Misunderstandings over Cultural and Civic Space

The Coffs Coast Advocate requested a response from Council yesterday (9 July 2019) to comments it had obtained on the proposed Cultural and Civic Space by local businessman Steve Gooley and ex-politician Andrew Fraser. Council provided a response, but it was not used in the Advocate edition of 10 July 2019. It is reproduced below for community clarity.

Council Response:

Comments made today by a local businessman and a former politician contain a catalogue of misunderstandings and misconceptions over the funding and costs of the proposed Cultural and Civic Space.

First of all, it should be pointed out that the development of the Concept Business Case was done in conjunction with an external project management company with public and civic buildings experience which provided expert project management guidance and input. In addition, two independent external quantity survey firms were involved in the cost estimations required.

The Concept Business Case shows that the total project cost is estimated at $76.52m. This total cost will be offset by $20m in asset sales – the sales of Rigby House, the current Council Chamber building, the Museum and buildings in Rose Avenue. The $20m estimate is a figure provided by independent valuation.

In addition, a further $10.5m from internal cost-saving reserves is to be used. This brings the net cost of any possible borrowings required to $46.02m.

Fact 1: Council will not be servicing a debt of $75m, as stated by businessman Steve Gooley.

We are actively pursuing Federal and State grants to further cut the $46m borrowings. It’s correct that Council does not have grants at the moment, but we will continue to apply.

Even if the final loan is $46.02m, we are currently able to borrow loans at a 2.6% PA fixed rate for 20 years from the NSW Government’s Treasury Corporation (T-Corp). We are able to access these rates from T-Corp because the NSW Government has declared us a financially sustainable council under its Fit for the Future criteria.

Fact 2: The proposed borrowing costs of a debt of $46.02m would be $1.9m pa.

Council’s total borrowings would remain well within the Debt Service Ratio target set by the NSW Government

Fact 3: The proposed borrowings leave plenty of capacity to provide the means to undertake other projects that the community requires.

Businessman Steve Gooley also misunderstands that the building is not a simple office building with identical floors such as Gateway House. The building will be predominantly cultural – and that requires a very different building approach which explains the cost per square metre to build. As the Concept Design shows, the building will have different floor sizes, heights and layouts to accommodate the required spaces that a cultural building needs.

Fact 4: You cannot compare a simple office building built over 10 years ago to a cultural facility built in today’s market. Mr Gooley’s estimates of cost per square metre are incorrect.

Mr Gooley said: “I think they’ve overstated the council buildings valuations by well over 200-300 percent”.

Fact 5: The valuations were provided by independent expert valuation, not Council.

A former politician has also made incorrect statements regarding the proposal. Andrew Fraser has said: “From what I can see their back up plan is to sell the airport to cover the cost of it and the airport is bringing in quite a reasonable return on investment at the moment.”

Fact 6: Council is not proposing to sell the airport. The proposed airport lease, should Council proceed, has nothing to do with the Cultural and Civic Space project.

Mr Fraser goes on to suggest that the gallery should be on City Hill, a site that is remote from the CBD and public transport links.

However, as has been explained to Mr Fraser on numerous occasions, current best practice in urban planning states that having a cultural precinct in the heart of a city centre provides the vibrancy, cultural and economic benefits to areas that can otherwise be lifeless outside business hours. It also means that public transport links are close by.

He also claims that Council can “add a couple of new storeys to the current council chambers”.

Fact 7: This is not possible. The building can only accommodate one additional storey and the business case for this option did not stack up.

Detailed information on the proposed Cultural and Civic Space is available on Council’s Have Your Say website – haveyoursay.coffsharbour.nsw.gov.au/cultural-and-civic-space