Coffs Council switch banks as Westpac changes Civic Space loan terms

With a lender yet to be confirmed, the council has moved quickly to reject rumours of its own rejection.

UPDATE: Coffs Harbour City Council have moved to dispel “misinformation” over a $50 million loan it has been trying to secure to fund construction of the Cultural and Civic Space.

The council posted a statement on their ‘Heart of Coffs’ Facebook page following a significant amount of media and online commentary over the loan which is set to be discussed at Thursday’s meeting.

It reiterated the process council went through to find a lender which would offer a 30-year loan, including that it did not seek a loan from TCorp, the state-owned organisation with highly competitive rates.

TCorp has long been cited as a potential lender and there is a belief in the community that it was the council’s preferred lender. Subsequent commentary online has suggested TCorp rejected a loan application from the council.

“As TCorp are not willing to offer a 30 year fixed rate loan, the Council has never requested a loan from TCorp for the project. Therefore Council did not have a loan rejected from TCorp,” council stated.

Council also said it was not “rejected” by Westpac but that the bank had offered only a 20-year term, something the council was not interested in pursuing.

A concept drawing of the roof top terrace.

EARLIER: A proposed loan lauded by Coffs Harbour City Councillors for its ‘quality’ terms has turned out to be too good to be true.

In July, councillors agreed to borrow $50.265 million for the construction of the Cultural and Civic Space on a 30-year fixed term contract with Westpac, only for the bank to later come back and say it was not prepared to offer a loan period of more than 20-years.

Before the decision was taken, a number of councillors praised the loan and Cr Michael Adendorff said he had “never seen such an endorsement” from a bank to a client.

“I cannot believe the quality of these terms,” Mr Adendorff said.

Cr George Cecato wished to know how council staff had secured such favourable terms, calling it an “incredible achievement”.

While the exact rate is contained in a confidential document, in praising the loan and the council staff’s work to secure it Mr Cecato said the contract was at “2.45 per cent — or thereabouts”.

But now it appears Westpac has pulled the pin on the offer and Council is on the hunt for another lender.

On Thursday evening Councillors will consider a recommendation that they approach the Commonwealth Bank for a 30-year agreement.

“Despite Council meeting all the parameters of this approval, including ratios, financial metrics and affordability, Westpac decided it was not in a position to offer a 30-year term even though this was the terms provided for in the Expression of Interest (EOI) process,” a council report states.

“Council officers have highlighted Council’s disappointment that an EOI would be submitted without having first considered an internal sign-off of the salient points of the offering.” In response to the change, Paul Amos reiterated his position that the finance should have been in place “a long time ago”.

Councillors George Cecato and Paul Amos. Photo: Tim Jarrett

Mr Amos also held concerns about the modified development consent which he said had still not been approved by the state government. Without it construction on the project could not progress beyond piling and excavation.