South Perth – May 2010 Page . The ability of the City to manage the performance of the transaction.southperth. This Business Plan complies with the requirements of Section 3.5 - . or is worth more.au.000 or 10% of the operating revenue of the local government in the last completed financial year.BUSINESS PLAN COLLIER PARK GOLF COURSE 5. A notice is to be placed in the West Australian newspaper and local newspapers circulating the district. The City anticipates that the total revenue generated from the leasing of the premises will be in excess of $1 million over the term of the lease. 5.000. Manning and Mends Street Libraries and the City’s Operations Centre. than either $1. including ’Major Land Transactions’. The Council is to consider all submissions received prior to deciding to proceed with the proposed ‘Major Land Transaction’ that is the subject of this Business Plan. and where the total value of: (a) (b) the consideration under the transaction.2 PREPARATION OF A BUSINESS PLAN The provisions of Section 3. Before entering into a ‘Major Land Transaction’ the City is required to prepare a Business Plan that includes an overall assessment of the land transaction and is to include details of: Its expected effect on the provision of services and facilities by the City. Its expected financial effect on the City.59 “Commercial Enterprises by Local Governments” of the Local Government Act 1995 (the Act) and the Local Government (Functions and General) Regulations 1996. together with a copy of this document. following the Council’s decision to advertise this business plan for public comment.wa.3 PUBLIC NOTICE REQUIREMENTS Section 3. Its expected effect on other persons providing services and facilities in the district. A ‘Major Land Transaction’ is a land transaction that is not exempt under the Act.59 of the Act requires the City to give state-wide and local public notice of a major land transaction that is under consideration and invite submissions from the public.

unless. Five (5) years commencing 1 July 2010.4 CONTAMINATED SITES ACT 2003 The Contaminated Sites Act 2003 was assented to on 7 November 2003 and commenced operation on 1 December 2006. the environment and environmental values by providing for the identification. for a period of five (5) years. meeting/function room.6 - . land. the environment or any environmental value. recording.1 PROPOSAL The City’s objective for this Major Land Transaction is to dispose of the cafe/bar.” (2) The Collier Park Golf Course has not been reported as a contaminated site and the City is not aware of any contamination of the site. offices. The object of the Contaminated Sites Act is to protect human health. cart storage shed. ASSESSMENT OF MAJOR LAND TRANSACTION 6. or has the potential to present.BUSINESS PLAN COLLIER PARK GOLF COURSE 5. cart store and hire area situated on Lot 3817 (Crown Reserve 36435) and Lot 3858 (Crown Reserve 38794). Section 4 of the Contaminated Sites Act 2003. water or a site of a prescribed class or description. or land. However. driving range facilities. part of the site was an inert rubbish tip. water or a site. proshop. a risk of harm to human health. The principal terms for the proposed new commercial tenancy lease are:- Lease Terms Lessee Leased premises Description Rosetta Holdings Pty Ltd Pro-Shop. cart park. buggy park. kiosk (cafe/bar area). Lease can be terminated by the City by giving six (6) months notice at any time on or after 31 December 2011. Term Redevelopment © City of South Perth – May 2010 Page . The old tip extends over what is known as the ‘Lake Course’ (north east section of the Course) 6. defines ‘Contaminated’ as: “(1) in relation to land. water or a site means having a substance present in or on that land. by way of a commercial tenancy lease. at the appropriate monetary consideration indicated by prevailing market rates. Lease can be terminated by the City giving six (6) months notice at any time on or after 31 December 2011. management and remediation of contaminated sites in the State. is not contaminated where the regulations so provide. if it proposes to redevelop the golf course. workshop. water or site at above background concentrations that presents. However.

and the percentage rent will only be payable in relation to revenue of a stated ‘threshold’. All rates and outgoings to be paid by the Lessee. plus (iii) a percentage rent in relation to sales of ‘Food & Beverages’. 3. excluding fair wear and tear. Structural repairs are to be City’s responsibility. Rent review Rates and outgoings Maintenance and repairs Driving range revenue Green fees Cart hire.2. A different threshold will apply to each of the two percentage rents. 3. Base rent to be reviewed to CPI (Perth all groups . (9%) The Lessee is to pay to the City 10% of all cart hire revenue. City to insure the buildings and structures.1 EFFECT ON THE PROVISION OF FACILITIES AND SERVICES BY THE CITY Is the property currently providing any services? © City of South Perth – May 2010 Page . Lessee is responsible for maintenance.7 - . The City is to pay a percentage fee to the Lessee for collection of green fees. Thresholds to be reviewed to CPI (Perth all groups . 4 and 5.March quarter) in years 2.March quarter) in years 2. Each party is to meet its own legal costs Lessee is required to have a golf professional having an AA or AAA rating on the golf course. The Lessee is to pay to the City 20% of all driving range revenue All green fees are to be collected by Lessee but belong to the City. club hire and coaching revenue Insurance Assignment Legal costs Golf professional 6. (ii) a percentage rent in relation to ‘Pro-Shop sales’. Lessee has no right to assign the lease. with the Lessee to reimburse the City for the cost of the insurance premiums.BUSINESS PLAN COLLIER PARK GOLF COURSE Rent Rent is to comprise: (i) a base rent. 4 and 5. A different percentage will apply to each of the percentage rents.2 6.

