CITY OF BAYSWATER
UNDER SEPARATE
COVER
FOR THE
ORDINARY COUNCIL MEETING
15 November 2016
Item 10.5 - Update on Lot 14, 128 King William Street, Bayswater
10.5
Update on Lot 14, 128 King William Street, Bayswater
Location:
Owners:
Officer:
Refer:
Lot 14, 128 King William Street, Bayswater
Robert Carter, Donald Carter, Donald Carter, Robert Carter,
Dennis Carter, Kenneth Carter, Gregory Carter, Faith
Martin, Dorothy King and Dawn Hawkins
Director Planning and Development Services
Item 10.1: OCM 25.10.2016
Items 8.1 & 8.2: OCM 02.08.2016
Item 16.4.2: OCM 28.9.2010
Item 16.4.1: OCM 27.7.2010
Confidential Attachment - in accordance with Section 5.23(2)(c) and (e)(ii) of the
Local Government Act 1995 - contract which may be entered into by the
Local Government, and information that has a commercial value to a person.
EXECUTIVE SUMMARY
Application:
To update Council on the progress of the potential purchase of Lot 14,
128 King William Street, Bayswater, known as "Carters land", following receipt of an offer.
Key Issues:
•
•
Following a meeting between the subject landowners and the Mayor, Councillors and
City officers to discuss the opportunity for the City of Bayswater to acquire the subject
site, the owners have provided an offer, dated 31 October 2016, for Council's
consideration (Attachment 1 - Confidential).
As part of its due diligence, the City is obtaining a valuation for the property, which will
be provided separately to Councillors when it is completed.
BACKGROUND
A subdivision application for the development of a freehold subdivision on Lots 6-10 and 14,
128 and 130 King William Street, Bayswater was approved by the Western Australian
Planning Commission (WAPC) on 9 June 2016. The approved subdivision included two culde-sac turning heads on Lot 14. This followed a Council resolution at its Ordinary Meeting
held on 23 February 2016 to recommend refusal of the subdivision application to the WAPC.
Subsequently, the owners commenced 'preliminary' site works at the site on 14 July 2016.
This action resulted in considerable public outcry, particularly in relation to the clearing of
trees on Lot 14.
A number of Councillors and officers met on site with community members on 15 July 2016
and there has been considerable media interest. The Minister for Planning subsequently
invited local MLAs, the WAPC Chairman, Department of Planning (DOP) Assistant Director
General, the Mayor, Deputy Mayor, City officers and community representatives to attend a
meeting to discuss various matters raised.
One of the key outcomes from the meeting with the Minister was for the City to consider
purchase of Lot 14, including seeking funding from the State Government to support
purchase of the site. Hon Michael Sutherland MLA offered to pursue potential State funding
on the City's behalf.
Following this meeting an urgent business item was referred to the Ordinary Council Meeting
held on 2 August 2016 where Council resolved, inter alia, the City requests the owners of
Lot 14 if they could advise the City if they intend to sell the lot or part thereof in the future.
The other relevant portions of the Council resolution on 2 August 2016 relating to Lot 14 are
as follows:
"….
4.
Should Lot 14, 128 King William Street, Bayswater be available to purchase, the City
requests the Minister for Planning, Minister for Environment and MLA Member for
Mount Lawley for State Government's funding towards the purchase of this land….
6.
Council further consider other mechanisms to protect the wetlands on Lot 14,
128 King William Street, Bayswater should the City not be able to negotiate the
acquisition of Lot 14, 128 King William Street, Bayswater or part thereof….
8.
The City refers a further report to Council updating on the matters relating to the
meeting with the subdividers to discuss the opportunities to provide an appropriate
buffer, sale of Lot 14, 128 King William Street, Bayswater, State Government funding of
the possible acquisition of 128 King William Street, Bayswater and permanently closure
of adjacent portion of King William Street.
9.
Council initiates an amendment to the City of Bayswater Town Planning Scheme No 24
to rezone Lot 14, 128 King William Street, Bayswater from Residential 17.5/25 to
Local Public Open Space Reserve.
10. Council requests the Minister for Planning, to declare Lot 14, 128 King William Street,
Bayswater as a Planning Control Area for Wetlands Conservation."
A meeting was subsequently held on 31 August 2016 between the owners of Lots 6-10 and
their representatives and the Mayor, Councillors and City officers. The meeting explored the
opportunities to provide an appropriate buffer within Lots 6-10 to the Eric Singleton Bird
Sanctuary and alternatives to the approved cul-de-sacs on Lot 14.
