Considerations for the Development of an Arts, Cultural and Tourism Facility at McKay Park

The attached considerations follow Chambers decision to support Council’s preferred option for the purpose of a grant funding application only, and in acknowledgement of Minister Andrew Constance’s grant offer.

Currently, concept plans and funding have not been finalised with studies, advice and community input continuing.  The Chamber anticipates a stage of inclusion of local and external professional advice in determination of the final outcome and operation, most likely after Council’s funding applications have been assessed.

The Chamber’s position on the McKay Park Arts, Cultural and Tourism Component of McKay Park is for a sustainable Arts/Cultural and Tourism facility, which offers capacity and diversity not currently available in the Shire.

The Chamber does not want to see the rate payer and Council saddled with unnecessary debt or incur unsustainable loss through operational cost.

Purpose 

Infrastructure to provide:

  • A Gateway Precinct, which redefines Batemans Bay and contributes to Town Centre rejuvenation.
  • Arts and Cultural infrastructure to provide capacity and diversity for visitors and community not currently available in the Shire.
  • Infrastructure for Performing and Static Arts, Artisan Workshops on display, Exhibitions, Conferencing, Shows and Group Travel which is not currently available within the Shire.
  • Provide infrastructure recognised for improving the visitor economy and overnight visitor spend.
  • Improve the Visitor Information Services experience.
  • Employment. Youth engagement, retention and training.
  • Avoid duplication and competition with existing businesses, especially Clubs, Performing Arts Facilities, Conferencing and Accommodation providers.


Base Considerations:

  1. A multi-use venue with reconfigurable, shared and co-worked spaces, as opposed to a venue with different spaces for different use will increase operational viability.
  2. Auditorium with reconfigurable space for performing arts, exhibitions, conferences, events and shows is required to reduce build costs and operational costs.
  3. Auditorium space requires minimum reconfiguration cost. Tiered telescopic seating should be kept to a minimum with fixed tiered gallery/dress circle seating maximized.
  4. Exhibition booths and sites of either 2.4mx2.4m or 3mx3m require a total area of approx. 900 sqm within the Auditorium space to be viable and have a comparative advantage with local venues.
  5. Touring Events will be significant users due to cost. Capacity rather than quality determines affordability for most touring events. Touring event types are highly stratified to capacity.
  6. It is advisable for people interested in determining auditorium capacity to view touring events and their targeted venue capacity.  It will become apparent that there is a significant change in event type and quality between 650 to 800 seating capacity.
  7. The venue should produce outcomes not currently available within the Shire. Design will facilitate a unique visitor and artisan interactive experience. Circulation space for the visitor will allow experiencing artisan work spaces and galleries in unison. Examples of integrating gallery and artisan workspaces are MONA in Tasmania, Glassworks in Canberra and Seppelts Winery in the Barossa Valley
  8. Display Workshop areas will maximise shared space.
  9. The venue should build capacity and diversity with significant difference to existing venues.  The venue should not become a competing venue for commercial or non-paying use.
  10. Areas should be leased or under a management contract to ensure viability, aspiration and entrepreneurial activity. The only financially offset spaces are to be the gallery area and common areas.
  11. Currently, various clubs and organisations provide free community access. For example, the Bay Soldiers Club provides almost 900 free community events per annum. The proposed facility should operate on a tiered user pay system and should not be structured as a replacement for current community service facilities.
  12. Successful Visitor Information Centres are co-housed to offset cost and maximise interest.
  13. Bench marking design and use against primarily aged local government run loss making venues, while useful for compliance and funding, could lead to a loss making venue with constrained use.


Private Public Partnership Comments:

The PPP (Private Public Partnership) will require a capital and/or transfer of property input by Council as well as ongoing subsidisation of the current preferred option.

Of the four types of PPP only the Design Construct and Maintain and DCM and Operate options allow for the transfer of whole of life cost and risk to a private partner. Both these options are generally considered for investments over $50M, and where operating profit can pay for design and construction.

The Chamber believes the ex-Bowling Club building should be retained until a suitable outcome is achieved. The value in the current building and suitability cannot be underestimated.

Arts, Cultural, VIC and Swim Centres when benchmarked to LGA operated facilities, generally cannot satisfy these PPP models without significant operational subsidy. Other types of inclusions for a PPP to become viable and offset costs is accommodation.

Councils proposal for a hotel conference centre on the norther ex bowling club site has many issues. Most notably the likelihood of a hotel receiving competitive advantage which leads to a similar situation as Beach Resort, where an over capitalised highly rated facility can sell at below market rates, further decreasing over night visitor spend and available rooms. This will also lead to further disappearance of hotels where older properties change use due to their inability to secure funding to upgrade.

