LARGE ATTACHMENT ' SD-031-17 Bentley Regeneration Project

LARGE ATTACHMENT

‘

SD-031-17 Bentley Regeneration Project – Proposal by State Government in relation to reserves managed by the City and future collaboration arrangements.

Attachment 4 Collated Correspondence between City and State Government re Bentley Reserves. Date Correspondence 28 Jun 2012 Housing D-G to City Mayor “As articulated in the Heads of Agreement the Department of Housing fully supports the City of canning acquiring the reserves in the Brownlie Precinct form the State Government…”

“It is our opinion that the acquisition of the reserves in freehold title by the City of Canning is an important element of this project and one that will ensure that both parties will contribute towards the final product…” 27 Aug 2012 Dept of Lands to City Acting CEO I wish to advise that Reserves 32095 and 35021 can be considered for transfer to the City at 5% market valuation and such transactions need approval from the Minister for Lands.

Reserves 27064 and 27540 were transferred to the State of WA from the State Housing Commission and it is possible that with the agreement of the City and the Department of Housing that this Department [Lands] could transfer the land to Housing for nominal consideration. 25 Sep 2012 Housing Program Director Stretegic Projects - Lands Manager Metropolitan

The City spoke to the [Housing] Authority with respect to.. [your letter dated 27 August 2012…

Whilstt the [Housing] Authority recognises and appreciates reserves 27065 and 27540 could be provided to the Authority once management orders in favour of the City are revoked, the Authority is cognisant of its Heads of Agreement with the City and the commitment of both parties to deliver the outcomes for the regeneration of the Brownlie Precinct

If Reserves 27540 and 27065 were issued to the Authority then the City would have very limited land ownership within the precinct and it is felt that this would be an impediment to the overall development outcomes and regeneration of the Brownlie Precinct.

Unless the City is a major land owner in this precinct, facilitated through the acquisition of Reserves 27540 and 27065 and their own 32095 and 35021 it will not be able to financially contribute to these outcomes at an appropriate level.

As such the Authority……supports the Department of Regional Development and Lands making available both reserves 27540 and 27065 for acquisition.

Lands Manager Metropolitan – Housing Program Director Strategic Projects The department has considered your [Housing’s] reply and can request the Minister for Lands approve the Transferes of Reserves 27450 and 27065 at 5% of the current market value.

Can the Department of Housing please provide a letter of agreement advising that they undersand the process being undertaken and are willing to have the land transferred to the City of Canning? 7 May 2013 Housing Director Stategic Projects – Lands Manager Metropolitan This letter provides update of the project and provided the Authorities support for the above reserve land parcels being converted to freehold title and sold to the City at the agreed rate.

Date Correspondence 4 May 2015 WAPC to City CEO The WAPC resolved on 14 April 2015 to: “3.. endorse the request by the City of Canning to purchase the following reserves at 5% of the market valuation subject to the approval of the Minister for Lands. 4.. endorse the disposal and sale of surplus reserves (or portions of) within the local structure plan area and the conversion of these reserves to freehold land and the utilisation of funds from the sale of these reserves being utilised to realise the proposed revitalisation of community facilities for areas of the Bentley suburb.” 21 Sep 2015 Email from Lands to City stating any request to purchase the Crown reserves must be presented to Land Asset Management Advisory Group (LAMAG) using attached business case template. 11 Nov 2015 City’s CEO wrote to 29 Agencies (LAMAG members) seeking support for acquitsion of the Crown Reserves & providing business case 1 Mar 2016 Director General – Lands to City CEO Informs City that is proposal is not supported, stating: …”As discussed, LAMAG reviewed the City of Canning’s Business Case and concluded that, in the best interests of the Bentley Regeneration Project, as outlined in the WAPC approved Local Structure Plan, the land comprised in the Masterplan area would be best developed by a single entity which is to be appointed by the State. To facilitate this decision, the City is requested to surrender its management orders for Reserves 27065, 27,540, 32095 and 35,021 (Attachment 1)”

12 May 2016 Letter from City Director Economic Development to Lands Outlines expected replacement costs and informs Lands that the City will need to be adequately compensated in order to surrender those reserves. 5 Dec 2016 Letter from City CEO to Lands Director General Informs Lands that its offer falls short of the funds required to replace facilities, upgrade parks and infrastructure. 18 July 2017 Letter from City’s CEO to Minister Tinley (attaching correspondence from 28 June 2012 to 7 May 2013)

Letter confirms 6 July 2017 meeting discussion, provides background information and foreshadows terms that City staff would recommend to City’s Council.

