Council Minutes - Town of Cambridge

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COUNCIL MINUTESTUESDAY 26 JUNE 2012So far, the development has yielded $25.6min gross sales, which has been applied to thedevelopment costs of the subdivision, including financing costs ($9m), the development costsof the Floreat Sporting Precinct ($6.5m + $1.1m interest) and transfer $8.9m to the EndowmentLands Account (net of holding costs).As a result, the Endowment Lands Account currently has a balance of $9 million.DETAILS:Since early 2008, the property market and, in particular, the Ocean Mia lot value hasexperienced a negative 15% to 20% correction and has remained flat over that term. There aresigns now that the property market is starting to turn the corner, with key indicators supportinglow to moderate growth over the next twelve months.From that perspective, the timing is good to consider releasing the next stage of lots, driven bythe Town's cash flow requirements for capital projects and not from an investment perspective.There remains 33 lots unreleased in the 'Cityside' and some of these lots have stunning viewsof the City. The confidential attachment to this report discusses the sales strategy in relation tothese lots.POLICY/STATUTORY IMPLICATIONS:Disposal of propertySection 3.58 of the Act requires the disposal of land to be by public auction, tender or privatetreaty. If the later is opted for, local public notice must be given inviting submissions.Delegation of AuthoritySection 5.42 of the Act allows Council to delegate the power to dispose of land to the ChiefExecutive Officer, and Section 5.43(d) limits the delegation where the value of the propertyexceeds an amount set by the Local Government.FINANCIAL IMPLICATIONS:It is estimated that the remaining lots have a combined value of around $20 million.STRATEGIC DIRECTION:The Strategic Plan states that:Financial Sustainability - Ensure strategies are in place for maintaining the Town's wealth.We will plan to prudently invest the land proceeds due to the Town over the next five years,such that both current and future generations benefit.The recommendation is consistent with the above objectives set by the Town.COMMUNITY CONSULTATION:This matter has been assessed under the Community Consultation Policy. In accordance withthe assessment criteria it was rated at Level 1, for which no community consultation is required.H:\CEO\GOV\COUNCIL MINUTES\12 MINUTES\JUNE 2012\C CR.DOCX 183
COUNCIL MINUTESTUESDAY 26 JUNE 2012ATTACHMENTS:1. Sales Strategy Review by the Town of Cambridge (CONFIDENTIAL)2. Project Financial Statement – Ocean Mia and the Floreat Sporting Precinct.3. Ocean Mia Estate Plan.ADMINISTRATION RECOMMENDATION:That:-(i)authority be delegated by an ABSOLUTE MAJORITY to the Chief Executive Officer to:-(a)progressively release the remaining single residential lots in Ocean Mia ‘City Side’(comprising of Lots 539 to 572), by either:-1. public auction; or2. private treaty;(b) consider submissions under Section 3.58(3)(b) of the Local Government Act 1995;(c)(d)determine the reserve price for each of the single residential lots auctioned under (i)(a) (1) above;administer the provisions of the sales contract including invoking clause 15.1, if theChief Executive Officer deems necessary, and proceed to dispose of the lot byauction or private treaty subject to the requirements of Section 3.58 of the LocalGovernment Act 1995;(ii)(iii)(iv)for the purpose of (i)(a)(2) above, the disposal is to be considered by Council if theproperty value exceeds two million ($2,000,000) dollars;the Chief Executive Officer obtain market valuations from two licensed property valuersengaged for this project and set prices in accordance with those valuations, but not lessthan the lowest valuation;authority be delegated to the Chief Executive Officer to commence an Expression ofInterest process for the disposal of the two multi-residential lots at Ocean Mia (Lots 501and 560), should he deem appropriate after an assessment of market conditions, becontinued.AmendmentMoved by Cr Langer, seconded by Cr WalkerThat clause (iv) of the motion be deleted.Amendment carried 5/0H:\CEO\GOV\COUNCIL MINUTES\12 MINUTES\JUNE 2012\C CR.DOCX 184
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Council Minutes - Town of Cambridge

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