4.10 new junction - desirability and capability for the

Ordinary Meeting of Council 09 June 2021

4.10 NEW JUNCTION - DESIRABILITY AND CAPABILITY FOR THE CITY TO INVOKE THE SUNSET CLAUSE

Ward: (Midland/Guildford Ward) (Business and Tourism Services)

Disclosure of Interest: Nil

Authorised Officer: (Executive Manager Planning and Development)

Cr Zannino declared an impartiality interest in Item 4.10 - New Junction - Desirability and Capability for the City to Invoke the Sunset Clause as previous business partners own land on The Crescent, Midland.

KEY ISSUES

• Council at its Ordinary Meeting of 12 May 2021, which was concluded on 19 May 2021 resolved unanimously to:

1) Not proceed with borrowing the $6,595,000 or transferring the $100,000 from reserve for public works on Midland Oval in the 2021/22 Budget (both part of the anticipated $50 million required over the following ten years for capital expenditure).

2) Direct the CEO to report back to Council at the June Council meeting on the desirability and capacity of the City of Swan to invoke the ‘sunset’ clause as provided in the Business Plan on the basis that the venture has been unable to “raise the funds required through market rate sales” required to justify any further expenditure for construction of Public Works.

3) Direct the CEO at a future meeting of Council to present “an alternative strategy to resolve the funding shortfall through other means such as borrowings, public private partnerships, joint ventures or grants”, as provided for in the approved Business Plan.

4) Before providing an ‘alternative strategy’ for funding of the Midland Oval Commercial venture back to Council, undertake public consultation on the draft ‘alternative strategy’ and provide a summary of this feedback to Council.

• The purpose of this report is to respond to resolution 2) above.

• An analysis of the broader context of the Business Plan identifies that it was anticipated to progress with the construction of the Public Works not only to put in place the amenity needed to then progress the commercial activities (sale of land), but also to, through the subdivision process, create the lots to sell.


• An operational funding model for the acquisition/construction of public infrastructure to enable the availability of land for sale was to date applied through the City’s normal business planning and budgetary processes.

• Notwithstanding the above, the 3 tiered approach required under Section 5.3 Development Rationale of the Business Plan clearly sets out a process for Council to consider when determining funding strategies linked to certain stages of the development. At the end of each delivery stage, prior to accepting a funding strategy for the next delivery stage of the project the Council should consider these options including the possibility of invoking the sunset clause prior to further development.

• With the project approaching the end of a stage whereby the New Junction Road and Weeip Park have been delivered, and no further project funding has been assigned for the 2021/22 budget, it is desirable to commence a Program review, that will address the need for a ‘sunset date’ to be considered, as part of the delivery program going forward.

• The capacity of the City to envoke the sunset clause will be informed by the outcome of such a Program review.

It is recommended that the Council note this report on the desirability and capacity of the City to invoke the ‘sunset’ clause as provided in the Business Plan and resolve that officers conduct a Program review of the New Junction Implementattion Program of which the outcomes will inform “an alternative strategy to resolve the funding shortfall through other means such as borrowings, public private partnerships, joint ventures or grants” as required to be reported on by Council in its Resolution 3) of 12 May 2021.

BACKGROUND

Council at its Ordinary Meeting of 12 May 2021, which was concluded on 19 May 2021 resolved unanimously to:

1) Not proceed with borrowing the $6,595,000 or transferring the $100,000 from reserve for public works on Midland Oval in the 2021/22 Budget (both part of the anticipated $50 million required over the following ten years for capital expenditure).

2) Direct the CEO to report back to Council at the June Council meeting on the desirability and capacity of the City of Swan to invoke the ‘sunset’ clause as provided in the Business Plan on the basis that the venture has been unable to “raise the funds required through market rate sales” required to justify any further expenditure for construction of Public Works.

3) Direct the CEO at a future meeting of Council to present “an alternative strategy to resolve the funding shortfall through other means such as borrowings, public private partnerships, joint ventures or grants”, as provided for in the approved Business Plan.

4) Before providing an ‘alternative strategy’ for funding of the Midland Oval Commercial venture back to Council, undertake public consultation on the draft ‘alternative strategy’ and provide a summary of this feedback to Council.


The purpose of this report is to respond to resolution 2) whereby the desirability and capacity of the City of Swan to invoke the ‘sunset’ clause as provided in the Business Plan be reported on, on the basis that the venture has been unable to “raise the funds required through market rate sales” required to justify any further expenditure for construction of Public Works.

‘Sunset Clause’ Context - Midland Oval Redevelopment Precinct Business plan

The 24 October 2018 Council approved Midland Oval Redevelopment Precinct Business Plan (The Business Plan) in Section 5.3 Development Rational identifies that:

The precinct will be developed in stages, and according to market demands. Land will not be released if the market is too low, so as to ensure optimal returns on investment.

In the event that council resolves to proceed with the construction of public works, it will need to have achieved appropriate funding through prior sales revenue in the first instance. As a fall-back option, council will determine a sunset date by which it must raise the funds required through market rate sales within the precinct, or other commercial means. Finally, if council can not achieve the sales required by the sunset date then council will need to resolve an alternative strategy or resolve the funding shortfall through other means such as borrowings, public private partnerships, joint ventures or grants.

