City of Fremantle council has shut down a possible shake up in the ownership of Fremantle Markets after another investor flagged interest for the 20-year lease.
City of Fremantle council has shut down a possible shake up in the ownership of Fremantle Markets after another investor flagged interest for the 20-year lease.
The city council voted to advertise a business plan, which would renew the lease with current operator Fremantle Markets Pty Ltd (FMPL), at its meeting last night.
However, the vote came after about two weeks of speculation from the community that the markets could change hands.
FMPL would be charged a base rent of $550,000 a year and a total valuation of $11 million, under the city’s business plan.
The city's policy stated a lease did not have to go to tender if the tenant was paying full commercial market rate and adds significant value to Fremantle's overall tenancy mix and appeal for visitors.
FMPL has estimated that up to $60 million a year is spent at the markets.
“For many years now, the City of Fremantle and all of us at Fremantle Markets know the historic markets building needs urgent works,” FMPL chief executive Natasha Atkinson said.
“FMPL offers to pay for these works but we need a long-term lease to offset the costs.”
Tim Foster, of GTL Investments, said he had sent the city an indicative offer for the markets lease claiming it would yield 116 per cent more than what the city has proposed with FMPL.
“GTL proposes a base rent of $650,000 from date of lease commencement … [is] $100,000 higher than the current business plan,” he said at the meeting.
“GTL is committed to invest $6.5 million in capital works and urgent repairs over 10 years.”
Australian Securities and Investments Commission documents show GTL Investments operate Backpackers Imperial Hotel in Tasmania.
The indicative value of the Fremantle Markets site was assessed at $10.3 million, according to the city’s business plan.
After the meeting, Ms Atkinson said many years ago, FMPL offered to pay for urgent, multi-million-dollar works in return for a long-term lease to offset the expense.
"So we are delighted the City of Fremantle voted [on Wednesday, May 24] to advertise a business plan for a 20-year lease with Fremantle Markets Pty Ltd to allow us to start planning for these urgent works and get on with creating the best-possible operating scenario for our 150-plus traders," she said.
"City of Fremantle’s tender policy makes it clear there is a tendering exception for buildings leased to long-term tenants paying full commercial rates of rent and adding significant value to Fremantle’s overall tenancy mix and visitor appeal.
"Fremantle Markets exceeds these metrics.
"We have no interest in moving our markets business. We simply want to operate our business from a structure that is safe and sound."
Fremantle Society president John Dowson was among the presenters who believed the lease should be put out to public tender.
Some market stallholders at the meeting claimed there had been mismanagement, with others supporting a lease renewal for FMPL.
John Murdoch opened the markets in 1975 and the family’s company FMPL has been the lessee of since 2008.
The city's business plan with details to renew the lease with FMPL will be advertised for 42 days.