The Mayor, Councillors and City officers also met with the owners of Lot 14 on 22 September
2016. At the meeting the option of the City purchasing Lot 14 was discussed. The owners
advised that they would come back to the City with the price they are seeking for the City to
purchase the land.
A follow-up meeting was held with two representatives of the owners of Lot 14 on 20 October
2016. The representatives presented a verbal offer that they considered to be a fair and
reasonable value based on the development potential of the land and undertook to put the
offer in writing.
At its Ordinary meeting held on 25 October 2016, Council modified the 2 August 2016
resolution with respect to Point 9, which relates to the proposed rezoning of Lot 14 and
resolved as follows:
"That Council approves a significant change to the resolution made at its Ordinary Council
Meeting held on 2 August 2016 in relation to Item 8.1 - proposed 27 Lot Freehold Subdivision
- Skippers Row (in relation to the subdivision at Lots 6-10 and 14, 128 and 130 King William
Street, Bayswater and the wetland at Lot 14, 128 King William Street, Bayswater) by
changing section 9 of the original motion to read as follows:
9.
That Council request the Western Australian Planning Commission initiate an
amendment to the Metropolitan Region Scheme to reserve as 'Parks and Recreation'
the area at Riverside Gardens, Eric Singleton Reserve, and Lot 14, 128 King William
Street, Bayswater indicated in the attached 'Proposed Zoning' map".
A meeting was subsequently held with the WAPC Chairman and DOP officers on 27 October
2016 to discuss a number of matters including the Skippers Row subdivision, Council's
resolution of 25 October 2016 and possible sources of funding to acquire Lot 14. A meeting
has also been requested with the Minister for Planning to discuss sources of funding.
The Mayor, Councillors, Acting Chief Executive Officer, and Directors met with owners and
representatives of Lots 6-10 on 2 November 2016 to discuss Council's resolution at its
meeting held on 25 October 2016 to explore further development options for the site. The
owners requested some time to consider their position prior to committing to a process of
exploring alternatives. They undertook to advise the City of their position within two weeks.
The request for the Metropolitan Region Scheme (MRS) amendment and the
Planning Control Area were actioned via letters to the Chairman of the WAPC and the
Director General of the Department of Planning on 3 November 2016.
In accordance with Council's resolution of 2 August 2016 and subsequent to the meeting with
the WAPC, a letter will be sent from the Mayor to the Premier, Minister for Planning,
Minister for Environment, State Treasurer and MLA Member for Mount Lawley requesting
funding towards the City's purchase of Lot 14.
The City received on 2 November 2016 notification from the Department of Environmental
Regulation (DER) in letters, dated 18 October 2016, that both Lot 14 and Lots 6-10 had been
classified as 'Possibly contaminated - investigation required' under section 15 of the
Contaminated Sites Act 2003. The DER have classified the site based on fill from an
unknown origin in approximately 1995.
CONSULTATION
No consultation on this matter has been undertaken to date. Given the community interest in
the matter, an engagement/community plan will be prepared and implemented.
ANALYSIS
The owners of Lot 14 submitted via email received by the City on 3 November 2016 a formal
written offer, dated 31 October 2016, for the City to acquire Lot 14 (Attachment 1 Confidential). The offer is valid until 18 November 2016.
The owners of Lot 14 have indicated that the offer includes the profit that would have been
realised from the development of the site. Securing this profit is contingent upon the
developer accepting the risks associated with the development (eg not obtaining approval,
unforeseen site conditions, project delays increasing financing costs). It is considered
unreasonable for the owners of Lot 14 to expect the same level of profit if the development
risk is passed to another landowner/developer.
The City is obtaining its own valuation report for Lot 14. The value of the property will be
determined based on two methods:
• Direct market comparison value - comparing the site to other similar vacant land recently
sold; and
• Residual value - this method is commonly used by developers to assess the value of a
potential development site by subtracting the costs to subdivide the land (eg site
remediation, earthworks, construction, professional fees, financing, and marketing) from
the expected sales income and profit target. The difference between the costs and the
income is the amount that can be spent on purchasing the land.
The valuation, along with further analysis, will be provided to Councillors when it is
completed.
OPTIONS
The following options are available to Council:
OPTION
1.
BENEFIT
Accept the offer from the •
owners of Lot 14, 128 King
William Street, Bayswater for
the purchase of Lot 14.
Estimated Cost
• As
per
the
received.
RISK
Protects the site from •
future development for
residential purposes.