It is this last paragraph that is reflected in Resolution 2) of Council’s May 2021 decision, and if unpacked requires the following 3 tiered approach to address funding for construction of Public Works:

1. Determine in the first instance if appropriate funding through prior sales revenue have been achieved;

2. If not, a fall-back option, whereby Council determines a sunset date by which it must raise the funds required through market rate sales within the precinct, or other commercial means has to be agreed; and

3. Finally, if Council cannot achieve the sales required by the sunset date then Council will need to resolve an alternative strategy or resolve the funding shortfall through other means such as borrowings, public private partnerships, joint ventures or grants.

Broader context to this section of the Business Plan can be found in various places in the Business Plan for example in Section 5.2 Funding Strategy where it is identified that funding for major works can be achieved through projected City cash flows and that borrowings are anticipated to be required, in Section 6.2 Implementation Steps where it is proposed that the development proceed with the public open space and public amenity in the initial stages of construction and in Section 7.3 Wider Financial Implications to Council where it is identified that the forecast budgets for acquisitions and major construction works can be funded through projected City cash flows and borrowings:

Section 5.2 Funding Strategy

The current forecast budgets for acquisitions and major construction works amounts to approximately $68.8 million within the next ten years. This can be funded through projected City cash flows, and borrowings will be required.


Section 6.2 Implementation Steps

It is proposed that the development proceed with the public open space and public amenity in the initial stages of construction. Thereafter, a business case will be prepared for each of the civic buildings presented with a financial analysis for Council decision…

Section 7.3 Wider Financial Implications to Council

The current forecast budgets for acquisitions and major construction works amounts to approximately $42 million within the next ten years. This can be funded through projected City cash flows and borrowings.

From the above it can be concluded that it was always anticipated to progress with the construction of the public open space and road infrastructure not only to put in place the amenity needed to then progress the commercial activities (sale of land), but also to, through the subdivision process, create the lots to sell.

Considering that any subdivision approval requires a lot to be fully serviced with water, electricity and road access, it follows that capital expenditure will be required to create the lots that are the subject of sale revenue as referenced in Section 5.2 Funding Strategy. It is for this reason that the Business Plan considered that borrowings will be required before lots can be made available in the market. Notwithstanding the above it needs to be read in conjunction with Section 5.3 Development Rationale whereby a 3 tiered process for funding of public works is suggested.

Desirability and Capacity of the City of Swan to Invoke the ‘Sunset’ Clause

The first stage of Public Works (New Junction Road and Weeip Park) was approved through specific Council Resolutions.

Since then an operational funding model for the acquisition/construction of public infrastructure to enable the availability of land for sale was applied and communicated through the City’s normal business planning and budgetary processes.

The operational funding model currently applied trough the Long Term Financial Plan and Budgetary process, proposes for cash flow requirements that are based on forward estimates for capital works and the sale of land, to include a mixture of Strategic Development Reserve and loan funds. Proceeds from land sales will be added to the Strategic Development Reserve which will enable the direct funding of projects and provide a sinking fund for the repayment of loans raised to meet the cash flow needs of the projects.

The process has operationally been managed through the City’s normal business planning and budgetary processes within the following guidelines:

• Capital outlays and sale proceeds will be reviewed at least annually and included in the long term financial plan,

• Civil infrastructure such as roads, drainage and public open space will be budgeted for through the usual annual budgeting processes,

• Any acquisitions or capital outlays that are not accommodated, either amounts or timing, and not budgeted through the annual budget process will required separate authorisation from Council,


• Funds applied from the Strategic Development Reserve shall be in accordance with the Council’s authorised purpose,

• Contributions and grants for various components of civil infrastructure will be held in the Strategic Development Reserve or applied to capital projects in the financial year the capital works are undertaken,

• Funding arrangement will be reviewed and included in the long term financial plan.

Notwithstanding the above and the fact that the Business Plan considered that borrowings are anticipated, the 3 tiered approach required under Section 5.3 Development Rationale is, from a project management point of view desirable to form part of an Assurance process that would include a Program Review, at the end of each delivery stage, prior to accepting a funding strategy for the next delivery stage of the project.

Such a Program review will provide assurance to officers and Council that plans for delivery of outcomes remain achievable, the risk management is effective and that the program remains on track, with effective issue management in place.

As the Midland Junction project program is now reaching the end of an approved stage where the construction of New Junction road and Weeip Park is approaching completion, a Program Review within the broad framework of the Business Plan as approved in 2018, is desirable to confirm that:

• The program assumptions remain unchanged (or require revisiting)

• The key stakeholders have a common understanding of desired outcomes and that the program is likely to achieve them

• The program’s sponsors are satisfied with the effectiveness of the program

• Any lessons learned have been or can be transferred to the next stage of delivery

• The program is still affordable (Check against Business Plan and specifically the 3 tiered approach required under Section 5.3 Development Rational and confirm the funding strategy)

• Any other factors that could affect success (Technical or otherwise) be identified and addressed

• Program controls are effective

The City’s capacity to envoke the ‘sunset clause’ relies on the outcome of the desirable Program review. It should also be noted that now that there is no proposed capital improvements for public works scheduled for the 2021/22 Financial Year, there is no requirement at this point in time to invoke the sunset date.


CONCLUSION

Although the approved Business Plan considered that borrowings would be needed to deliver Public Works, the 3 tiered approach required under Section 5.3 Development Rational of the Business Plan is desirable to form part of an Assurance process that would include a Program Review, at the end of each delivery stage, prior to accepting a funding strategy for the next delivery stage of the project.