It is a popular public golf course.288 107. averaging over 9.4 EXPECTED FINANCIAL EFFECT ON THE CITY OF SOUTH PERTH 6. The intent of this proposed lease is for this situation to remain unchanged.3 What affect will the proceeds from the disposal have on the budget and service provision? The proceeds from the lease of these premises will be allocated according to City Policy P608 – Dividend Policy Collier Park Golf Course. © City of South Perth – May 2010 Page .2 107. in the form of Collier Park Golf Course.404 106. which is accessible to the public. The proposed lease rental fee will be at prevailing market rates.4. with proceeds from the lease rental being allocated in accordance with City Policy P608 – Dividend Policy Collier Park Golf Course. The proposed lease provides for the continuation of the use of the premises and facilities to deliver recreational services to the community.374 104.200 patrons per month. 6.545 What effect will disposal have on that service? The premises have been operating under a leasing arrangement since 1987 and the disposal will not affect the current service being provided to the community. 6. Annual attendances for the last five years are as follows: 2008/2009 2007/2008 2006/2007 2005/2006 2004/2005 6. in the form of a public golf course and ancillary services associated with a golf course.1 What are the effects on the budget in financial terms? The premises are currently under a similar lease arrangement. with any potential increase supplementing the City’s recreational service delivery and providing additional funds to develop the course facilities in the future.2.8 - . The buildings and operation of the course has been under similar arrangements since 1987.2.BUSINESS PLAN COLLIER PARK GOLF COURSE Lot 3817 (Crown Reserve 36435) and Lot 3858 (Crown Reserve 38794) play an important role in the recreational services offered to the community. 6.351 103.3 EFFECT ON OTHER PERSONS PROVIDING FACILITIES AND SERVICES IN THE DISTRICT It is not anticipated that the disposal by way of lease will affect any other person providing services or facilities in the district in any different manner to current service provision.

1 What will the impact be? The proposed disposal by way of lease will contribute to the City’s Corporate Plan. The Collier Park Golf Course significantly contributes to the recreational activity within the City by providing a high quality and challenging golfing experience to the public.2 Will any funds be specifically applied to any projects referred to within the Plan? Support the provision of recreational services and facilities within the City through the payment of a dividend to the Municipal Fund. Provision has been included in the proposed lease document for appropriate rent reviews to occur in years 2. and A ‘Percentage Rent’ in relation to sales of “Food and Beverages”. The base rent has been derived from a market valuation provided by a Licensed Valuer. 6. the Lessee is responsible for the payment of all rates and charges. advertising costs and legal costs associated with the preparation of relevant documentation including the formal lease agreement. It is proposed that this situation continue.9 - . 6. The income generated from the course will finance all of the operating costs.5 EFFECT ON MATTERS REFERRED TO IN THE PLAN FOR THE FUTURE The Local Government Act requires details to be provided in relation to the major land transaction and its expected effect on matters referred to in the Strategic Financial Plan. 3. with some funds being set aside in a reserve fund to assist meet expenditure related to the courses enhancement and improvement. The Percentage Rent is only payable in relation to revenue of a stated threshold.5. In addition to having regard to the fees and charges in place at venues outside the City. 6.5. A ‘Percentage Rent’ in relation to “Pro-Shop” sales. the full cost pricing principle in determining a pricing policy has been taken into account in setting the fees and charges for use of the services and facilities provided at the golf course. 6. which is the City’s plan for the future.4. 4 and 5 of the lease period to ensure the rent maintains parity with the prevailing market. 6.3 Will the disposal have an effect on rates income? The proposed disposal by way of lease will not affect rates income. (2) (3) This proposed rent structure will provide the City with additional revenue from the lease of these facilities. Under the existing lease agreement for the premises.4. and Support the operational requirements and future infrastructure improvements to the golf course through the transfer of funds to a designated reserve fund. The Percentage Rent is only payable in relation to revenue of a stated threshold. Proceeds from the annual rental fee will be utilised to: © City of South Perth – May 2010 Page .2 What are the costs associated with the disposal? Costs associated with the disposal include valuation costs.BUSINESS PLAN COLLIER PARK GOLF COURSE The draft lease proposes a rent based on three elements: (1) A per annum consideration be applied in the form of a base rent.

