A proposal to progress a Community Hub at Gosnells Golf Club has been rejected after councillors raised concerns about the potential financial risk to ratepayers.
City of Gosnells councillors voted 9-4 against entering into a Heads of Agreement with the club at their August 25 meeting.
The proposal did not approve a loan. It sought council support for the city to enter into a Heads of Agreement with the club to determine whether an acceptable funding model could be developed.
Under the proposal, the club would have been required to contribute between $3 million and $5 million and seek another $5 million to $7 million from State and Commonwealth governments and other organisations before any City funding arrangement could proceed.
Any city funding was proposed as a self-supporting loan, with the club required to repay the money and interest.
Repayments would have come from future profits generated by the Community Hub, while the City would have taken a caveat or other registered interest over the property as security.
During debate, Cr Dillon Mason moved an amendment that would have capped any City funding at $20 million and required the city and club to explore opportunities for the project to generate revenue for the city.
The amendment, seconded by Cr Glenn Dewhurst, was defeated 9-4. The original motion was then put to the vote and was also defeated 9-4.
Cr Serena Williamson, who voted against both, said she believed the proposed funding model presented too much risk to the city and ratepayers.
She said her understanding was that the proposal could involve the City obtaining a loan from Treasury Corporation and lending those funds to the club, with repayments relying on projected profits over a long period.
“The proposal indicated the club would repay the city loan and interest incurred using projected profits over a long period of time, potentially 21 years,” she said.
Cr Williamson said she was concerned about what could happen if profits were lower than projected.
“From my understanding, if profits were lower than expected in a given year, then the city would need to consider increasing rates to cover the gap and that’s not in our community’s best interest,” she said.
Cr Dewhurst, who moved the original motion, said he was disappointed it was rejected and believed some councillors misunderstood what was being proposed.
“This was not a motion to approve a loan or commit ratepayer money,” he said.
“It was about giving the Gosnells Golf Club an opportunity to seek external funding, which normally requires some indication that the local council supports the concept.”
Cr Dewhurst said no final loan amount or repayment period was being approved and any future financial arrangement would have needed to return to Council separately.
He said the club would first have had to secure its own contribution and millions of dollars from other sources before progressing further.
“They were not asking council to hand them money,” he said.
“They were asking council to give them a chance to find it elsewhere.”
City staff said the proposed motion would have required no additional work from the City and it would have been up to the golf club to establish a feasible development and funding model that did not impose a cost on the city.
However, the City’s Director Business Services also advised that if council considered any development model relying on City funding through a self-supporting loan too risky, it should make that position clear to the club.
Mayor Terresa Lynes and councillors Aaron Adams, Kylie Dalton, Saiful Islam, Diane Lloyd, Malik Sajjad, Leah Szczyglak, Serena Williamson and Emma Zhang voted against the proposal.
Councillors Peter Abetz, Glenn Dewhurst, Dillon Mason and Balli Singh voted in favour.