With the project approaching the end of a stage whereby the New Junction Road and Weeip Park have been delivered, it is desirable to commence a Program review, that will address the need for a ‘sunset date’ as envisaged in the Business Plan, as part of the delivery program.

The capacity of the City to envoke the sunset clause will be informed by the outcome of such a Program review. It is therefore recommended that a Program review be conducted and that the outcomes thereoff inform “an alternative strategy to resolve the funding shortfall through other means such as borrowings, public private partnerships, joint ventures or grants” as required to be reported on by Council in its Resolution 3) of 12 May 2021.

ATTACHMENTS

Midland Oval Redevelopment Precinct Business Plan

STRATEGIC IMPLICATIONS

The City’s Strategic Community Plan 2021 – 2031 includes the following relevant objectives:

E2.1 Advocate and attract business and investment opportunities

E1.1 Actively support and develop thriving local businesses and centres

B1.1 Create community places to live, relax and work

B2.1 Manage current and future assets and infrastructure

G1.2 Engage, communicate and consult with our community and stakeholders

STATUTORY IMPLICATIONS

Statutory reporting on the Business Plan obligations in line with s3.59 of the Local Government Act 1995 is done yearly through the Annual Report, the Budget and the Annual Compliance Audit Return.

The proposed Mid Program review is desirable from a project management point of view to form part of an Assurance process and is not a requirement under the Local Government Act 1995.


FINANCIAL IMPLICATIONS

As indicated in the report.

VOTING REQUIREMENTS

Simple majority

RECOMMENDATION

That the Council resolve:

1) To note the report on the desirability and capacity of the City of Swan to invoke the ‘sunset’ clause as provided in the Business Plan; and

2) That officers conduct a Program review of the New Junction Implementation Program with the outcomes thereoff to inform “an alternative strategy to resolve the funding shortfall through other means such as borrowings, public private partnerships, joint ventures or grants” as required to be reported on by Council in its Resolution 3) of 12 May 2021.

CARRIED EN BLOC

DOCUMENT CONTROL

Version History

Version Summary of Changes Document Status and Notes Date published

1 Document written Final Version for Executive Review 2 August 2017

2and other required detail

Version review for Executives prior to OCM March 2018

3 Updated to include corporate format and SCP omissions outlined within the Business Plan relate to the Masterplan endorsed 30 January

May 2018

Authorisation

BUSINESS CASE APPROVAL:

PROJECT MANAGER:

EXECUTIVE SPONSOR:

Document to be read in-conjunction with the following documents:• • • Midland Oval Redevelopment Masterplan

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Contents Executive Summary 41 Introduction and Local Government Act Business Plan Requirements 51.1 Local Government Act Business Plan requirements 51.1.1 Advertising of the Business Plan 1.1.2 Submissions 71.2 Local Government Act - Business Plan Process 72 72.1 72.2 Strategic Direction 82.2.1 92.2.2 Strategic Community Plan 2017-2027 92.2.3 Corporate Business Plan 102.2.4 Midland Local Area Plan 102.2.5 Midland Activity Centre Structure Plan 102.2.6 Planning Scheme Amendment 119 112.2.7 Midland Public Domain Strategy 112.2.8 Economic Development Strategy 2017-2022 112.2.9 Local Commercial and Activity Centres Strategy 112.2.10 112.2.11 Council Policy 112.2.12 Summary of Strategic Direction 122.2.13 133 The Precinct 143.1 Precinct Boundaries 143.2 Ownership 143.2.1 City of Swan Property 143.2.2 Private Property 144 Primary Project Objectives 154.1 154.2 Midland Oval Redevelopment Masterplan 4.2.1 Midland Oval Redevelopment Masterplan Objectives 175 Project Strategy 195.2.1 Business Case 195.2.2 Development Deliverables 195.1 Financial Considerations 195.1.1 Development Costs 195.1.2 Analysis of Scenarios 205.1.2.1 205.1.2.2 20

5.1.2.3 205.2 Funding Strategy 205.3 Development Rationale 206 Project Program 216.1 216.2 Implementation Steps 226.3 Project Timeline 226.4 Professional Guidance 227 Financial Assessment 237.1 Commercial analysis approach 237.2 Assumptions 237.2.1 Expenses estimates 237.2.2 Income estimates 237.3 238 Statement of Project Impact 248.1 Financial Impact 248.2 Economic Impact 9 279.1 279.2 2710 Governance 2810.1 Governance structure 2810.2 Project documents 2810.3 Existing Business Plans 2810.4 2811 List of References 29

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Executive SummaryThe City of Swan prepared a Midland Oval Redevelopment Masterplan (MORM) which was

scale. The MORM will connect roads and open space with a strong bond to the surrounding

Midland Oval has been central to community life since its opening in 1901 and throughout a

through to other central destinations.

essence of Midland Oval and the role it has played for more than 100 years as the community’s

Oval will unite its people and places and celebrate the local way of life. Signalling a new urban

Activation will have a primary focus on layout and infrastructure to support daily uses such as

developments with a built form rhythm that references the development pattern in the

lighting of buildings during the night.

direct full time equivalents (FTEs) upon completion of the proposed development for new

In accordance with s3.59 of the Local Government Act 1995a Business Plan in regard to major land transactions which may occur through future

employing the earliest practical sequencing.

any joint venture proposals which may arise in the future. These decisions are subject to further business case and feasibility analysis, as required for Council decision.

