Council to pay $17.9 million in interest for Cultural and Civic Space project

Projected interest, legal and demolition costs for the Cultural and Civic Space project have been released by Coffs Harbour City Council. Photo: Coffs Harbour City Council.

 

PROJECTED interest, legal and demolition costs for the controversial Cultural and Civic Space project have been revealed by Coffs Harbour City Council.

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A Council report on the projected costings of total interest, legal fees, the demolition of existing buildings on Gordon Street and the percentage of the proposed storage building to be used for art gallery and museum offsite storage was presented to councillors at Council’s meeting on 12 November.

The total construction cost for the Cultural and Civic Space project is budgeted at $76.52 million, with $46.02 million forecast to be borrowed by Council.

The total interest cost, over a 30-year period at an assumed fixed rate of 2.3% is $17.9 million.

As of 31 October, 2020 there has been an amount of $85,920 expended on legal costs.

These costs have been provided for from the total $76.52 million project budget.

Demolition costs for existing buildings on the Gordon Street site of the proposed Cultural and Civic Space project amount to $199,258, with demolition works currently being undertaken on the site.

This cost has already been budgeted for in the total project costs of $76.52 million.

The preliminary design of the storage facility has indicated that approximately 70% of the building will be utilised for the art gallery and museum.

The budget for this project is $2.6 million, and therefore the art gallery and museum components of the project are estimated at $1.82 million.

A further report will be presented to Council on the storage facility.

A Council report stated that “this project has been considered essential with or without the Cultural and Civic Space project proceeding as the previous storage facility being used was not meeting the standards required to store the important historical collection held by the museum, and the complete lack of storage currently available for the art gallery”.

Cr Paul Amos expressed his concern at Council’s 12 November meeting about the increasing amount of interest Council would be forced to pay not only the Cultural and Civic Space project borrowings, but for other projects it now had to borrow money for.

“Over this last little while we have had issues factor themselves in such as the Woolgoolga Sawtell pools we need to find $6 million dollars, Woolgoolga Multipurpose Centre we are still short $6 million, the Jetty structure $18 million,” Cr Amos said.

“I’m just adding these numbers in just to put in councillors minds as to the ongoing commitments that haven’t been factored into our capacity to pay.

“There’s a lot of things in front of us now that weren’t there when we took this on, I think we should be mindful of that as we move forward.”

Cr Amos was concerned that Council hadn’t secured the finance for the Cultural and Civic Space project yet.

“Why haven’t we sought the loan, normally when you take on big projects you have the finance in place up front,” Cr Amos asked Council.

“We’ve got interest here of $17.9 million, that will give us payments of $177,000 a month.

“If we double up with all these others (projects) can we pay $300,000 a month, I’m not so sure.”

Cr Amos also questioned Council having to borrow even more money for the project if it doesn’t sell its existing Council buildings.

“We were going to sell $20 million dollars worth of property to fund this, now if that doesn’t happen we’ve obviously got to borrow it,” Cr Amos said.

“We’ve already pulled out of the Museum sale at one meeting, so we know in the short term that’s not happening.

“Now, we are coming off the back of a deficit of $16 million dollars this year, again, factor that number in.”

 

By Emma DARBIN

4 thoughts on “Council to pay $17.9 million in interest for Cultural and Civic Space project

  1. I am so glad that everything is open and transparent. There will always be unexpected costs in life. This council has proven they can pay money back and on time. Our current and future generation need this. The watered is changing and we must provide them the opportunity to keep up and for the older generation that want to keep up they have the same opportunities. There is no reason to not go ahead.

  2. Over the past 25 years , I have been involved on either a personal level, or, have provided feasability studies for proposed developments, within the Coffs Harbour region.
    To project a funding interest cost, it is common practice to average the rate for the preceding years, for the length of term suggested. A 2.36% suggested rate for 30 years can only be taken seriously if there has been a funding source secured.
    This development does not appear to have a profit and risk factor included in any of the assessments.
    At this early stage, how this development has come undone due to about 40% of the cost, being the sale of property, not happening, it must be scrapped.
    To suggest a $76.3m cost is laughable. Has there been a fully blown geo tech study undertaken? When were the bore holes sunk? Were there bore holes? If there weren,t any, then this whole thing is total bullshit.
    Interest cost assessment – wrong
    Feasability/ profit and risk assessment – wrong
    Sale of property to fund major portion of cost – wrong
    Complete site analysis ??

  3. Why is the interest surprising? On an average home loan of $400K, even at today’s low rates, interest is $169K over the loan term.
    There’s way too much hype, vile, & hatred shown towards this project and those supporting it.
    All too often we hear people telling council they need to create jobs in Coffs. Yet, here we are with a project to draw people and jobs to the CBD, and we have folks up in arms about it! No wonder the head of Park Beach Plaza is so anti the development, given the potential to detract from their business.

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