A deal between the council and aged care provider Oryx Communities over 2,072 square metres of Mount Pleasant land has fallen through.
A deal between the council and aged care provider Oryx Communities over 2,072 square metres of Mount Pleasant land has fallen through.
City of Melville proposed the dispose the lots on 13 The Esplanade and 64 Kishorn Road, which was the former Canning Bridge Senior Citizens Club.
A proposed lease was drafted up with Oryx Communities Melville named as the lessee.
Terms included ground rent of $650,000 plus GST per year and the construction and operation of an aged care facility for a term of 49 years with two options to renew of 20 years.
A council document dated May 2020 said the city could potentially gain $14 million for the first 49-year lease term from proposed rent reviews.
“… if the further lease options are exercised by the lessee, the estimated value is $18 million for 89 years,” the document said.
“In addition, the lessee is expected to be levied annual rates or make an annual rates equivalent payment to the city.”
However, the council voted to withdraw from the proposed lease at its meeting last week.
The city’s chief executive will inform Oryx Communities Melville that the council did not agree to the proposed ground lease terms and will terminate all lease negotiations.
Oryx Communities was selected by the city as the preferred proponent to develop an aged care facility, dubbed The Majestic, at the Mount Pleasant site after a submission period in 2018.
The facility was expected to comprise of 90 to 120 suites, a community care hub providing home care services to local residents and an intergenerational child care hub to accommodate 82 places.
According to the 2020 document, the facility would have 10-20 apartments for fully serviced or assisted living for seniors.
The value of the proposed The Majestic is yet to be disclosed.
Melville councillor Margaret Sandford put forward the motion to withdraw at last week’s meeting.
“After 14 months of lease negotiations with the proposed lessee, the terms of the draft lease remain unfavourable to the city, including due to the high risk of increased delays by the lessee in meeting the pre-conditions to the lease,” she said.
“There remains significant concern by the community about the 24/7 increased traffic and parking congestion which will be generated by the proposed nursing home/childcare commercial use in this already busy area, which will become more congested with increasing density in the Canning Bridge Activity Centre Plan over time.”
Ms Sandford said the terms of the lease were also unfavourable to the city due to the two per cent cap on rent increases at both CPI and 10-yearly market review dates, and the 12-year CPI Indexation freeze on top of a generous rent-free period.
The council discussed the matter behind closed doors but has approved for associated documents to be made public in the future.
Oryx Communities was contacted for comment.