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in accordance with The Act.

being generated from all private development. The increased population generated by the

enable the City to provide additional community facilities within the Midland CBD. The

1 Introduction and Local Government Act Business Plan Requirements

1.

and the Midland passenger and freight rail lines all leading into Midland2. The catchment area

catchment and employee base. The area is an established mixed-use area and includes

Recognised by the State Government as a strategic metropolitan centre3.

To celebrate Midland’s proud history and embody its potential as a commercial and residential

The City of Swan has prepared a Midland Oval Redevelopment Masterplan (MORM) which was adopted by Council on 30 January 2017 (refer Appendix A) and guides the development and

Local Government Act 1995 (The major land transactions

for future disposals or acquisitionsdisposals or acquisitions that are required to be advertised for a period of not less than six

at this stage. The Business Plan has been developed to comply with The Act which will require the City to provide annual reporting on any major land transactions relating to land within the redevelopment precinct.

1.1 Local Government Act Business Plan requirements

The business plan is to include an overall assessment of the major trading undertaking or major land transaction and is to include details of -

a) its expected effect on the provision of facilities and services by the local government.

a possible redevelopment of Midland Recreation Ground. The site had been

in the 1980s and 1990s. Purpose-built sporting establishments developed in

years.

There will be no adverse effect on existing facilities and services within the immediate area. Any additional facilities provided by the City of Swan will be to service the growing population. Infrastructure upgrades will be provided to ensure that the load that the development will place on existing infrastructure

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is accommodated by the development. The adopted MORM will have a very

into consideration the demand for vibrancy and security and family unity to accommodate the needs of the City of Swan by providing large public open space

accommodate the growth of Midland being a Major Regional Centre.

b) its expected effect on other persons providing facilities and services in the district.

The proposed development will bring a new era of apartment living into an

opportunity for residents to live within close proximity to existing and proposed

bring a mix of both vibrant and tranquil spaces allowing residents and visitors

family and friends. The increased residential population plus visitors will attract a much broader and larger customer base adding to the local economy. Land

c)

fully developed and the necessary property acquisitions and disposals of land parcels have been completed. This is further outlined within Section 8 of this Business Plan.

opportunities in Midland. The estimated direct output from Midland Oval is

d) its expected effect on matters referred to in the local government’s current plan prepared under section 5.56.

The MORM has been prepared in line with the activity centre structure plan for the Midland CBD and in accordance with State Planning Policy 4.2 Activity Centres for Perth and Peel.

Planning for the redevelopment of the precinct has been outlined in the City’s Strategic Community Plans and Long Term Financial Plans for a number of years.

e) the ability of the local government to manage the undertaking or the performance of the transaction.

The City has an experienced team of professionals capable of managing the proposed transaction. The City will contract the services of required

relevant professionals (further outlined in section 7 of this business plan). A

properties will be a Sale and Development Agreement which will provide for milestones to ensure the City meets the satisfactory outcome and ensures no

f) Other matters of which details are required to be given.

be advertised separately in line with s3.59 of The Act. The Major Trading

line with s3.59 of the Local Government Act.

1.1.1 Advertising of the Business PlanThe Act sets out the City’s requirements to advertise the business plan as outlined below (as

(4) The local government is to -

a) give Statewide public notice stating that –

i. the local government proposes to commence the major trading

notice or into a land transaction that is preparatory to that major land

ii. a copy of the business plan may be inspected or obtained at any

iii.

AND

b) make a copy of the business plan available for public inspection in accordance with the notice.

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are exemplary development which is intended to illustrate the broad built form and design intent of Council. All development will be subject to due statutory process and approvals in accordance with the Planning and Development Act 2005 at the appropriate time.

1.1.2 SubmissionsSubmissions on the City’s proposal are invited from members of the public.

whether to proceed with the Business Plan. Submissions must be received by 2pm 31 August 2018 and lodged to the City of Swan

2 Midland Square Midland WA 6056

swan.wa.gov.au

1.2 Local Government Act - Business Plan ProcessThe business plan will be advertised for public comment for a period of 3 months (The Act requires a minimum of 42 days) in state and local newspapers. Information will be

The public will have the ability to attend a virtual reality session to immerse themselves into the precinct development.

Once public submissions have closed a report will be presented to Council for decision.

precinct.

1

2

3

4

Public Advertising (min. 42 days)

Business Plan available at Administration Centre, Leisure and Library Centres

Public comment period closes - 3 month comment period

Council Report

Council Decision Reporting as per LGA (1995)

2 Project Background

2.1 Project History

direction to proceed with the project.

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2.2 Strategic Direction

Planning commenced in the 1970s and by the 1980s new facilities to replace what was

the community.

The project is aligned with wider strategic direction set out by the State Government and

made by the City over the many years of planning and relocating sports to purpose built facilities.

Identity Connected Diversity

• Midland Oval Precinct will be an iconic destination with

active community spaces with high quality streets-capes and built form.

• Midland Oval Precinct will be well connected to surround-

contemporary urban space and form while recognising the unique characteristics and history of the site and surrounds.

• Midland Oval Precinct will promote legibility and permeability through and beyond the precinct.

• frontages will encourage activation through the Pre-cinct as well as along Cale

and through to Midland traditional town centre.

• Incorporate a range of land

capitalise on investment

urban village.

