Noosa Councillor Joe Jurisevic’s aim to determine the pros and cons of council’s role in the future ownership of the Sunrise neighbourhood shopping centre was squashed last Thursday by concerns any uncertainty of ownership may deter potential tenant IGA from moving to the centre.
Many in the community have argued this is a space council shouldn’t be in, Cr Jurisevic said.
He said Council got into the space because no one wanted to build a shopping centre but questioned whether their role as landlord should continue or whether they would be better placed to sell the property and make use of the money elsewhere.
Officers told Council’s Ordinary Meeting the shopping centre had lost up to $500,000 in rent over the past three years while it was without a major tenant.
Councillors agreed at the meeting to enter into a commercial lease of Shop 8 with Tro Management Australia Pty Ltd for a 10 year term with an initial 12 month rent-free period.
They also agreed to a capital investment of up to $700,000 in budget review 2 or 3 to fund expansion works required once the lease was finalised as well as investigating options for future centre site enhancements to improve its commercial return.
Officers said council could expect a 10 per cent return on the centre after the tenant was secured and 12 month free rent period completed which would be about $300,000 a year.
They said it would take about six years to achieve payback on its $700,000 capital investment and it made good financial sense to retain the asset during this time.
Cr Frank Wilkie said it would be unwise to consider divesting the centre while council was still negotiating the lease with potential tenant IGA.
I think it sends mixed messages. It’s an instability it may create in the minds of the leasee, he said.
Mayor Clare Stewart said it was council’s responsibility to be prudent with ratepayers money and fiscally responsible. “We have to look long term at how we can be financially responsible,” she said.
CEO Brett de Chastel said other councils around the council owned a variety of commercial enterprises including shopping centre, pubs and airports.
