Clubs concerned by bid to raise lease fees 30% Minister says rise fair
MINISTER for Environment and Climate Change Ryan Smith has stunned Victorian resorts ski clubs and flat owners with his decision to increase leasing charges by 30 per cent on ARC/VSA Leases.
The decision was advised to the Victorian Snowsports Association (VSA), with the minister citing advice taken from the Alpine Resorts Coordinating Council (ARCC).
The ARCC is largely made up of Alpine Resort Management Boards (ARMBs) members from all Victorian ARMBs, who are appointed by the minister, and are responsible for collecting leasing rates and charges. There is no Alpine Community representation on either ARCC or ARMBs.
The 30 per cent increase, to be backdated to November 1, 2013, is the maximum permissible under the industry wide ceiling level as set out in the ARC/VSA lease agreement.
The 30 per cent increase is payable in full in the first year, and not phased in by instalments as has been the case in the past, and is in addition to CPI increases.
The announcement comes after concerted efforts on the part of Alpine Resorts Working Group (ARWG), a committee of the VSA and representing all resorts ratepayers and unit holders, to work with the government including providing it with an ARWG funded consultant’s report prepared by Ernst and Young.
The E&Y report showed that the affordability of accommodation has significantly reduced and recommended that Alpine Resort Management Boards (ARMBs) need more robust governance to clearly determine funding and expenditure.
Leasing costs are levied on clubs whose sites are valued according to highest and best use rather than permitted use.
The E&Y report stated that “The study has concluded that the expiration of the ARC – VSA agreement is likely to lead to a further reduction in the affordability of accommodation in Victoria’s alpine resorts, particularly at not for profit entities. These entities will either need to significantly increase accommodation prices or withdraw accommodation. More generally not for profit entities operating outside the agreement will also need to increase accommodation prices to cover growing service charge costs.”
ARWG chair John Aird said his committee had worked tirelessly in recent years to highlight financially struggling resort ratepayers, unit holders and small business.
“We have tried to convince ARMBs and the ARCC that clubs have already cut costs to the bone and there is no room to accept increased rates and service charges levied by the RMBs,” he said
VSA president Rob Anderson said there remained a perception that ski clubs are for the well-off, whereas in fact they existed because they provide affordable accommodation for ski enthusiasts and families to use the resorts.
“Recent industry data shows Victorian snow sports consumers are making shorter duration trips to resorts, heading overseas in increasing numbers for cheaper holidays and not visiting resorts as regularly as they have in the past because of the high costs,” he said
“The time has come for the government to find another model of resorts funding or there will be serious consequences for the industry, tourism and regional Victoria...market failure is on our doorstep.”
MINISTER Ryan Smith has refuted the impact lease changes will have, suggesting there is a fair bit of “scaremongering” going on.
“A minority of sites are covered by an outdated agreement signed in 1990 that does not take in current market conditions,” he said.
“For more than 24 years, a small number of alpine lodges have been protected by this agreement and have enjoyed cheaper rent.
“In contrast the majority of alpine lodges have paid market rent, directly supporting the continued work of each resort,” he said.
“These small modifications will ensure that there is a fairer price structure for all alpine resorts.”
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