Council strikes deal with Brisbane Rd hotel developer

A deal is now under way for a 4.5-star hotel to be developed on a prime piece of Mooloolaba land, despite passionate objection from one Coast councillor.

A DEAL is under way for a 4.5-star hotel to be developed on a prime piece of Mooloolaba land, despite passionate objection from councillor Joe Natoli who was forced to fight for a place in yesterday's debate.

Sunshine Coast Council has endorsed KPAT Asset Management Propriety Limited to buy and develop the remaining Brisbane Rd carpark land with international hotel and resort chain Minor Hotel Group on board to operate the proposed 160-room, 158-carpark hotel.

Councillor Peter Cox tried to have Cr Natoli booted from chambers before council debated the matter yesterday, with claims the Division 4 councillor had a perceived conflict of interest and was "incapable" of making an unbiased decision in the public interest.

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Cr Natoli, whose division includes Mooloolaba, had said during his election campaign that he would do everything in his power to stop the outgoing council making a decision on the proposal before the new council had an opportunity to review it and make a decision.

Though Cr Natoli was found to have a perceived conflict, only Cr Cox voted against him remaining in the room.

All councillors except Cr Natoli voted in favour of acting CEO Warren Bunker negotiating and executing contracts for the development and sale of the portion of the site.

Mr Bunker said an evaluation panel concluded in early 2020 that KPAT's submission was the stronger and more advantageous to council and the community, due to superior design and highest offer price for the land.

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"It is anticipated that subject to successfully negotiating the necessary contracts and the proponent obtaining the requisite development approvals, approximately 186 construction workers would be involved throughout construction with an ongoing 137 jobs in the local retail and accommodation sector," Mr Bunker said.

Mr Bunker said details of the site valuation and sale price would be made public in coming days, once he had signed off on the agreements.

Business development manager Paul Skillen said the land had a history of failed development attempts since 1998.

Proceeds from the deal will help offset the costs of the $18 million multi-deck carpark under construction by Evans Built on the adjoining land.

Mr Skillen indicated the latest valuations were lower than the previous $8.4 million, which had omitted an easement which could restrict what the property owner could build there.

He said the original valuation was based on the property being used for residential units.

Construction is due to start in mid-2022 and finished late 2023, subject to development approval being obtained late next year.

Cr Natoli raised a number of objections, including fears the number of carparks, being less than the number of hotel suites, could compound the tourist town's existing parking woes.

Mr Skillen confirmed the Planning Scheme did not specify how many carparks to rooms were required for a hotel, and that the proposal did not include staff parking.

Cr Natoli also raised questions about the expression of interest process, and questioned why one applicant who offered a fully-serviced, five-star Hilton Hotel did not get a "look in".

He said the other proponent who was not invited to compete in the closed tender process was a "local builder" who pitched a combination of office and hotel space, a $9.5 million sale price and 30-day settlement from acceptance.

Mr Skillen said that the proposal from the successful tender carried more weight, as the hotel was embedded in the consortium, while the unsuccessful applicants provided the equivalent to expressions of interest from hotel operators.

Cr Natoli also hinted at concerns the hotel may ultimately be used for long-term accommodation, given the average room size was 59sq m, compared with smaller rooms in other proposals and an average 41sq m in Aria's completely separate five-star Mooloolaba hotel development.

"It doesn't make sense. They could fit 300 rooms on this site and some of the proposal I saw got close to that: 290 was the maximum," Cr Natoli said.

"These have all got verandas. They've all got dual key."

He said there were currently protections that required a hotel development, but that those protections fell away after the approval phase and short-term accommodation could be turned into long-term.

Council officers confirmed Cr Natoli could call the development to a full council meeting should he have concerns in future.

Mayor Mark Jamieson had withdrawn from the chamber ahead of the debate as his superannuation fund holds a 25 per cent interest in a Mooloolaba Esplanade property located about 700m walking distance from the Brisbane Rd carpark site.

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