Myer’s mates rates secret
THE Hobart City Council has refused to say for how many years the developer of the Myer complex will receive a concession on rates, despite the details of other similar arrangements being public.
Council’s latest annual report shows the value of the rates concession in 2018-19 to Icon Complex developer E Kalis Properties Pty Ltd was $362,409 — up from $154,416 the previous financial year.
A council spokeswoman said the value of the remission had significantly increased because of a recent revaluation of the property by the ValuerGeneral.
The rates paid by the developer are capped, based on the value of the property as at January 18, 2012, limited to CPI increases.
Preliminary works on the site began in 2014.
The council’s general manager Nick Heath said the rates cap was in place for “a defined period”.
The Mercury understands the period to be 20 years, making it the longest deal of its kind still in place.
The council voted to provide incentives to department store giant Myer and developer Kalis in October 2010 to help get the development off the ground, years after the former building burnt down.
The council also still makes cash payments to Myer of $875,000 each year over four years if the store’s gross sales are below an agreed figure, which in the first year was $50 million.
Up until January this year, two instalments of this money had been paid, according to the annual report.
The final stage of the Icon Complex is set to be finished early next year, with the opening of the Crowne Plaza Hotel.
Developer Sultan Holdings Pty Ltd also receives significant rates remission from the council for its Wellington Centre development, which was completed in 2013.
The company received the highest value of reduced rates of any ratepayer for last financial year at $383,210.
The reduced rates agreement for this development is in place for 10 years, with two years remaining.
Lord Mayor Anna Reynolds, speaking as a councillor, said rates concession agreements for private developments were not on the current council’s agenda.
“These current deals were made at a different point in history — in my personal opinion these kind of arrangements are not appropriate for a growing city,” she said.
“It is essential that we maintain a strong rates base to provide infrastructure.”
“I am pleased that we are looking to receive full rates from UTAS as part of our new agreement with them. This is the kind of arrangement I think we need with all developers in Hobart in the future.”