West Torrens Council delivers $14m budget deficit after multimillion-dollar contribution to Crows HQ

An Adelaide council has delivered a $14m operating deficit after it had to give the Crows millions toward its new oval and HQ project.

A western suburbs council will deliver a staggering $14m operating deficit for the 2023-24 financial year, with a multimillion-dollar investment in a new home for the Crows contributing to more than half of the budget blowout.

It comes despite West Torrens Council projecting a $4.25m operating surplus just a few months earlier.

West Torrens said the large budget discrepancy was the result of “some one-off/extraordinary items”, including an $11.26m contribution towards the new Adelaide Football Club headquarters – resulting in a $10.8m budget overspend, documents show.

Elected members last year voted to grant the Crows a 42-year lease to establish its $100m training and administrative HQ at Thebarton, a move that sparked backlash from local residents who feared the decision would mean less funding for other community projects.

A West Torrens spokesperson said council had already committed $9.47m to upgrade the Thebarton Oval Precinct but then decided to increase that funding to $11.26m after entering into lease negotiations with the Adelaide Football Club.

The proposed Adelaide Football Club HQ at Thebarton would see the clubrooms and high-performance centre facing west from the South Rd side of the oval. Picture: supplied.

The spokesperson added council initially assumed the funding would be included in the 2024/25 budget but instead the contribution “was recognised as at June 30, 2024”.

They said the investment would provide around $45m worth of community infrastructure both the football club and community could use.

“For many years the oval has been locked up and unavailable for our community. However, as a result of the overall investment in the Thebarton Oval Precinct, the oval will become available to our community for around 70 per cent of daylight hours,” they said.

A 2023 independent economic analysis estimated the precinct redevelopment was expected to generate approximately $981m in “economic output to greater Adelaide”, also benefiting local business, they said.

“This $100m project by the AFC will also enable council to generate additional rates and lease fees of more than $11m.

“Whilst council’s contribution has resulted in a budget deficit this year, council continues to remain financially sustainable and is forecasting a budget surplus of $4.738m in 24/25.”

The spokesperson ruled out a rates increase to fund the project and said the move meant council has cut $11.26m in capital expenditure from the 2024/25 financial year.

Other costs that exceeded council’s budget last financial year include an almost $3.5 overspend on contract and material expenses, which were “largely the result of end-of year adjustments for minor capital works being expensed rather than being capitalised as budgeted”, council documents said.

Documents also show community asset costs went over budget by more than $1m due to infrastructure depreciation.

This is the first deficit West Torrens Council will deliver in five years.

Originally published as West Torrens Council delivers $14m budget deficit after multimillion-dollar contribution to Crows HQ