A significant probity issue for a PPP will be to ensure a level playing field with industry.

When considering comparable land areas and values for Hotel/Conference development which have not been developed despite approved Masterplans and DAs, it seems that this site is not best use for a hotel, and therefore does not offer maximum value to Council.

A fully functional convention centre would be good for the visitor economy, though how it could be achieved is difficult when considering low site value, limited site aesthetics, no current industry demand and probity issues with regard to competition. It does need to be considered within context of the current industry situation.

The notion that a PPP hotel conference facility providing exhibition, event space and open performance space in leiu of this space not being provided in the current preferred option goes against industry practice.

If the next Expression Of Interest does not flush out viable possibilities for a Request for Proposal, then utilization of the ex Bowling Club site should be considered.

Considerations Specific to the Ex Bowling Club Site

Council rejected the attached Perfex proposed plan which Chamber supports, in preference to Councils preferred plan. The attached plans have not been considered in detail as part of the Mackay Park process, they have been distributed with an overview.   The plans do elucidate the concepts proposed for a successful outcome for the Arts, Cultural Component submission.

Current ex Bowling Club building value is approximately $1,500.00 per square metre for 3,200sqm site (excl. GST).  $4,800,000.

Current ex Bowling Club building replacement value approximately  $5,500 (excl. GST) per square metre.  $17,600,000.

Land value of ex Bowling Club site if rezoned to commercial use:
Based on values of adjacent properties which have a service road and are smaller, and with consideration to large holdings indicates that larger land holdings sell for a lower sqm rate. The estimate of $400 per sqm is more than current commercial properties for sale opposite the site.  Based on $400 per sqm for a rezoned site, the value is approximately $5,800,000. Local real estate agents believe the rezoned site value is closer to $3,500,000.

Recycling of the Ex Bowling Club site is justified through a construction saving of approx.17M, with an alternate potential rezoned sale price of the site yielding up to approx. 5.8M.

The Chamber believes the sale of the Ex Bowling Club site to offset new build costs on the southern site (pool site) does not represent value.

Recycling the Ex Bowling Club site mitigates political risk and rate payer burden for the short and long term.

Refurbishment of the existing building ensures low entry cost. Building an attached multi-use auditorium ensures capacity, diversity and long-term viability for outcomes currently not available in the Shire (including uses not currently planned under current options. Remaining outdoor space to be utilized with a view to future additions represents further savings and future possibilities.

Conclusion:

Retain Ex-Bowling Club site building pending Council’s funding application outcome, Expression of Interest for PPP and further research for appropriate use of the Northern Site.
Extend Tourism Infrastructure on the Northern Site with a view to infrastructure for youth, bus terminal, long vehicle parking and possibilities addressing urgent economic and social fundamentals.
Chamber supports Council achieving significant remuneration for the Northern site if this could be achieved through appropriate use.
Should Councils current preferred option proceed then the footprint for the Arts and Performing Arts space needs to expand and become multi-purpose.

Councils current preferred option and intention for the northern ex bowling club siter does not include use for exhibitions, shows, fairs, functional open space and sufficient gallery space currently demanded.  This space which is not currently planned for represents significant economic benefit to the centre and Shire. These uses give a higher yield than currently planned space and should be planned for.

The design also relies on seating capacity not differentiated from current availability. The telescopic seating area will most likely render the space unsuitable for alternate use, as has been the case in similar venues.
The design should include a multi-use auditorium with minimum 800sqm of floor space for exhibitions, conferences, events, shows, dance and performance space. Seating to be in the order of 700 seats which includes a maximum of approx. 300 telescopic tiered seats.  This maximum number of telescopic ensures that auditorium operational cost is not encumbered by the cost of moving seats, as is the case at Shoalhaven Exhibition Centre.

The notion that a hotelier will enter a PPP with Council to build a Hotel and Conference facility which also enables use not currently included in Councils preferred option plan is counter to industry practice. The idea that events, exhibitions, shows, and multi-use open areas compete with conferences doesn’t occur. Conferences basically fill beds with most operators discounting conference facilities and associated costs to fill beds.  This situation would be further exacerbated in a regional area.

The Chamber finds that reliance on a consultancy which we believe lacks experience in commercially viable performance venues as opposed to experienced local operators in the accommodation, venue and event industry is an issue to evidenced based decision making. Community based committees could possibly lead to mediocre or uninformed outcomes when inability to challenge presented concepts exists, and argument is primarily at a base understanding level.

 

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