Kingborough Council will pay $600,000 in interest on loans for Kingston Park

There are delays to some stages of the Kingston Park development, which has lead to an expensive flow on effect for the council. Here’s why + How much it will have to fork out per year.

Artists impression of the proposed Kingston Park Hub, which is part of the Kingston Park development. Pic: nettletontribe

There are delays to several developments which will form Kingston Park, as the council faces construction challenges, and the flow on effect is expensive.

At Monday’s Council meeting, Kingborough Mayor Paula Wriedt said the council was now in a position where it has to pay interest on loans taken out for Kingston Park.

“There are some loans in relation to Kingston Park that are now accruing interest, that were originally interest free,” she said on Monday.

“That has had an impact on our bottom line, the interest is around $600,000 per year.

“It had initially been anticipated when we entered into the agreement with the developers for Kingston Park that it would have been completed by now and we would have been recouping all of the money from a majority of the stages.”

Artists impressions from 2019 of the proposed development of Kingston Park at the old Kingston High School site. Plans: Conrad Gargett

Ms Wriedt said the were many reasons why construction had not commenced on some stages of the development.

“Unfortunately in that time there’s been a range of factors, including the pandemic, which effectively halted a lot of work and then of course there’s been a significant upturn in building and construction costs and council and developers are not immune to that,” she said.

“The continued development of Kingston Park has been delayed as it’s not the climate at the moment for the developers to be able to make a profitable investment for them.”

She said the council had been in talks with the developer.

“We are continuing to have discussions with them because we want to see the land developed and the project completed,” she said.

“We are also of course keen to see the remainder of the money flow to us. The way the contract with the developer was framed is we’d get a percentage of the land sales when the properties settle.

“Because there are two apartment buildings and one commercial building that have not been commenced as yet, that money is delayed in flowing through to us, that is impacting on us.

Ms Wriedt said Tasmania wasn’t the only state affected by construction constraints.

“These same developers are also doing a range of projects interstate, it is the same in other places,” she said.