• Midland Oval Precinct incorporates a major public and civic space along Cale

will provide a gateway for

activation. This will be well supported by interface of built form and land use.

Vibrant Enduring Safe

• Midland Oval Precinct is an inclusive and socially

public spaces and civic

a range of highly visible community events and activities.

• Spaces are adaptable to community and civic needs.

• A strong urban structure -

sity of public open space to accommodate changing economic and social con-ditions.

•

adaptable to changing com-munity needs.

• Midland Oval Precinct encourages community participation and designs

active (both day and night)

and passive surveillance to minimise impacts of crime.

The City has been involved in a range of studies and exercises which relate to the revitalisation

Midland’s Revitalisation Charrette and the 2007 Enquiry by Design process entitled Midland

had become increasingly recognised as a catalyst for the reinvigoration of the entire Midland CBD. The numerous proposals received in the past 50 years have either not been supported

had such a fragmented ownership it would become too onerous to gain the consensus of all participants for any development. The City of Swan recognised the social and economic

precinct.

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2.2.1 State Planning Framework

The Directions 2031 and Beyond and State Planning Policy 4.2 Activity Centres for Perth and

development.

planning for Perth and Peel in order to accommodate a forecast population of 3.5 million

within the Midland strategic metropolitan centrewhile maximising use of existing infrastructure. As detailed in Perth and Peel @3.5million

of the sub-region’s total population by 2050.

The City of Swan’s population and housing forecasts indicate that the City’s population will

2.2.2 Strategic Community Plan 2017-2027

community over the next 10 years and is our principal strategy and planning document. The clear direction set by Council ensures asset and service provision is focused to meet the

The Strategic Community Plan aims to align with the Western Australian Government’s challenge in its ‘Directions 2031 and Beyond: Metropolitan Planning Beyond the Horizon’

the near future.

Economic

MORM Response - impetus to the local economy and strengthen Midland as a Strategic Metropolitan Centre.

economic impact on the broader economy. The construction phase has the potential to

economy. The operational phase of the development is also expected to contribute positively

anchor of activity within the City of Swan.1

Natural Environment

Built Environment

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the built form to adhere to strict design guidelines to accomplish the best design possible. One of the advantages of owning the majority of land ensures that Council has authority of

proud of.

Social

Governance

transactions for future disposals or acquisitions.

2.2.3 Corporate Business PlanThe City’s Corporate Business Plan translates the aspirations of the Strategic Community Plan into operational priorities. Each of the City’s business units also has in place an annual business unit plan that sits under and informs the Corporate Business Plan.

The Corporate Business Plan and all business unit plans are reviewed on an annual basis to ensure the City remains adaptive and responsive to the changing external environment and community need.

The primary objectives of the project aim to deliver on components of the Strategic Community Plan.

2.2.4 Midland Local Area Plan

giving it a large customer catchment and employee base. Midland Place incorporates the

commercial and residential land uses.

In the provision for the project, the themes above have guided the development of the planning and design work.

2.2.5 Midland Activity Centre Structure PlanThe MORM is consistent with the City of Swan’s Midland Activity Centre Structure Plan (MACSP). The layout of the precinct has been incorporated into the City of Swan’s MACSP which was endorsed by Council and the Western Australian Planning Commission in 2018.

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2.2.6 Planning Scheme Amendment 119

2.2.7 Midland Public Domain Strategy (Draft)The MORM proposes public domain improvements within the precinct and these will align with the City’s broader strategy to improve the public domain throughout Midland. The

towards the revitalisation of the public domain in Midland.

2.2.8 Economic Development Strategy 2017-2022

population-servicing industries.

engagement.

The project aims to deliver on components of the City’s Economic Development Strategy.

2.2.9 Local Commercial and Activity Centres StrategyThe City’s Local Commercial and Activity Centres Strategy recognises the important role that Midland plays as the Strategic Metropolitan Centrenorth-east region of metropolitan Perth and a large rural hinterland.

2 by 2031.

implementation of the MORM.

2.2.10 Midland Access and Parking Strategy

2.2.11 Council PolicyAll relevant Council policy will be considered as the development progresses. Any variations

for more than 100 years as the community’s recreational and social focal point.

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2.2.12 Summary of Strategic Direction

SPP 4.2

Economic Development

Strategy

Midland Access & Parking Strategy

Local Commercial &

Activity Centres Strategy

Public Domain Strategy

Midland Activity Centre Structure

Plan

Planning Scheme Amdt 119

Investment Funds Policy

Policy

Economic

Natural Environment

Built Environment

Governance

Strategic & Policy Framework

City of Swan Strategic

Community Plan

State Planning Framework

Social

DAIP

Midland oval placemaking

strategy

Public Health Plan (draft)

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2.2.13 City of Swan Civic and Community Facilities Needs Assessment

KEY ELEMENTS FUNCTIONALITY AREA (Gross sqm) COMMENTS

1Building or civic ceremonies

Civic precinct

2Administration Building with Apartments

-

within the Midland Activity Centre

Community Purpose Building

-

Community amenity

Community amenity Green landscape experience fostering strong community and social connections.

Community amenitycelebrate the Midland way of life.