with the power to lease. McGees Property has recommended percentage turnover rents on the following basis: Cart Hire Pro-Shop Sales Food and Beverage Sales 10% of all sales 5% of all sales in excess of $2.1 BASE RENT The City has obtained a ‘sworn valuation’ from McGee’s Property. 7.000 per annum $160. control and management of the land. for the annual rental applicable to the premises. 6.7 DETAILS OF ANY JOINT VENTURE Lot 3817 (Reserve 36435) and Lot 3858 (Reserve 38794) are Crown Land titles owned by the State of Western Australia. between the City of South Perth and Rosetta Holdings Pty Ltd. Management Orders have been issued to the City granting care. subject to the consent of the Minister for Lands. in their report dated 2 February 2010. The City has the ability and experience within its management structure to manage the disposal transaction and the overall functioning of the facility and has done so since the construction of the course. Rosetta Holdings has an interest in the land. There is no joint venture interests associated with the land or premises.2 PERCENTAGE RENT In addition to the base rent. Licensed Valuers.10 - . has advised that the market value for the premises rental is: Pro-Shop/Cart Store/ Maintenance Shed Base Rent Kiosk/Clubhouse/ Base Rent Total Base Rent $140. The formal lease agreement will be registered with 'Landgate' on the Crown Land Title.000 turnover © City of South Perth – May 2010 Page .BUSINESS PLAN COLLIER PARK GOLF COURSE 6. but only as far as those rights and obligations are provided for under the existing lease agreement.000 per annum 7.8 million turnover 4% of all sales in excess of $500. McGee’s Property.6 ABILITY OF THE CITY OF SOUTH PERTH TO MANAGE THE TRANSACTION The proposed arrangement will be legally formalised through an exclusive use lease agreement. which expires on 30 June 2010. VALUATION OF SUBJECT PREMISES 7.000 per annum $ 20. for a maximum period of twenty one (21) years.

located at Thelma Street Como between the hours of 8:30am to 5:00pm Monday to Friday.6Million per annum. It is proposed under the new lease arrangement that Council will pay an 80% commission to the course controller for the collection of all driving range fees. The current commission percentage is 8% and it is proposed under the new lease to be increased to 9%. 8. 9. or Downloading the document www.au from the City’s website at © City of South Perth – May 2010 Page .southperth. The Business Plan can be inspected: At the Administration Centre of the City of South Perth between the hours of 8:30am to 5:00pm Monday to Friday. and At the City’s Operations Centre.gov. The green fees are collected by the course controller in return for a percentage commission based on total green fees collected.BUSINESS PLAN COLLIER PARK GOLF COURSE 7. (2) Fees from patron use of the driving range Whilst it is difficult to precisely estimate the total fees that will be collected from the use of the driving range.500 per annum.gov. Whilst it is difficult to precisely estimate the total green fees that will be collected annually.wa.11 - . COMMENTS ON BUSINESS PLAN This Business Plan is being advertised for a period of two (2) weeks from the date of notification in the West Australian (Saturday 5 June 2010) newspaper. Currently the driving range fees are collected and retained by the course controller. and On the City’s website at www. previous trends indicate that this could be in excess of $1. Rosetta Holdings Pty Ltd.3 OTHER REVENUE DERIVED FROM GOLF COURSE OPERATIONS The City will also generate income from two other sources associated with the operations of the golf course: (1) green fees from patrons using the golf course.wa. METHOD OF DISPOSAL The disposal of the subject premises will be by way of a commercial tenancy lease for a period of five (5) years. 2008/2009 trends indicate that this could be approximately $34.southperth. via a private treaty process to the current lessee.au Copies of this Business Plan can be obtained by: Contacting Ms Julie Mason on 9474-0922.

Submissions are to be addressed to: Chief Executive Officer City of South Perth Cnr Sandgate St and South Tce SOUTH PERTH WA 6151 Att: Stephen Bell Director Infrastructure Services 10.12 - . PROCESS FOLLOWING PUBLIC ADVERTISING Following closure of the public advertising period. the Council will consider all submissions made.BUSINESS PLAN COLLIER PARK GOLF COURSE Submissions on the Business Plan are to made in writing and to be received no later than 4:00 pm on Tuesday 22 June 2010. and may decide (by absolute majority) to proceed with the Major Land Transaction and disposition of property in accordance with the provisions of the Local Government Act 1995. © City of South Perth – May 2010 Page .

BUSINESS PLAN COLLIER PARK GOLF COURSE APPENDIX 1 – SITE PLAN Lot 3817 Lot 3858 © City of South Perth – May 2010 Page .13 - .

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