IRON ore magnate and philanthropist Andrew Forrest will pay Cottesloe Council a $146,000 rent bond after his takeover of the Indiana restaurant was agreed last Tuesday.
Mr Forrest will pay $195,000 a year for the beachfront site.
“A nine-month bank guarantee provides the town with a better estimate of risk of the lease defaulting,” Cr Lorraine Young said.
However, Mr Forrest, a Cottesloe resident, is worth about $6 billion.
The Perth Venues company linked to his family will take over a 15-year option on the building from Melbourne-based Red Rock Leisure, whose 2016 agreement with the council runs until 2031, with a further 10-year option.
Since its construction in the early-1990s, the restaurant has weathered claims of concrete cancer created during a delay in its construction, recurring arguments about maintenance and a contested 50-year lease without rent increases.
Subsequent public complaints about blocked public toilets and falling patron numbers culminated in a high-profile episode when the council put portable toilets on the beach, when Red Rock closed the public facilities under the building in protest last year.
The council’s agreement to reassign the lease from Red Rock to Perth Venues, the ability for which is in its original provisions, will require Mr Forrest to conduct all past, present and future obligations for the building.
Mr Forrest intends to run a design competition through his Dalkeith-based Mindaroo Group to find a new use for the Indiana, which can include the liquor licence held by one of his companies.
Cottesloe Mayor Phil Angers said the council had not considered what it would like Indiana to become, but any redevelopment would have to be considered by councillors.
“I think the façade will stay, that’s my understanding, and the fact is any new management could improve the place,” Mr Angers said.