TOTAL

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3 The Precinct

of Swan and the Metropolitan Redevelopment Authority (MRA). The Midland Activity Centre

Midland as a Strategic Metropolitan Centre

Midland Redevelopment Authority (now the Metropolitan Redevelopment Authority) in consultation with relevant government agencies and the community that resulted in a strong

new hospital provides extended services for the regional area and highlights the importance

required to provide an residential densities, thereby supporting public transport investment, improving

throughout Midland. It is a critical item of infrastructure that is driving Midland’s future

train station location at Cale Street (replacing the current station) will strengthen this north-south alignment. The new station will enable greater access to Midland and its services being

and retail nodes.

The vision statement for Midland’s activity centre as a Strategic Metropolitan Centre

Midland has the opportunity and the ability to become a thriving city in its own right, serving Perth’s eastern region, Perth hills, the Avon Arc and beyond. Midland can deliver an attractive, affordable, productive and sustainable city living environment beside the rivers in the eastern corridor.

3.1 Precinct Boundaries

3.2 Ownership

3.2.1 City of Swan Property

3.2.2 Private Property

ownership in the Precinct to ensure that the redevelopment is coordinated and delivers a quality built environment for the community. To this end a number of property acquisitions have been successfully negotiated.

The City will continue to purchase property to deliver the outcomes of the redevelopment. Property required for public open space or new road reserves will be compulsorily acquired if

4 Primary Project Objectives Midland is 25 minutes from the Perth CBD and 10 minutes from Perth’s international and

Valley and the Wheatbelt. Midland CBD’s catchment stretches far beyond the City of Swan’s

Planning and development to accommodate this growth continues strengthening Midland as a Strategic Metropolitan Centre. Major transformation projects include a regional hospital/health campus, University campus, Railway Square, Midland Sale-yards,

around the CBD and close to the Midland train station. There is also a mandate to expand

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hatched - council owned

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the tourism sector within the precinct by encouraging further increases in accommodation offerings and venues that would encourage visitation growth.

The City of Swan and the Metropolitan Redevelopment Authority have invested heavily in

new residents and visitors to Midland.

history as a place for community activity since the early 1900s. With redevelopment schemes

1980s and 90s.

space and public open space (POS). The precinct is to be lively and safe and have a strong sense of place.

outcome which is attractive to suitable developers for the purpose of achieving the above

4.1 Council’s Goal, Project Objectives and Deliverables

regional development.

• •

• •

and scale.

for Midland and strengthen Midland’s role as a strategic metropolitan centre.

New Civic Identity

•

• • • A generous amount of high quality public space.

Iconic Heart

•

•

•

public spaces to support the history of the place and create a unique identity for the

•

Sticky Edges

•

• Activated building edges support movement through and beyond the Precinct. In

• engage strong pedestrian activity.

Woven Context

•

•

•

• The Precinct will establish itself as both iconic and unique while recognising surrounding

• Midland Oval Precinct will have a strong sense of community identity delivered in a

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Economic Viability

• • Appropriate density and scale to reinvigorate surrounding areas and leverage current

redevelopment potential.

building and land use provide the foundation that reinforces the vision and goals of the City.

The purpose of the Midland Oval Redevelopment Project is to complete the planning and

opportunity for Council to deliver a number of new community facilities within the precinct.

• Public open spaces• Community facilities• Residential development• Mixed use development• • Commercial development

4.2 Midland Oval Redevelopment MasterplanThe City appointed an independent architectural consultancy to prepare the draft MORM. The

commit to further public consultation for the public open space once detailed design phase

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1.9ha.

developedand optimisation of the site.

The MORM puts the development in good stead to complement other major projects within

and a new medical university set to open in 2019.

desired land use and built form for the precinct. Detailed context and technical outlines are outlined in the Midland Oval Redevelopment Masterplan Report.

4.2.1 Midland Oval Redevelopment Masterplan ObjectivesThe MORM is a strategic document that describes the City’s objectives and vision for the

• • • Accessible to public transport•

opportunities• A place where residents and users feel a strong sense of connection and ownership• The ability to accommodate a larger residential population where people can live

• Attraction for high quality investment• A boost for the economic wellbeing of new and existing businesses.

17

Colonnade frontages

to piazza

Sub-precinct

BoundaryResidential Civic Mixed useCommercial Carparking/

Commercial

Hotel & Serviced

Apartments Retail Public Art Location

* Buildings shown are indicative onlyNorth 0 50m2010

Residential ParkResidential Park

Juniper LinkJuniper Link

Land Uses KeyLand Uses Key

PiazzaPiazza

Retained existing

significant trees

Retained existing

significant trees

Civic Precinct. May include Mixed

use retail / commercial podium /

residential over

Civic Precinct. May include Mixed

use retail / commercial podium /

residential over

Mixed-use retail / commercial

podium residential over

Mixed-use retail / commercial

podium residential over

Residential apartmentsResidential apartments

Mixed-use retail / hospitality

podium Residential over

Mixed-use retail / hospitality

podium Residential over

Retail PromenadeRetail Promenade

Signalled intersection Cale

St and The Crescent

Signalled intersection Cale

St and The Crescent

Mixed-use retail /

commercial podium

commercial over

Mixed-use retail /

commercial podium

commercial over

Community green space Community green space

Mixed-use retail /

commercial podium

commercial over

Mixed-use retail /

commercial podium

commercial over

Community PurposeCommunity Purpose

Retained existing

significant trees

Retained existing

significant trees

Signalled intersection at

shared street

Signalled intersection at

shared street

Piazza stage and

outdoor screen

Piazza stage and

outdoor screen

Multi Deck Car park

& retail edge

Multi Deck Car park

& retail edge

The Masterplan

18


5 Project Strategy

5.2.1 Business Case

in order to enable Council to consider all options around the major project. This considered the project cost and revenue expectations under various scenarios developed by the City for the redevelopment of the Midland Oval Precinct. The scenarios consider the development

3. Community Purpose Building.

All civil works, streetscaping, Midland Park (8729sqm), Residential Park (4716sqm) and the Piazza (5606sqm) are components of the Public Realm work and will be developed under EVERY scenario.