•
offer
•
•
The funding for the
purchase
is
not
included in the City's
Long Term Financial
Plan.
The
extent
and
implications of the
financial sustainability
of the City needs
further investigation.
The level (if any) of
funding support from
the State Government
is not known.
Existing
agreements
may result in the culde-sac heads for the
subdivision of Lots 610 still impacting on
Lot 14.
OPTION
BENEFIT
RISK
•
2.
Counter offer to the owners •
of Lot 14, 128 King William
Street, Bayswater for the
purchase of Lot 14.
•
Estimated Cost
• Depends on the counter
offer.
Protects the site from •
future development for
residential purposes.
Reduced purchase cost
for the City.
•
•
•
•
3.
Not accept the offer and not •
pursue the purchase of Lot
14 at this time.
Estimated Cost
• Nil.
4.
Request additional time to •
undertake due diligence and
pursue
the
State
Government
to
identify •
funding sources for the
purchase of Lot 14.
Estimated Cost
• Nil at the present time.
In the event that the •
requested MRS scheme
amendment to 'Parks
and
Recreation'
is
gazetted,
the
State
Government will be
responsible
for
the •
purchase and protection
of the wetland on Lot
14.
The implications of the •
purchase
can
be
explored further.
The State Government
may identity funding to
support
the
City's •
purchase of Lot 14.
The
extent
and
implications of the
contamination
and
rehabilitation costs are
unknown.
The funding for the
purchase
is
not
included in the City's
Long Term Financial
Plan.
The
extent
and
implications of the
financial sustainability
of the City needs
further investigation.
The level (if any) of
funding support from
the State Government
is not known.
Existing
agreements
may result in the culde-sac heads for the
subdivision of Lots 610 still impacting on
Lot 14.
The
extent
and
implications of the
contamination
and
rehabilitation costs are
unknown.
May not meet the
community
expectations that the
City acquire Lot 14 for
the protection of the
wetlands.
If the requested MRS
scheme amendment to
'Parks and Recreation'
is not gazetted, there
is a possibility that Lot
14 could be developed
for
residential
purposes.
The
owners
may
withdraw the offer and
pursue development of
the site for residential
purposes.
The State Government
may
not
provide
funding support.
OPTION
5.
Consider the offer and the •
options available to Council
following receipt of the
valuation being prepared for
the City.
BENEFIT
Council will have more •
information to assist
with its deliberations on
the offer.
RISK
Nil.
Estimated Cost
• Nil at the present time.
CONCLUSION
In light of the above, it is recommended that Council consider the offer received for the City
to purchase Lot 14, 128 King William Street, Bayswater and the above options following
receipt of the valuation report being prepared for the City. It is further recommended that the
City continue to pursue State Government funding for the potential purchase of the property.
FINANCIAL IMPLICATIONS
No provision has been made in the City's 2016-17 Budget or Long-Term Financial Plan to
acquire Lot 14.
The cost of the valuation ($4,000) can be accommodated within the City's existing budget.
STRATEGIC LINK
In accordance with the City of Bayswater Strategic Community Plan 2016-2026, the following
applies:
Theme:
Aspiration:
Outcome N1:
Theme:
Aspiration:
Outcome L1:
Outcome L2:
Our Natural Environment
We conserve and manage our natural environment which makes the
City of Bayswater a great place and we live in a sustainable way to protect
our environment for future generations.
Natural environment and biodiversity which is preserved and protected.
Leadership and Governance
We will provide responsible governance and be recognised for operating
with integrity and delivering quality services.
Accountability and good governance
Prudent management of financial resources.
COUNCIL POLICY AND LEGISLATIVE IMPLICATIONS
•
•
Local Government Act 1995 and subordinate legislation; and
City's Community Engagement Policy and Community Engagement Strategy.
VOTING REQUIREMENTS
Simple Majority Required.
ATTACHMENTS
Letter of offer, dated 31 October 2016, from the owners of Lot 14 (Confidential).
OFFICER'S RECOMMENDATION TO COUNCIL
That:
1.
Council notes the receipt of the offer, dated 31 October 2016, from the owners of
Lot 14, 128 King William Street, Bayswater for the City of Bayswater to purchase
Lot 14.
2.
Council considers the offer following receipt of the valuation report being
prepared for the City.
3.
The City continues to pursue the State Government to identify extra funding
sources to ameliorate the financial burden to the City of the potential purchase
of Lot 14, 128 King William Street, Bayswater.
Moved:
Seconded: