Coffs Council to sell Rigby House, secure $50m loan for Civic Space

A sensational comparison between Council and 25-year-old first home buyers was rejected as ‘fatuous’ in a fiery start to proceedings.

Keith Rhoades has sensationally compared Council to a couple of 25-year-olds trying to build their first home while railing against the process to secure a loan for the Cultural and Civic Space.

The Coffs Harbour City Councillor, a long-term opponent of the project, didn’t hold back as he urged his colleagues to reject a motion to seek a 30-year loan with the Commonwealth Bank to pay for the highly divisive building.

The $50M loan has been the subject of controversy after Westpac decided against offering a loan on Council’s stated term of 30-years despite entering into a expressions of interest process.

After suggesting the council had gone about it “completely the wrong way” Cr Rhoades likened the loan process to a young couple who had “scrimped and saved” up a deposit for a house.

Cr Keith Rhoades. Photo: Tim Jarrett

“They would not sign a contract with a builder to build their home without going to the bank to get the remaining amount of money required through means of a mortgage,” he said.

“(The project) was rush, rush, rush from the start.”

That was flatly rejected by Cr Sally Townley who said the project had been the resolved position of Council for some time and comparing a municipal authority to a young couple was “fatuous”.

She said while it was unfortunate that two potential sources of funding, TCorp and Westpac, had not proceeded it did not mean there had been any problem with the council’s financial health or “wrongdoing” in the process.

“There was never any doubt of Council being able to source the funding, it’s always been a matter of where,” she said. “And we have been in the lucky position that we actually have had a lot of options.”

It was a fiery start to a series of motions on the Civic Space project, which also included the sale of the Council-owned Rigby House.

The Cultural and Civic Space.

Councillors eventually resolved to seek the loan from the Commonwealth Bank which several councillors again praised for its favourable terms.

Unusually, the vote did not go down in the traditional 4 – 4 split, with Tegan Swan joining Denise Knight, Sally Townley, George Cecato and Michael Adendorff to pass the motion.

Rhoades remains on the offensive

Cr Rhoades’ criticisms of the project didn’t end there and in echoes of past chaotic meetings, a late offer threatened to derail debate over the sale of Rigby House, the building which contains the council’s public library and art gallery.

Council listed the building for sale, along with three others, in order to fund the Cultural and Civic Space being built around the corner on Gordon St.

While the sale price is listed as $11,750,000 it includes an arrangement that will see the council lease the building for up to three years at a cost of almost $940,000 a year.

Cr Rhoades called it a “fire sale”.

“This is not the best price,” he said. “In actual fact what you should be telling the community that it is not $11.75m, you are actually only achieving somewhere in the vicinity of $8.5 million.”

“That is the classification of being nothing but a fire sale and a desperate bid to get money to pay bills for the new council chambers in Gordon St.”

Council buildings up for sale. Rigby House. 09 AUG 2019

He then dropped the bombshell that a late offer had been received on the building and urged fellow Councillors to reject the motion to consider it.

Director of Business Services Andrew Beswick emphasised that the offer was only “marginally” better and said the reason it was not under consideration was because they had made it clear to all parties involved that no late offers would be accepted.

That instigated a wide ranging debate in which councillors weighed up the ethics of allowing someone to be gazumped at the last moment versus getting a better price for the property.

Cr Adendorff said council was achieving market value and he had “no doubt” they were making an informed and “very rational” decision in order to move forward “for the betterment of our local community”.

Cr Tegan Swan had concerns that the massive solar array on top of Rigby House had not been taken into account in the valuation of the building.

Cr John Arkan suggested the best way to get a fair price was to hold an auction and he questioned whether the current sale price might affect other property values in the CBD. But his attempts to change the minds of his fellow councillors was ultimately in vain.

Regular service then resumed and Councillors were once again split down the traditional four – four lines, with Crs Denise Knight, George Cecato, Michael Adendorff and Sally Townley voting to proceed. Mayor Knight used her casting vote to secure the sale.

Council has held the building since 2000, when the three-level commercial office building was purchased for just $3.1 million.

Last month, in a series of dramatic meetings, Councillors opted to not proceed with the sale of chambers on Castle Street in order to wait for a report on a future entertainment centre. The sale may not proceed if the report indicates Castle St could be a site for the centre.

In a statement released on Friday, Council general manager Steve McGrath said the two decisions were very positive for the community and the Cultural and Civic Space project.

“This is a huge win for the community well into the future and provides the certainty that is needed right now,” he said.

“Council financial modelling for the project always included a 30 year borrowing and being able to fix the interest rate for a period of 30 years removes any future interest rate risk for the Council and therefore the community.”