City investment to generate income and jobs
14 Sep 2018
Council agreed to purchase the land next to The Quarter HQ and enter into a lease agreement with Pacifica Developments to develop and operate the hotel at a Council meeting on Thursday.
Council agreed for the City contribute up to $10 million towards the fit out of the $19.7-million-dollar development using funds from the City’s Infrastructure Reserve.
In return for this contribution, the City will receive approximately $16.5 million in rent and $5.8 million in rates during the term of the lease, which has been negotiated to 20 years instead of the 30 years originally proposed.
None of the funds to be used in the transaction have been derived from residential, commercial or industrial rates.
City of Karratha Mayor Peter Long said the property investment had the capacity to generate higher financial returns than bank term deposit rates.
“The City is in a strong financial position and this additional return on investment would provide a long-term, sustainable income stream,” Cr Long said.
“A high-end hotel is not currently available in Karratha, and the development is expected to help attract major events to our award-winning Red Earth Arts Precinct and boost business and leisure tourism.”
The hotel development is anticipated to generate more than 50 jobs during construction and approximately 40-50 full and part-time local jobs once operating.
Cr Long said it would also support nearby local businesses, many of who voiced support for the proposal during the community consultation process.
“Council has carefully considered community feedback on this proposal and have been open and transparent throughout the process,” Cr Long said.
“We understand that there are differing views in the community about whether the City should support this proposal but on balance decided to proceed as the proposal is consistent with our Strategic Plan, continues the momentum that has been gained in recent years and presents a sound investment opportunity.”
The City will now execute the lease with Pacifica Developments.
Pacifica Developments director John Zendler said he was excited to get the green light for the hotel development.
“This hotel will enhance and activate Karratha’s modern city centre and offer visitors upmarket accommodation close to cafes, restaurants, bars and within walking distance to the arts precinct,” Mr Zendler said.
“We have a proven track record of successfully developing and operating hotels over the past 30 years and have been involved in more than $1.5 billion of developments in Australia and overseas.”
Construction is scheduled to begin in January 2019, with the hotel estimated to open in February 2020.
Image: A preliminary artistic impression of the hotel development. Credit: Pacifica Developments