Dear Members.
I want to share some great news!
It has been some months since I have been able to communicate with you on the subject of our Club’s Air Space Development. That is because there have been sensitive, confidential negotiations in progress.
However, a much-improved deal has now been agreed to with our development partners ICD Property and Sinclair Brook and I am excited to be able to outline what this means.
The past eight months
Immediately following the disappointing Land and Environment Court decision last year, we formed a new Property and Air Space Development Committee which included our new CEO Marcelo Veloz. Areas of focus included:
- Understanding the complexities of the judgement;
- Reviewing every aspect of the proposed scheme and how it was regarded by the Council, the Court and our neighbours;
- Reviewing the prior commercial deal with the assistance of KPMG Property and Colliers International;
- Considering enhancements and improvements to the deal having regard to the substantially increased value of our Club’s property; and
- Getting the very best deal for our members.
In addition to the negotiations with ICD Property, we investigated broader alternative development opportunities. To this extent, three other large and reputable Australian companies submitted expressions of interest in respect of the Air Space Development. These submissions were carefully assessed over a four-month period, concentrating on development and commercial viability and the best outcome for our Club.
At the end of this process, we concluded that the renegotiated improved deal with ICD Property (pursuant to the approval members gave in 2015) was the most favourable to our Club and last week the Club agreed to an amended and much improved version of the development agreement with ICD Property.
A much better deal for our Club
The deal with ICD Property has been substantially improved, reflecting the increasing value of our Club’s property.
One major benefit of the new commercial deal is that the Club will immediately receive an interest-free loan from ICD Property of $20 million which will repay the $19 million debt the Club has with ANZ Bank. This will save $150,000 a month in interest and principal repayments from this month. The new loan will be repaid when ICD gives the Club $20 million payment as part of its cash contributions, later in the project.
Greater confidence of Development consent
Both our Club and our development partners have much greater confidence that a planning approval will be obtained in respect of the new application soon to be lodged. The reasons for this confidence include:
- All relevant lessons have been learned from the prior unsuccessful application;
- Engagement of a local architectural firm with strong local knowledge of the city and heritage constraints. ICD Property invited three leading Sydney-based architectural firms to tender. After a rigorous process, fjmt was selected as the new project architects based on its strong working relationship with the Council, solid heritage experience and a sound submission strategy. You can learn more about fjmt here;
- Strategically, a whole new approach has been adopted in relation to the new development application which focuses more on collaboration with the Council and neighbours. In this regard, ICD Property has already had a number of collaborative meetings and workshops with Council Officers. Feedback from these meetings has been positive to date; and
- Prior to the Stage 1 Development Application (DA) being submitted, we and ICD Property will discuss and negotiate a responsible and balanced design of the project with key stakeholders including neighbours.
Timing
We anticipate that a new Stage 1 DA submission will be presented to the City of Sydney Council by April-May 2018. It is expected that a Stage 1 DA will be achieved in early 2019, following which the design competition and Stage 2 DA process will commence.
Further Information
As the design progresses over the coming months, you will be able to view the changes made to the initial scheme and other relevant information in the display area on the ground floor of our Club and on the Club’s website.
For those members wishing to learn more about the progress of our development we will be hosting an information session on the 22 February 2018 at 6:30pm in the Omega Room. To register your attendance, please contact the Club’s reception on T: 9267 9421 by 16 February.
In the meantime if you have any questions please write to us at airspacedevelopment@citytatts.com.au.
Finally, thank you for your patience and ongoing support. You voted overwhelmingly in support of the Air Space Development in December 2015 and we are working hard to make sure it happens. You have every reason to be thrilled with the much improved deal that has now been agreed to with our development partners and every reason to share the confidence that the next development application will be successful.
Warm regards.
Patrick Campion
Chairman
City Tattersalls Club
