DEBATING KINGS SQUARE

There was some further debate over the merits of the Kings Sq project in the Fremantle Herald this week including the rather odd claim that: “Fremantle city council will have to sell the Samson Recreation Centre and Fremantle Leisure Centre carpark to help pay for its new Kings Square HQ.”

I am not sure how the Herald made this link but the Kings Sq business plan doesn’t entertain these sales and there has been no decision by the Fremantle Council to sell either asset and the Kings Sq project certainly doesn’t require it.

That said, it was good the Herald printed the CEO and my response to Martin’s Lee’s critique the week before. We decided not go down the rabbit hole of detailed debate over the Kings Sq financial modelling as not only would this be extremely boring to read but it has been independently assessed and verified several times already.

The Minister for Local Government has been asked by Mr Lee by Peter Tinley to have a fresh look at the business case and happy for that scrutiny to occur.  I would expect the minister will come back with a response that says he is not concerned with the approach the City of Fremantle has taken. I wonder if that good news will make front page too!

Anyway here is the Thinking Allowed in case you missed it:

In last week’s Herald the Kings Square redevelopment was subject to some renewed scrutiny as a result of local resident Martin Lee (who also wrote the Thinking Allowed) contacting Peter Tinley’s office.  We welcome this scrutiny as this is a very big investment the City of Fremantle is making on behalf of you, the ratepayers, but we also need to make sure you’re getting the full story.

Let us say first up and without reservation – We are very confident this project will bring massive benefits to Fremantle. The numbers have been scrutinized not only by council and City staff but also by independent experts who all agree this is a worthwhile investment the City is making.

More than just bricks and mortar or dollars and cents

So why was Mr Lee criticising the business plan? At the heart of his criticism is a different perspective of the role of a local government.

Mr Lee has looked at the Kings Square Project in isolation, running the numbers through his models which spat out figures he believes don’t add up.

What Mr Lee hasn’t done is put a value on the broader flow-on effects of the Kings Square Project as being a catalyst for further redevelopment and investment in Freo, as well as the raft of social benefits that come with more people working and shopping in Fremantle.

Mr Lee has not looked at how the project will double the size of the community library; or bring with it a new Fremantle Visitor Centre and new public toilets with much-needed baby change facilities. He has not put a value on the new public spaces in Kings Square for people to enjoy, the value to the local economy of 1,000 new office workers, nor has he put a value on the pride we’ll all have in our new city centre.

Mr Lee would like the Fremantle Council to behave in a manner similar to that of a landlord or developer and look at the Kings Square Project purely as an economic investment. But the Kings Square Project is much more than an economic investment – It’s an investment in the very future of Fremantle and is arguably the most important project of our generation.

You can imagine someone with a similar mindset to Mr Lee in 1885 making exactly the same case as to why the Fremantle Council of the time shouldn’t build the town hall when ‘that shed down the road’ was just fine.

How did this opportunity come about?

With the departure of Myer, a once in a generation opportunity arose for a coordinated redevelopment of the very tired looking Fremantle city centre.  Part of this was a chance to provide office space for a major government department to be located in Fremantle. With around 1,000 office workers in the heart of Fremantle we saw this as a great kick-start to helping revitalise Fremantle’s struggling retail sector as well as providing much improved community facilities and a town square we can all be proud of.

The project, to be fully integrated, required a partnership with Sirona Capital who owns the Myer building. The business plan for this proposal was publicly advertised and heavily debated by council and the community in 2012. Put simply, it involved the City selling the Queensgate Carpark and out-of-date cinema building (at a public and independently verifiable valuation) and reinvesting those funds in a new library and civic centre (designed by the winner of Fremantle’s first international architectural competition – Kerry Hill) and town square. Sirona’s commitment is to renew these buildings within an agreed timeframe, with the approved plans providing around 30,000 sqm of quality office space and 12,000 sqm of retail space.

 

Frustrating delays

This project has a total value now nearing $250 million and a project of this size takes time to materialise.  Getting started requires a formal commitment from a tenant to occupy a significant amount of the commercial space that will be created by this development.  Our joint efforts to date have been focussed on getting that commitment from the state government which announced in 2012 that the Department of Housing would be relocated to Fremantle.  Negotiations with the state have been slow and at times frustrating. I know some people are pessimistic about the project proceeding, but we are expecting an announcement in the coming months which, if positive, will kick this project along.

 

Fremantle Council – Driver or passenger?

Local governments aren’t just about road, rates and rubbish nor should they behave purely like profit making corporations. Yes, the Fremantle Council must always behave cautiously and responsibly with ratepayer funds, but our role is also to make decisions to ensure Fremantle realises its potential as Perth’s second city.

At the very core of this debate is whether you believe the Fremantle Council should be a passenger or in the driver’s seat in Fremantle’s economic recovery. This is a crucial time for Fremantle‘s future so I have no doubt this is the right time for this investment. But don’t take our word for it – check out the project and the business case for yourself at www.fremantle.wa.gov.au/kingssquare.

 

Fremantle Mayor – Brad Pettitt

City of Fremantle CEO – Graeme Mackenzie

About Mayor of Fremantle Brad Pettitt's blog
City of Fremantle Mayor

2 Responses to DEBATING KINGS SQUARE

  1. Craig says:

    Brad, you seem quite dismissive of the financial debate considering the significant commitment of the project.

    Boring maybe. Is it necessary – well probably – as a ratepayer I want to know the financial analysis has been competently and professionally undertaken and correctly presented to the public and councillors.

    Do you stand by the financial assessment presented to ratepayers in the business plan (base case – net present value of $4m and internal rate of return of 6% and debt repayment period) ? Can you share who are the independent financial modelling assessors & their report conclusions ?

    • Craig
      Not dismissive just confident that this well worn debate has been properly tested already. The business plan is on the web for all to see and I’ll get the detailed response to Mr Lee’s questions put up as well.
      The Minister for Local Government’s office will also look over it now which is not a bad thing and assuming a positive response from them a further reason for confidence in the approach that Freo Council is taking.
      Good to see ratepyaer interest in this key Freo project
      cheers, Brad

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