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CVC properties fail the interest test

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Clarence Valley Council’s sale of four properties, as part of its depot and property rationalisation, failed to attract any significant interest at onsite auctions held on Saturday August 6.
Bidding for properties at Brickworks Lane and Mulgi Drive failed to reach the reserve price, or the delegated range that would allow the council’s general manager, Scott Greensill, to negotiate with prospective buyers.
Auctions for properties at Pound Street and Spring Street were cancelled, as only one person had registered an interest with First National Ford & Doherty, the agent engaged to conduct the auctions; however, unsuccessful, below reserve and outside the delegated range offers were made on the properties.
At last week’s council meeting, councillors decided in a confidential session that the properties would now be listed for sale with Ford & Doherty at the following prices: 110 Spring Street $300,000, Brickworks Lane $300,000, Mulgi Drive $90,000 and 70 Pound Street $400,000.
A First National Ford & Dougherty report on the outcome of the auctions, including the successful auction of the council’s Victoria Street and Bruce Street properties on August 2 in Sydney, was kept confidential on the basis that it would, “if disclosed, confer a commercial advantage on a person with whom Council is conducting (or proposes to conduct) business”.
“All costs associated with the sale of these properties will be funded from the sale proceeds, with the agent’s commission for each sale being 2.85% of the sale price,” the report to council states.
“The total marketing costs for First National’s promotion of the property sales was $25,291 (ex GST).
“An associated cost for the sale of 28 Bruce Street Grafton was a Site Contamination Report which was completed by Cavvanba Consulting at a cost of $24,905 (ex GST) and was disclosed to all potential buyers.”
Meanwhile, while the properties at Victoria Street and Bruce Street returned $2.68million ($1.84m for Victoria Street and $840,000 for Bruce Street) at auction in Sydney on August 2, a result Mr Greensill has said was “a good outcome for ratepayers” in a media release – he has previously declined to explain why.
Those properties include a leaseback agreement with the purchasers that mean the council will outlay $210,000 per annum for Victoria Street for five years and $82,500 per annum for Bruce Street for three years, plus a three per cent annual rental increase at each property.
The council will also have to pay the new owners’ annual rates and charges, which are $9,320.58 for Victoria Street and $19,123.78 for Bruce Street, plus increases over the terms.
The Independent understands that it’s not as straightforward as asserting that the council will pay at least $1.45million over the terms of the leases, however, how the sales are “a good outcome for ratepayers” remains a mystery.
The council had not responded to the Independent’s enquiry before the paper’s print deadline.

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