31 July 2017 Letter from Minister Tinley to City’s CEO Clarifies part of Minister’s offer referred to in City’s letter dated 18 July 2017, and undertaking to provide more detailed response. 21 Sep 2017 Letter from Minister Tinley & Minister Saffiotti to City’s CEO Proposing terms for City surrendering Management Orders, as outlined in this Council report (Dec 17 OCM),

G W A D R D L

S L S - : 27CANNING : 00437-2012-01 J: 121861 : J C P: (08) 6552 4597 29 A06 LI A 2012 F: (08) 6552 4415 J. C... M A S A/C E O T1F C C PL -11-2. L B 80 R" L. WELSHPOOL WA 6986 :

D M S,

ACQUISITION OF FREEHOLD TITLE OVER SEVERAL RESERVES IN BROWNLIE PRECINCT

I 17 J 2012 .

I R 32095 35021 C C ( C) 5% M L ( M). S M S W A S 20A T P D A 1928.

R 27065 27540 S W A S H C C D H (H) D H / . T M .

T C M O R 27065 27540 S 50(1 )() L A A 1997. T H C H. C D .

T C C C M C 4 5% .

W D P' 'D 2031 B',

G S H, 140 W S, P W A 6000 P0 B 1143, W P W A 6872 T: (08) 6552 4400 F: (08) 6552 4417 F: 1800 735 784 (C ) E: . L W: .... ABN 28 807 221 246 2 W D P' 'D 2031 B', D W A P C .

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J F C S MANAGER - METROPOLITAN STATE LANDS SERVICES

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B B : N D H 99 P S EAST PERTH WA 6004

D M B,

ACQUISITION OF FREEHOLD TITLE

T 25 S 2012 R 27540 27065 C C.

T D M L R 27540 27065 5% . W L, V S V G

C D H C C.

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C F C S - STATE LANDS SERVICES

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G S H, 140 W S, P W A 6000 P0 B 1143, W P W A 6872 T: (08) 6552 4400 F: (08) 6552 4417 F: 1800 735 784 (C ) E: @... W: .. ABN: 28 807 221 246

CITY OF CA IG Western AUSfrolion - 4 MAY 20/5 'C' I9. RECEIVED ^~- ^--~^,,..

Your Ref: PL. J2.2 014/373877 Our Ref: SPN/0623/1 Enquiries: Gemma Basley (Ph 6551 9578)

Chief Executive Officer City of Canning Locked Bag 80 WELSHPOOL WA 6986

Attention : Will Baston

Dear SinMadam

BENTLEY REGENERATION LOCAL STRUCTURE PLAN

I refer to correspondence regarding the abovementioned matter.

The Western Australian Planning Commission (WAPC) resolved on 14 April2015 to:

endorse the Bentley Regeneration Project Local Structure Plan that provides a future plan for the redevelopment of land predominantly owned by the Department of Housing, located in Bentley and comprising the 'Brownlie Towers', subject:

to the attached Schedule of Modifications;

to the intent and focus of the Local Structure Plan being implemented through appropriate precinct planning in the local development plan.

endorse the principles of the Community Facilities and Public Open Space Strategy in terms of:

the re-allocation of Public Open Space Reserves by the City of Canning across the Local Structure Plan Area;

the replacement of community facilities by the City of Canning within the Local Structure Plan Area and the establishment of a central Community Hub facility within the neighbourhood centre and at a location that will be determined at the development stage.

140 William Street, Perth, Western Australia 6000, Locked Bag 2506 Perth, 6001 Tel: (08) 65519000; Fax: (08) 65519001; Infoline: 1800626477 e-mail: corporate@planning. wa. gov. au; web address http:11www. planning. wa. gov. au ABN 35482341 493 Western AUSfrolion ' C'"". 9 '

endorse the request by the City of Canning to purchase the following reserves at 5% of the market valuation subject to the approval of the Minister for Lands:

Reserve 32095; Reserve 35021 ; Reserve 27065; and Reserve 27540.

endorse the disposal and sale of surplus reserves (or portions o0 within the Local Structure Plan area and the conversion of these reserves to freehold land and the utilisation of funds from the sale of these reserves being utilised to realise the proposed revitalisation of community facilities for the areas of the Bentley suburb.

Should you wish to discuss this matter further, please contact the assigned planning officer listed above.

