A BITTER argument over lease terms that endangers a multi-million dollar upgrade to the Frankston Basketball Stadium has erupted publicly while building contractors on site wait to begin work.
A meeting behind closed doors last Wednesday (15 March) between council CEO Dennis Hovenden, mayor Cr Brian Cunial, council officers, councillors and Frankston & District Basketball Association representatives failed to reach agreement on new lease terms between council and the association.
The association is pitching in $1 million of its members’ money in to a $12.7 million first stage upgrade of the Seaford basketball hub and believes council is now engaged in “a cash grab” by also increasing rent payable at the council-owned land.
Council has proposed increasing rent from about $30,000 annually to about $60,000 plus a 6 per cent take of future association revenue above $1 million, adding an estimated $120,000 each year to lease payments (“Stadium upgrade in strife”, The Times 13/3/17).
After last week’s meeting, Cr Cunial launched an extraordinary attack on the not-for-profit association alleging the group has “a winner takes all” approach to lease negotiations.
“Council is mindful of the community’s best interests and cannot be held to ransom over these matters,” the mayor said in a statement.
The mayor’s statement noted: “The proposed lease arrangement allows for a much lower lease payment than at other like facilities — $326,000 for six courts in Keilor, $191,000 for six courts in Boroondara, which are also consistent with courts in Casey and Knox”.
Basketball association general manager Nathan Jolly says council now expects association members, many of whom are also ratepayers, to repay council $4 million of ratepayers’ money originally pledged by council to the project.
The federal government has promised $5.2 million and the state government $2.5 million towards the stadium upgrade.
In a letter handed out to families attending the stadium at the weekend, Mr Jolly said the association had been trying to agree to revised lease terms with council since mid-2015.
He said council is “comparing apples with pineapples” in its flawed comparison of rent charged by councils elsewhere to other basketball associations since the Frankston association originally paid for the original construction of facilities and is pitching in money to the upgrade which will see the addition of four new courts, bringing the total at the stadium to ten.
Mr Jolly said accusations that the association is holding council to ransom are “incorrect and offensive”.
He said the association is “trying to stop council double dipping from ratepayers via a blatant cash grab of members’ money”.
“The only party holding the other to ransom is council who have tried to bully the FDBA with veiled threats that the project will fall over if the association does not sign its unsuitable lease,” Mr Jolly said in the letter.
“Council have tried every trick in the book to box the FDBA board of management into signing unfavourable lease terms including emailing the FDBA board of management a draft letter addressed to the project’s builder outlining the project will be cancelled due to the FDBA not agreeing to a ‘commercial lease’ of building.
“The stress this type of behaviour has had on members of the FDBA board of management is unwarranted and unprofessional.”
A council statement from Cr Cunial in January announced Devco Project & Construction Management had been awarded a contract to upgrade the basketball stadium.
Mr Hovenden has confirmed council has ordered Devco to stop works on site since a lease agreement has not been agreed.
Devco did not return calls and emails last week asking questions about the contract for the project.
Cr Cunial said late on Friday that the building contract has not been signed. Work sheds and containers have been installed on site.
“Council appointed the preferred contractor and advised them that they have been selected to undertake the works, however a contract has not yet been signed,” Cr Cunial said in a statement.