Questions raised about City of Melville purchase of Applecross office block

The City of Melville purchased a $3.8 million office block in Applecross prior to receiving council approval.
The City of Melville purchased a $3.8 million office block in Applecross prior to receiving council approval.

CITY of Melville chief executive Shayne Silcox and Mayor Russell Aubrey entered into a contract to spend $3.8 million on a commercial office block in Applecross without first obtaining the permission of Melville council.

According to confidential council minutes obtained by Alfred Cove Action Group convenor David Maynier under the Freedom of Information Act, the City of Melville entered into a contract of sale to purchase 50-52 Kishorn Road on March 21 this year, handing over a $100,000 deposit.

Landgate records the purchase date as March 23.

However, Melville council did not vote on approving the purchase until nearly a month later at a closed doors meeting on April 18.

Dr Silcox confirmed the purchase was approved retrospectively in April but said that 50-52 Kishorn Road had previously been identified as a potential strategic acquisition under the City’s Land Asset Management Plan.

“Councillors were briefed in early 2016 (when the properties situated at Moreau Mews were approved for purchase by the council) that the Kishorn Road property was a strategic property of interest that met the criteria of the City’s Land Asset Management Plan and was a potential acquisition by the City in the event that the property became available for sale,” Dr Silcox said.

He conceded that the City may have lost its $100,000 deposit had Melville council ultimately voted against approving the purchase.

“The property acquisition was aligned with the criteria under the City’s Land Asset Management Plan and this plan has been supported by the council together with the adoption of the City’s Long Term Financial Plan,” he said.

“The question of a deposit forfeit would have been subject to the seller wishing to exercise their contractual rights under the contract of sale.”

Latest purchase just one of three recent land transactions made by City

THE revelation of the unauthorised purchase comes amid allegations the City has also breached the Local Government Act by entering into a major land transaction without preparing a business case or advertising the project for public comment.

In December 2015, the City purchased neighbouring 31 Moreau Mews for $4 million before adding nearby triplex 23-27 Moreau Mews for $3.75 million two months later in February 2016.

Melville council voted to approve both transactions prior to their execution.

The purchase of 50-52 Kishorn Road was the last in a series of three property transactions over a 15-month period totalling close to $12 million that has resulted in the City owning a 4000sq m pocket of land in the heart of the Canning Bridge Activity Centre.

Mr Maynier believes that because the three purchases are for a common purpose – to create an attractive land parcel for property developers – and the value of the transactions exceeds $10 million they should rightly be classified as a major land transaction under the Local Government Act.

According to the act, local governments are required to prepare and advertise a business case before entering in to a major land transaction.

“The City and the council have acted outside the law; the Local Government Act is pretty clear,” Mr Maynier said.

“The chief executive and the mayor also acted without the authority of council.

“The earlier purchases were authorised by specific delegation of authority. This did not happen (for 50-52 Kishorn Road).

“The council should never have approved this deal without proper legal advice.”

Dr Silcox said the acquisition of each of the three properties occurred independently of each other and that there was no indication that all of the properties would eventually become available.

“Hence none of the acquisitions constituted a Major Land Transaction as defined under the Local Government Act,” Dr Silcox said.

“The City’s solicitors also confirmed this position by way of advice prior to the acquisitions.”

In recommending Melville councillors approve the purchase of 50-52 Kishorn Road, City officers wrote that owning a 4000sq m land parcel would allow the City to explore multiple high-density development options “which may allow for the incorporation of paid public parking and other community benefits”.

Dr Silcox said the scale of any proposed redevelopment on the site – which would likely be classified as a major land transaction – meant a business case would be prepared and publicly advertised for comment before being voted on by Melville council.

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