5.2.2 Development Deliverables

Sub-precinct Proposed use

A

B -

C

D

E

Fuse

public open space development with all other parcels of land expected to be sold. The public

and divested.

Scenario 1 Scenario 2 Scenario 3 Scenario 4

Public Open Space & Civil Infrastructure

Develop Develop Develop Develop

Construct & Operate

Construct & Sell

Construct & Sell

Construct & Operate

Council Cham--

tration Building & Apartments

Develop & Sell Apartments

Develop & Sell Apartments

Development (Sell Land)

Development

Community Building

Develop Develop Development

Develop

Scenarios 1 and 2

Scenario 2.

Scenario 3

Scenario 4

5.1 Financial Considerations

5.1.1 Development CostsThe indicative construction cost of the City’s Core Facilities was based on Ralph Beattie

19

5.1.2 Analysis of Scenarios

5.1.2.1 Multi Deck Car Park*

If Council chooses to maintain and operate the asset they will receive a return through

value as well as future rateable income.

5.1.2.2 Civic Chambers and Administration Building*

• • • Construct the multi-purpose building.

40 apartments above. Within the commercial component is where the Council will have their Administration building and Council Chambers.

building is constructed) of the existing administration building.

5.1.2.3 The Community Building*

short term or to hold for a later date.

5.2 Funding Strategy

case and feasibility analysis for council consideration.

site awaits demolition and development. The income from future land sales and rateable income have also been included in the analysis. Operations and maintenance costs have been assumed for all the owned sites.

studies will enable the City to directly disclose the amount of funding required either by cash

sought and considered throughout all stages of the development.

5.3 Development Rationale

if council can not achieve the sales required by the sunset date then council will need to resolve an alternative strategy or resolve the funding shortfall through other means such as

and the facilitation of residential development. The residential development will provide the populace required to activate and attract further investment into the precinct.

by retail and commercial.

one or two staged approach for the construction is optimal.

and council resolution in order to proceed. This will be in accordance with the City’s facility

20


planning process. It would be expected that public amenity would be provided in and around 6 Project Program

6.1 Project Definition Plan

Plan

Feasibility Study (internal document onlystudies.

below.

PHASE 1Pre-Planning

Mid

lan

d O

val R

edev

elop

men

t

PHASE 2Masterplan & Land Use Feasibility

PHASE 3Planning & Design

PHASE 4Implementation

PHASE 5Close-Out

Preparation of Project Definition Plan

Reactivation of Midland Oval and Commercialisation Committee

Establishment of Project Team

Preparation of concept plan

Preparation of Land Use Feasibility Study

Preparation of Master Plan

Stakeholder Consultation Site Investigation Financial and

Market Analysis Approval

Review Project Plan

Confirm Core Design Team Prepare Concepts Prepare Detailed

DesignsPrepare Detailed Design Documentation

Obtain Development Approvals

Forward Works Construction Tender Construction Operations Marketing

Handover

21


6.2 Implementation StepsIt is proposed that the development proceed with the public open space and public amenity

6.3 Project Timeline

reduce the impact on council resources.

6.4 Professional GuidanceThe following team of professional consultants have been appointed by the City to assist

Goods/Services Consultant

DESIGN

Placematch

Landscaping Strategy AECOM

Consultation Estill and Associates

DETAILED DESIGN

Landscaping

Public Art Apparatus

TPG - Placematch

Economic Feasibility Colliers International

Design Guidelines Cox Architects

Acoustics Marshall Day Acoustics

REGULATORY

Planning Scheme McLeods

Subdivision Statewest Surveys

LAND SALES

Staging and Land Sales Release Strategy Colliers International

Sales TBC

Legal Advice

CIVIL DESIGN AND WORKS

Design

22


7 Financial Assessment

7.1 Commercial analysis approach

approximate total acquisition expenditure (i.e. including existing purchases) is estimated to

arise in the future. These decisions are subject to further business case and feasibility analysis.

designs have been prepared and costed for tender. Upon completion of all the relevant

modelling has considered. These will be published within future reporting of this Business

7.2 Assumptions

7.2.1 Expenses estimates

have been provided by construction cost consultants and quantity surveyors. The construction

costs for the buildings being developed have been supplied by quantity surveyors. Additional fees and margins as a percentage of the base construction cost estimates have been

the development.

costs of the respective buildings have been considered in the analysis. These have been assumed as a percentage of the base construction costs.

7.2.2 Income estimates

considered in the analysis.

Existing rental income from 12 of the lots owned have been factored into the analysis up until the buildings are demolished and properties cleared.

Expected sales proceeds are included in the analysis from the sale of certain lots. These proceeds are in nominal terms and have been escalated in the analysis.

income rates have been based on comparable City of Swan developments.

