$80m hotel plan shelved
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Tuesday, 25 July, 2000 - 22:00
DEVELOPER Monteath Properties’ $80 million Ramada riverfront Hotel development at Fremantle has been scrapped.
The company, owned by former Richmond captain Bruce Monteath, cited unfair tax rulings by the Australian Taxation Office as the reasons for the collapse of the
proposal.
The tax treatment of strata-titled, managed investment schemes, governed by the Managed Investment Act, made the scheme unattractive to investors, according to Monteath Properties general manager Shane Stewart.
He said the ATO was denying any input tax credits to purchasers of all strata-titled premises because it considered strata-titled apartments residential premises.
Attempts to clarify the issue with the ATO were unsuccessful.
“This has enormous implications for the whole hospitality industry across Australia,” Mr Stewart said.
Residential apartments are likely to replace the hotel development at Northbank, although a boutique hotel sold as a single identity is an option for Monteath.
“I would tend to favour residential at this stage with some commercial and retail presence such as a corner store and Old Papa’s café,” Mr Stewart said.
He said Monteath and Ramada International were very disappointed with the ATO’s ruling.
He said there was nothing legally binding which could lead to litigation by either party because the agreement was always conditional on the development proceeding.
The collapse of the proposal was beyond the control of the company and was caused by the ATO’s ruling, he said.
The hotel has been two to three years in the planning and only needed $5 million more in sales to make construction possible.
Mr Stewart said Monteath planned to keep faith with investors who had bought other properties at the Northbank site by keeping the retail component of the development.
He said residential land would be easier to promote because it was viewed more favourably by investors.
The company, owned by former Richmond captain Bruce Monteath, cited unfair tax rulings by the Australian Taxation Office as the reasons for the collapse of the
proposal.
The tax treatment of strata-titled, managed investment schemes, governed by the Managed Investment Act, made the scheme unattractive to investors, according to Monteath Properties general manager Shane Stewart.
He said the ATO was denying any input tax credits to purchasers of all strata-titled premises because it considered strata-titled apartments residential premises.
Attempts to clarify the issue with the ATO were unsuccessful.
“This has enormous implications for the whole hospitality industry across Australia,” Mr Stewart said.
Residential apartments are likely to replace the hotel development at Northbank, although a boutique hotel sold as a single identity is an option for Monteath.
“I would tend to favour residential at this stage with some commercial and retail presence such as a corner store and Old Papa’s café,” Mr Stewart said.
He said Monteath and Ramada International were very disappointed with the ATO’s ruling.
He said there was nothing legally binding which could lead to litigation by either party because the agreement was always conditional on the development proceeding.
The collapse of the proposal was beyond the control of the company and was caused by the ATO’s ruling, he said.
The hotel has been two to three years in the planning and only needed $5 million more in sales to make construction possible.
Mr Stewart said Monteath planned to keep faith with investors who had bought other properties at the Northbank site by keeping the retail component of the development.
He said residential land would be easier to promote because it was viewed more favourably by investors.