Offer made for Bega Valley Shire-owned commercial building

Owned by Bega Valley Shire Council, the offer comes six months after it was placed on the market with Sails Real Estate.

On Wednesday, June 7 council will hold an extraordinary meeting to discuss the sale.

Unless the offer is considerably under market value it is likely to be accepted given council's finanical position and its desire to free itself of what it sees as unnecessary assets.

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Council staff are recommending that council delegate authority to the CEO and the mayor to negotiate the sale for a minimum value as determined by council.

The two-storey building on 3421 square metres was once a purpose-built training centre which has since been rezoned B2 Local Centre offering opportunities for development of accommodation, retail, hospitality or office space.

Council bought the building in August 2015 after it was placed in the hands of the liquidator, Deloitte, when Auswide, a not-for-profit training organisation ran out of funding and government contracts.

The building was bought for $1.293 million plus GST and had a mortgage attached to it of $556,200. However this mortgage reduced to zero in 2018 under the proviso that the building was used for training in accordance with the NSW State Training which originally gave the conditional grant to Auswide to expand the facilities.

Council used borrowings to fund the purchase with the aim of creating a training facility for the shire.

But council found it difficult to make the facility commercially viable and with a change of councillors and council philosophy there was little appetite for the venture.

Council acknowledged the prolonged disposal process (talked about since 2020) had made it challenging to attract and retain tenants due to the inability to provide long term security of tenure.

Staff highlighted ongoing liabilities related to building management, the cost of operating the facility and future costs to undertake major works, should the building stay in council ownership.

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The appetite to sell has grown given council's financial situation.

Council staff have recommended proceeds of the sale should be internally restricted for reinvestment into property development that supports social and economic outcomes combined with financial return to council.

However council may also "use funds generated from land disposal to leverage acquisition of other land critical to the orderly development of important urban or environmental areas, to supplement its revenue sources and minimise the demand for increasing rates above rate-pegging, or a reduction in services".

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