7.3 Wider financial implications to Council

Escalation rates based on the Consumer Price Index (CPI) growth forecasts for Perth and sourced from the Department of Treasury’s Economic Forecasts. The general escalation rates applied are set out below.

Escalation Rates

2017/18 2018/19 2019/20 2020/21

CPI Forecast

23


The Discount Rate estimates calculated are shown below.

Key Project Cost Elements Project Cost Elements

Real Discount Rate

with the MORM are completed and the necessary property acquisitions and disposals of

the City to provide additional community facilities within the Midland CBD.

borrowings.

Estimated Asset Valuation

Asset valuation is the process of assessing the value of an item of worth that produces cash

prior to purchasing insurance for an asset.

8 Statement of Project Impact

8.1 Financial Impact

2043). This captures recurrent operating and maintenance costs and revenue as well as the capital expenditure.

• using the discount rate above

• time period

Scenario 1 Scenario 2 Scenario 3 Scenario 4

Public Open Space & Civil Infrastructure

Develop Develop Develop Develop

Construct & Operate

Construct & Sell

Construct & Sell

Construct & Operate

Administration Building & Apartments

Develop & Sell Apart-

ments

Develop & Sell Apart-

ments

-ment (Sell

Land)

-

Land)

Community Building Develop Develop -ment

Develop

10 YEARS

Est Asset Value

15 YEARS

Est Asset Value

20 YEARS

Est Asset Value

24


Scenario 1 - Developed & Owned by the City

Scenario 2 - Developed & Owned by the CityDeveloped & Sold by the City

Scenario 3 - Developed & Owned by the City Developed & Sold by the City

Scenario 4 - Developed & Owned by the CityCommunity Building.

AUD $’000 Scenario 1 Scenario 2 Scenario 3 Scenario 4

10 YEARS

Demolition

Civil Infrastructure

Public Open Space

Council Chambers & Administration Building

Community Building

Other Costs

Land Acquisitions

Remaining Lot Sales

Existing Rental Income from remaining lots

Rateable income from remaining lots

TOTAL


15 YEARS

Demolition


Public Open Space


Community Building

Other Costs

Land Acquisitions

Remaining Lot Sales



TOTAL


20 YEARS

Demolition


Public Open Space

25



Community Building

Other Costs

Land Acquisitions

Remaining Lot Sales



TOTAL

The Public Open Space and Council Chambers and Administration Building have the highest

Scenarios 1 and 2 development. Scenarios 3 and 4 construction of the Council Chambers and Administration Building. In Scenario 3

in Scenario 2.

is constructed and operated by the City.

8.2 Economic Impact

the complete build period. The cost components were categorised by Input Output Industry

Direct employment generated through the construction phase of the project totals 254 FTE

construction and development stage through facilitation of numerous jobs once completed.

The modelling estimated the precinct’s value to the economy at full build out. The estimated

expected to have a positive economic impact on the broader economy.

26


9 Risk

9.1 Risk Identification and Analysis

Ref# Type Likeli-hood

Consequence Residual risk rating

2

Repu

tatio

n

EngagementThe City’s reputation will be negatively impacted due to community dissat-isfaction with the Project

3 Possible

10

Gov

erna

nce

Project changesChanges to project scope and outcomes throughout project leading to design and contractor varia-tions and delays

3 Possible

11

Cons

truc

tion

Injury or death during construc-tion

-formance during construction leading to incident or major accident during con-struction

5 Severe

12

Cons

truc

tion Contractor failure

Main contractor or major sub-contrac-tor insolvency result-

delays

3 Possible

9.2 Risk Evaluation and Treatment

Risk# Short Risk Descrip-tion

Treatment Details

Projected

Likeli-hood

Conse-quence

Rating

2

Engage-ment

1.1 Communi-cation Plan

3 Possible

1.2 Social Me-dia Strategy

10

Project changes

1.1 Project Manager

3 Possible

1.2 Council Reporting

11

Injury or death during construc-tion

1.1 Appoint-ment of expe-rienced Project Manager for the construc-tion phase

1 Rare 5 Severe 5 Medium

12

Contrac-tor failure

1.1 Involve-ment of Man-ager Finance in assessment of construction tenders

8 Medium

27


10 Governance

10.1 Governance structure

• The City’s internal Business Case •

• Overall Contractual regulation by the City as Vendor via contract documentation as

•

• The City’s Procurement Policy Guidelines and Governance.

10.2 Project documents

falling under this Business Plan will require formal documentation. The various documentation

•

• Design and construction drawings for the public realm (including new road and utility infrastructure)

• Licences for public realm and development sites)

•

10.3 Existing Business Plans

future associated reporting will now be incorporated into the subject Business Plan and associated reporting.

10.4 Probity and benchmarking

process and assessment.

28


11 List of References

1.

2.

3. 2015.

4.

5.

.

6. ‘Frequently Asked Questions - Midland Oval Redevelopment Masterplan’Accessed 14 February 2017

7.

8. Midland Oval Economic Impact Estimate Update

9. Consultancy Report Midland Oval Masterplan: Land Economics Feasibility Advice and Delivery Strategy

10. City of Swan - Midland Oval: Place Making Strategy

11. Midland Activity Centre Structure Plan

12. Directions 2031 and Beyond

13. State Planning Policy 4.2 Activity Centre for Perth and Peel

14. Perth and Peel @ 3.5 million

29


4.10 new junction - desirability and capability for the

Documents