39 Smith Street Revocation

31st August 2020

39 Smith Street, Walkerville

Revocation of Community Land Classification

Council undertook community consultation from 1 September 2020 to 16 October 2020 regarding the proposed revocation of the Community Land Classification from 39 Smith Street, Walkerville.

In recent months, two  separate issues in relation to 39 Smith Street, Walkerville, have been the focus of both media and community attention. The below summarises the history of the two matters, provides factual information regarding the issues and presents a timeline showing the next steps for progression.


Issue 1

Community Land Classification – 39 Smith Street

1. What is Community Land and what does Community Land Classification mean?

In accordance with the Local Government Act 1999, all land owned by or under the care and/or control of Council is classified as either "Community" or "Operational" land.

Community Land is land reserved specifically for community access, use and enjoyment. Examples of Community Land include (but are not restricted to) public parks, ovals, reserves, cemeteries, sports fields, public thoroughfares, community buildings, walking trails, etc.

When and where feasible, Community Land can be leased/licensed to a party for either their exclusive or non-exclusive use. Certain lease terms and permitted use restrictions apply when a lease/licence is issued for Community Land. Any lease/licence entered into by Council is a commercial agreement and is done so at Council’s (the landowner) discretion.

Unlike Community Land, Operational Land is land that has had its Community Land Classification revoked, and it is not governed by any special management restrictions. General examples of Operational Land include Council Works Depot, Civic and Community Centres. The aforementioned leasing/licencing restrictions associated with Community Land do not apply to Operational Land; which allows Council greater flexibility for land use and potential redevelopment.

2. Why is Council proposing to revoke the Community Land Classification from 39 Smith Street?

Since 2013, both past and present Councils have made clear their intention to improve and redevelop all Council-owned land (including the aging buildings) between Smith and Fuller streets for the benefit of the community. In order to continue with this desire, Council needs to revoke the current Community Land Classification from the site to allow greater flexibility for redevelopment and leasing purposes.

Both current and past Councils have made clear their intention not to sell the land or allow a high-rise development on the site; the latter of which is inconsistent with envisaged uses within a Community Zone.

The aim of the revocation is to enable a redevelopment of the area to improve the land and/or facilities for the community’s benefit, thus increasing community access, use and engagement.

3. Why doesn’t Council repair the building located at 39 Smith Street, and what would the impact be to the ratepayer?

In 2019/20 Council obtained a valuation report and condition assessment report of the existing building located at 39 Smith Street. Both indicated that the building:

  • is currently valued at approximately $880,000;
  • is depreciating at a rate of approximately $80,000 per year;
  • has a useable life span as a facility of less than ten (10) years; and
  • requires approximately $500,000 worth of structural, cosmetic and DDA compliance works in order to bring it up to code.

Of great concern to Council is the age and deterioration of the building, its limited life span and the increasing liability presented to Council should the building be re-leased without undertaking further significant and costly repairs.

On the basis that Council does not have the funds available in its Long Term Financial Plan to repair the building, Council will need to either increase rates by approximately 5% to cover the cost of building works or redirect $500,000 from the long term asset management plan to cover the cost of building works. Considering that the building has a limited life span, Council is not willing to consider passing on such an increase to ratepayers nor redirecting funds from the long term asset management program.

2020 Revocation of Community Land Classification Application

1. What happened?

In 2016, the previous Council undertook a process to exclude two portions of land (comprised by the car park and adjacent grassed area at 39 Smith Street) from the associated Community Land Management Plan. In January 2020, Council resolved to revoke the Community Land Classification from the remaining portion of the Smith Street land (which represents the building footprint) in order to progress the master planning of the site.

Though the 2020 revocation process was conducted accordingly, despite extensive consideration and consultation, which included obtaining legal and property development advice, it was discovered that some of the statutory requirements of the 2016 process were not completed at the time.

2. What is happening now and what are the next steps?

The current revocation application was submitted to the Minister on the understanding that the 2016 process was completed in accordance with the legislative requirements. In June 2020, Council made the decision to withdraw its current revocation application and undertake a subsequent consultation and application process in order to rectify the identified discrepancies identified from the 2016 process.

It should be noted that contrary to public perception, the 2020 application was neither rejected nor approved by the Minister. Instead, Council withdrew the application.

On 16 October 2020, Council concluded its community consultation regarding the proposed revocation of the Community Land Classification from the whole of the land contained within Certificates of Title 5728/637 (Smith 1) and 5838/95 (Smith 2) and the portion of land contained within Certificate of Title 5796/887 (Depot) on which the building straddles.

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Issue 2

Inner North East Adelaide (INEA) YMCA lease – 39 Smith Street

1. What is happening with the lease over the building on 39 Smith Street?

INEA YMCA currently has a lease over the building until 31 December 2020.

Council have previously resolved not to renew the current lease over the site.

Since 2013, both past and present Councils have made clear their intention to improve and redevelop all Council owned land (including the aging buildings) between Smith and Fuller streets for the benefit of the community, and INEA YMCA have been aware of Council’s intention throughout this time.

On 20 June 2011, the Town of Walkerville’s Chief Executive Officer advised INEA YMCA’s President that Council intended to commence a strategic master planning of the site and that this would be a determining factor to the term of any proposed new occupancy agreement.

On 14 October 2011, Administration advised INEA YMCA that Council resolved to offer a three-year tenancy term that would align with the strategic master planning.

On 18 November 2013, Council subsequently resolved to offer INEA YMCA a Lease Agreement for a term of five years commencing 1 January 2014. INEA YMCA sought independent legal advice regarding the proposed Lease Agreement, which was then agreed to and executed in full on 26 May 2014.

