New Norfolk Distillery withdraws $450,000 offer for Willow Court buildings
The future of the New Norfolk Distillery in its home town is in doubt after Derwent Valley councillors couldn’t make up their minds. LATEST>>
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The New Norfolk Distillery has withdrawn its offer to buy buildings at Willow Court to facilitate a major expansion, after the council was not able to make a decision on whether it would commit to the sale.
The distillery sought to buy the Allonah and Occupational Buildings at Willow Court for the price of $450,000.
Last Thursday the council was given the option to commit to the sale, to not approve the sale or advise it could not yet commit but would later reconsider.
At the meeting, councillors were unable to make a decision on what it would do and since then, the distillery has withdrawn its offer.
The council was advised no sale should be considered until the site was subdivided.
“They can come back to us now, we’ve put the ball in their court,” New Norfolk Distillery director Tarrent Derksen said.
Mr Derksen hoped the council would come to the table, but said the distillery was already considering other options and other regions for its expansion.
“We love the Derwent Valley, we love what we’ve done there, and we’ve built a business out of nothing,” Mr Derksen said.
“We’re showing what can be done in our region, it’s a beautiful area to be in and we want to grow there but the council has to come to the party.
“We expect the Derwent Valley Council to confirm they want investment and to fix this derelict site.”
Derewnt Valley mayor Michelle Dracoulis said the distillery’s offering in the valley was “exceptional” and many wanted to see it grow.
“We as a council would be very happy to see the growth and success of that business,” Ms Dracoulis said.
“The way in which they’ve conducted the fresh hops festival has become a staple in our environment.
“We are proceeding with works as we have been the entire time toward subdivision and services to the site, so the site may be activated in the future.
The distillery will also enter dispute resolution talks with the council over nearly $80,000 in unpaid rent, which the council claims it is owed.
Mr Derksen says one of the clauses in place means the business was not required to pay rent because the council had not connected the building to services.
He said he was happy with the outcome on Thursday.
“Now with dispute resolution we’re finally getting to speak to them which is all we wanted to do,” Mr Derksen said.
“They have to come to the table now and they have to actually speak to us.”
Derwent Valley Council acting general manager Ron Sanderson declined to comment on the withdrawal of the offer.
Derwent Valley Council will enter dispute resolution with New Norfolk Distillery over alleged $80k debt
May 29 10:30am
The Derwent Valley Council has agreed to enter dispute resolution talks with operators of the New Norfolk Distillery, but whether it will sell the rum producer buildings at Willow Court remains undecided.
The council claimed it was owed $78,483.50 in unpaid rent for the business’ New Norfolk headquarters, but the distillery’s director told the Mercury there were clauses in its contract making it exempt from paying.
Tarrant Derksen said one of the clauses meant the business was not required to pay rent unless buildings could be used for its permitted use.
On Thursday, the council was given five options: do nothing, discharge unpaid rent, terminate the lease, recoup rent from the guarantor, or make a payment plan.
Cr Peter Binny moved the council enter resolution dispute talks with the distillery owners.
“There is no doubt a dispute exists as to the payment of rent,” Mr Binny said.
“We need to sit down with the distillery and discuss the dispute with council, because they’re not paying the rent.
“The parties must attempt to resolve any dispute between them with direct negotiation, if parties fail to resolve, either party may refer the dispute to the arbitration.”
Mr Binny’s motion passed.
In a secondary matter, the distillery sought to buy the Allonah and Occupational Buildings at Willow Court for the price of $450,000, as part of a major expansion.
Councillors were given three options: Approve the in-principle sale for $450,000, not approve the sale, or advise it could not commit at this stage, but is able to consider the sale when a related subdivision is complete.
Mr Binny moved the council approve the sale in-principle, but his motion was defeated.
“If the Derwent Valley Council do not take up the purchase offer submitted by the distillery, then what is the future of these buildings?” he said.
“Can we really expect someone to come along and make an offer?
Cr Phillip Bingley moved an amended motion, that the sale be approved, on the proviso the distillery pay the rent it is claimed to owe.
This was also defeated.
All recommendations were moved and lost, which means the item will be deferred to next month’s meeting.
New Norfolk Distillery says it’s exempt from paying $80k in rent to Council
May 25, 6am
A near $80,000 rental dispute between the Derwent Valley Council and the New Norfolk Distillery could result in the rum producer’s lease being terminated, right when the business is on the verge of a major expansion.
The council claims it is owed $78,483.50 in unpaid rent for the business’ New Norfolk headquarters, but the distillery’s director Tarrant Derksen says there are clauses in its contract making it exempt from paying.
“I think the constant personnel changes at the Derwent Valley Council mean the [council] and others don’t fully grasp or understand our lease,” Mr Derksen said.
“If they did, outstanding rent would never have been brought up because we aren’t required to pay rent until we can use the buildings for their permitted use.”
There are clauses for exemptions, one relates to money spent structural improvements, if the work increases the value of the property.
The distillery has provided invoices showing $178,000 has been spent, but the council argues there has been no increase to the value.
“Another clause in the agreement states that only on written approval by the council of the proof of payment will the distillery be entitled to set-off rent for expenses incurred for capital works. No such approval by council has been made,” acting general manager Ron Sanderson said in the agenda.
Mr Derksen said the second clause meant the business was not required to pay rent unless buildings could be used for its permitted use.
“The permitted use for the buildings is for a distillery, function area, bar, liquor retailer and ancillary purposes, and until services are installed we cannot do this,” Mr Derksen said.
On Thursday the Derwent Valley councillors will vote on whether the council should do nothing, discharge unpaid rent, terminate the lease, recoup rent from the guarantor, or make a payment plan.
Mr Derksen said if the council chose to terminate the lease it would not affect the nine workers at the distillery, but it would slow down the $4m expansion.
“If this happened we would still look to expand our business and operations, but it may not be suitable to expand in the Derwent Valley if the council isn’t amenable to our plans,” Mr Tarrant said.
“I would invest in our expansion elsewhere and would advise others to do so.”
As part of the expansion, the distillery is seeking to buy the Allonah and Occupational Buildings at Willow Court for the price of $450,000.
Mr Tarrant said the dispute should not impact the bid to buy the buildings.
“What we are hoping for is the Derwent Valley Council to accept our offer to purchase the buildings for the market valuation price they provided us and that we continue to lease the buildings for our expansion project to go ahead and New Norfolk Distillery to grow further into the site,” Mr Derksen said.
The Derwent Valley Council was contacted for further comment.
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