REVEALED: Major hurdle holding back Brampton revitalisation
Island salesman says it was under contract but potential buyer suddenly pulled out
Mackay
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THE German island resort salesman, tasked with selling Brampton Island, says there is one major hurdle stopping a raft of international hoteliers from putting in a bid for Mackay's forgotten gem.
Farhad Vladi told The Daily Mercury that investors were put off by not being able to buy the island outright; instead they were only able to buy the leasehold from the State Government.
Like all Whitsunday islands, Brampton is owned by the State and the resort managers hold only the leasehold over the land.
"This leaves a lot of questions for insurance," Mr Vladi said from his Hamburg office.
"And it is a lot of money to spend when you have a third party telling you want to do."
The complaint has been heard before, as Fitzroy Island and Lindeman Island owners both tried but failed to convert their leases into freehold ownership in 2013.
It was to escape the conditions and purpose of the leases and avoid annual rent costs to the government, which are 6 per cent of land value. For Brampton, that is $120,000 a year.
About 64% of land in Queensland is held in the form of some type of leases issued by the State over State (or Crown) land.
Leases are issued over state land for a number of purposes including leases for pastoral purposes in the northern and western parts of Queensland, commercial or industrial purposes and large tourism complexes over Queensland islands or prime sites.
A Department of Natural Resources, Mines and Energy spokesperson explained the Brampton Island lessee held a 'perpetual lease' over the main resort area, which means the lease "continues without an end date until it's terminated by one of the parties".
The spokesperson confirmed on Thursday there had been no applications to convert the Brampton Island lease to freehold, which would mean the buyer would pay the lease in instalments similar to paying a mortgage, with the lease being converted to 'freehold' on receipt of the final instalment.
As a Cabinet discussion paper explains, a freehold landholder is free of the restrictions and red tape relating to the use of the land and could therefore explore investment opportunities to improve the land like subdividing or developing it.
"Given the high environmental and economic value of Queensland's tropical islands, there has been a long standing convention to not allow these type of island leases to be converted to freehold," the DNR spokesperson said.
Islands off the coast of Mackay that have leases from the state include Brampton and Lindeman islands, Keswick Island and there are also a number of smaller residential leases on other islands in the region.
The leasehold for Brampton island, 32km north-east of Mackay, has been valued on Mr Vladi's website at $20million.
The resort went on the market in November 2017, after six years of sitting in disrepair at the hands of owner United Petroleum, which bought it for $5.9million.
Back then, United Petroleum had plans to build a seven star resort and return it to its former glory when it was the tourism hotspot for Mackay.
Mr Vladi said the island had come close to selling two weeks ago but the offer had been withdrawn.
The chief executive of Hamilton Island, Glenn Bourke, said in the 14 years since the Oatley family had bought the island resort from Bankers Trust, they'd had invested $500million.
This had been spent on major capital works and constant refurbishments.
"The by-product is the reputation of the island improves, it becomes a focal point for the Whitsundays and visitor experience is better as well," he said.
"Brampton really needs an investor who understands the capital investment in the short term is significant, it brings the resort up to certain level, then continues to reinvest to improve and stay at that level.
When Brampton was in full swing it not only had a lot of trade from long term visitors, it had a lot of tourism trade out of Mackay day trips.
Mayor Greg Williamson wrote to United Petroleum in February asking what steps had been taken to restore Brampton as a tourist attraction.
United Petroleum was approached for comment.
History of Brampton:
BRAMPTON Island first became a resort in 1933 when the first European owner, Joseph Busuttin's sons welcomed passengers from SS Canberra.
The family then sold the resort 26 years later.
Mackay cruise operators, Roylen Cruises bought the island in 1961 for 80,000 pounds.
The business was started by for World War II Army Engineer Tom McLean, who had a fleet of ships travelling between the island and the Port of Mackay.
Under the ownership of the McLean family, Brampton Island became very popular with cruises to the reef and then back to Mackay.
Mackay had another influence on the island too, a small cane railway system was established on Brampton to run food and equipment from the deep water jetty to the resort.
In 1965 it had another large upgrade, with the construction of a small airstrip, a swimming pool added in 1972 and it became less formal to fit in with the social mood of the 70s.
It was at that time it became very popular, John Farnham had his honeymoon there, The Police visited along with many other stars.
Trans Australia Airlines bought the island in 1985 and upgraded the resort before selling it to P&O Resorts in 1997.
They spent $3 million on refurbishing the resort before selling it on to Voyages.
Voyages sold the resort in 2010 to United Petroleum which closed it in 2011.
Originally published as REVEALED: Major hurdle holding back Brampton revitalisation
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