Byron Council will have to pay nearly half a million dollars in holding and administration costs when it officially takes ownership of the old Byron District Hospital site in the coming weeks, according to a staff report.
There was great celebration last December when the state government agreed to sell the 5,300sqm Shirley Street site to council for just $1, paving the way for it to become a hub for local community services.
But as council prepares to officially sign the contract of sale, it has emerged that the purchase will be somewhat more costly than some first thought.
In the staff report tabled for the upcoming Thursday meeting, council’s legal counsel Ralph James says that ‘holding costs of the site for the 2019/2020 financial year are estimated at $400,000 in addition to an estimate of $50,000 to fund the administrative establishment of the site and legal documents’.
A Council spokesperson said the majority of the cost was for security as ‘it’s an unoccupied building in the centre of town’.
They also said the costs were based on initial estimates that would be refined if the project progressed.
Council is hoping to recoup these costs once the community hub is up and running, most likely by having at least one commercial tenant on the site paying rent at or near market rates.
Mr James notes that, in the interim, council could source the funds from its Holiday Park Reserve via an internal loan.
He also notes that there is currently a significant amount of contamination on the site, including asbestos sheets in the original building, lead based paint and radiated sand in the courtyard.
The costs of remediating the site, estimated to be $200,000, are expected to be funded by the NSW Health Administration Corporation as part of the sale.
Should council go ahead with the purchase within the next few weeks as expected, it will likely then move to reclassify the land from ‘community’ to ‘operational’ as this will allow a greater range of uses and opportunities to generate income.
A preliminary proposal for the site has already been developed by a group of locals led by local realtor Chris Hanley.
This proposal involves the creation of a community hub in which affordable rental accommodation is provided to organisations representing the welfare, health, education and cultural sectors.
It includes a business plan under which rents would be structured in three tiers, with Tier 1 being for commercial organisations and Tier 3 being a zero-cost space for community projects.