The Lease Agreement (dated 26 May 2014) explicitly stated:

“due to various factors, the Lessor cannot guarantee an extension of the term of the lease”;

at the expiry of this Lease, the Lessor cannot guarantee alternate premises for the Lessee to continue its operations”.

When the Lease Agreement for the site neared the end, Council resolved to offer INEA YMCA a short-term extension of the lease for a term of two years, while the master planning of the site was continued and was finalised.

INEA YMCA were fully aware that the short-term lease extension was based on the same conditions as the preceding Lease Agreement, as this was expressly stated in the Deed of Extension of Lease (dated 17 July 2018):

“the Lessor and the Lessee mutually agree that the Lease is extended for the renewal term upon the same terms and conditions as are expressed or implied in the Lease”.

On 24 October 2019, the Town of Walkerville’s Chief Executive Officer wrote to the President of INEA YMCA reaffirming Council’s previous decision not to provide an extension of lease beyond the current expiry.

On 16 March 2020, Council officially resolved not to renew or extend the existing lease over the site. A Notice of Termination was served to INEA YMCA via email on 19 March 2020.

2. Why has Council decided not to renew the lease over the site?

Of great concern to Council is the age and deterioration of the primary building located at 39 Smith Street, its limited life span, and potential issues associated with increasing liability.

On this basis, as well as the significant unbudgeted funds required to address the capital and structural issues of the building, Council does not believe it is appropriate to renew the lease. Council seeks to improve the land in its entirety for the greater community benefit.

Under the relevant Planning and Development Legislation, the entirety of the Council-owned land contained between Smith and Fuller streets is designated as a Community Zone. This zoning category requires that the permitted use of the land be restricted to uses accommodating community, educational and recreational facilities. This zoning is not changing.

The following forms of development are envisaged for such a zone:

  • car parking associated with a community facility;
  • recreation facility or educational establishment;
  • child care centre;
  • clubroom associated with a recreation facility;
  • community centre;
  • consulting room in association with an educational establishment or recreational facility;
  • educational establishment;
  • hall;
  • health facility;
  • library;
  • lighting for night use of facilities;
  • minor public service depot;
  • office associated with a community facility, recreation facility or educational establishment;
  • place of worship;
  • playground;
  • pre-school;
  • primary school;
  • public administration office;
  • recreation centre;
  • shops ancillary to a community facility, recreation facility or educational establishment;
  • secondary school;
  • swimming pool;
  • theatre.

3. Does this mean that the Township will lose services?

The Town of Walkerville is a member of the Eastern Region Alliance; a group of six metropolitan Councils all within close proximity of one another.

Services akin to those currently offered at the site are offered in nearby locations within the Eastern Region Alliance, including:

  • The Walkerville PreKindy;
  • The Town of Walkerville’s ‘Active Aging’ program;
  • Walkerville Sports Club;
  • ICA SportzWorx Stepney;
  • MARS Sporting Complex;
  • Broadview Sports Precinct; and
  • INEA YMCA Kensington Community Leisure Centre.

Resources

Pursuant to section 194 of the Local Government Act 1999, Council has compiled a Public Summary Report, which contains a description of the land, the reasons for the proposal, any Dedication, Reservation or Trust to which the land is subject, the intention of Council once the revocation has occurred and its effect on the community. This report can be downloaded below:

PUBLIC SUMMARY REPORT

A public letter sent to all ratepayers in regards to the revocation from Walkerville Mayor Elizabeth Fricker can be found here:

LETTER FROM THE MAYOR

Council decisions

For a full and detailed history please refer to the relevant reports and decision associated with the following:

18 January 2016
Lease & Licence for Community Land & Building Policy Report
Council Resolution CNC277/15-16
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0018/680022/MCNC01-180116-Confidential.pdf

27 September 2016
Community Land Management Plans and Leases and Licences Review Report
Council Resolution CNC131/16-17
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0018/680103/MCNC09-270916-Confidential.pdf

19 December 2016
Community Land Management Plans Report
Council Resolution CNC237/16-17
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0017/680111/MCNC12-191216-Confidential.pdf

16 September 2019
Community Land Register Report
Council Resolution CNC72/19-20
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0025/317518/MCNC09-Minutes-19-September-2019.pdf

18 November 2019
Community Land Register Report
Council Resolution CNC157/19-20
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0026/337544/MCNC11-Minutes-18-November-2019-PUBLIC-docx.pdf

20 January 2020
Community Land Register Report
Council Resolution CNC236/19-20
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0027/428922/MCNC01-200120-Minutes-20-January-2020-Public-.pdf

16 March 2020
Strategic Property Review – 39 Smith Street Asset
Council Resolution CNC306/19-20
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0029/547166/MCNC03-160320-Minutes-16-March-2020.pdf

18 May 2020
Smith Street & Fuller Street Expressions of Interest Evaluation Panel Report
Council Resolution CNC421/19-20
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0036/670869/MCNC05-180520-Minutes-18-May-2020-Public.pdf

15 June 2020
Revocation of Community Land Classification Report
Council Resolution CNC382/19-20
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0023/693023/MCNC06-150620-Minutes-15-June-2020-PUBLIC.pdf

20 July 2020
Strategic Property Expression of Interest Evaluation Panel Terms of Reference and Evaluation Matrix Report
Council Resolution CNC7/20-21
https://www.walkerville.sa.gov.au/__data/assets/pdf_file/0028/715582/MCNC07-200720-Minutes-20-July-2020-Public.pdf