Yours faithfully

Tim Hillyard Secretary Western Australian Planning Commission 22 April2015

CC: Department of Lands

Enclosure: Schedule of Modifications

140 William Street, Perth, Western Australia 6000, Locked Bag 2506 Perth, 6001 Tel: (08) 65519000; Fax: (08) 65519001; Infotine: 1800626477 corporate@planning. wa. gov. au; web address http:11www. planning. wa. gov. au ABN 35482341 493 From: Chuah, Teong To: Will Baston Cc: Smith, Cecelia; Nguyen, Trinh; Paul Merlo; Mike Mouritz; Turnbull, Matt Subject: Brownlie Towers Business Case Template Date: Monday, 21 September 2015 11:05:02 Attachments: image003.jpg Business Case Proposal Template.docx

[Our file: 00437-2012 Job No. 121861]

Good morning Will,

Further to our meeting last week, please find attached to this email a business case template for the City of Canning (City) to use as a guide to support the City’s request in purchasing Crown reserves for the Brownlie Towers Project.

As mentioned in the meeting, the business plan will be brought to the attention of the Land Asset Management Advisory Group (LAMAG). The City will need to provide the Department of Lands (DoL) with this business case before 13 November 2015 in order to make the next LAMAG meeting which is being held on 10th December.

It was mentioned that the City may need more time to prepare the business case, and as such the following LAMAG meeting is scheduled for some time in February 2016 (date to be confirmed by Land Asset Management Unit). Please note that the business case will need to be provided a few weeks in advance of this meeting to enable DoL to place the Brownlie Towers Project on the meeting agenda.

I will be requesting Landgate Valuation Services to provide an updated current market valuation on the subject Crown land lots.

Should you have any questions please don’t hesitate to contact me.

Regards

DISCLAIMER: The information contained in this email (including attachments) is intended only for the use of the person(s) to whom it is addressed as it may be confidential and contain legally privileged information. If you are not the intended recipient you are hereby notified that any perusal, use, distribution, copying or disclosure is strictly prohibited. If you have received this email in error, please immediately advise us by return email and delete the email document.

This email and any attachments to it are also subject to copyright and any unauthorised reproduction, adaptation or transmission is prohibited. This notice should not be removed. Enquires: Mike Mouritz Telephone: 9231 0798 ^,^^ Our Ref: 015/255078 ^;::I^"ityo CANNING Date: 1.1 November 2015

The Under Treasurer Department of Treasury Locked Bag 1.1 Cloisters Square PERTH WA 6850

Dear M, ^es Business Case Proposal - Acquisition of Crown Land as part of the Bentley Regeneration Project

I wish to draw to Your attention the above matter which is an item that will be discussed at the next meeting of the Land Asset Management Advisory Group. Given the significance of this urban infill project for Perth it's important to provide you with The City's perspective of the project.

Over the last 5 Years, the City of Canning has been working with the State Government, particularly with the Housing Authority, to put in place all the necessary planning frameworks to achieve the outcomes associated with the Bentley Regeneration Project. The premise of the City's involvement over this time is that the reserved land at the southern portion of the greater Project area would be able to be purchased as freehold land at 5% of its value. This land would then be available to develop as part of this important in fill project.

The proceeds generated from the sale of this land would then be utilised by the City to undertake direct improvements into the public realm (such as dual use pathways, traffic calming, street scaping) and public open space, along with replacement of community facilities within the Bentley suburb.

Throughout the planning and engagement process, the key point communicated to the community has been for the reduction of reserve land to be traded off against improvement in the quality of open space and facilities. If the Cityis not able to acquire the reserve landsin this manner, the Council would be placed in a position where it would need to reconsider the merits of the Local Structure Plan and give consideration to retaining existing community facilities.

The City has recently achieved a significant milestone for the overall project by securing a development partner to deliver the Bentley Hub at the centre of the Project area. The City is keen to work with the State Government to develop a delivery model for the overall Project area.

The City of Canning would appreciate your agency's support for the acquisition of the land in question. The Business Case attached articulates this proposition. If You require any additional information please don't hesitate to contact Dr Mike Mouritz directly on 04,9273323 or mike. mouritz cannin .wa. ovau.

Yours faithfu Iy

PI 1317 Albany Highway Cannington byn Russell PSM lenter from George St. Westl Chief Executive Officer Please address correspondence to Locked Bag 80, We Ishpool, WA 6986

Telephone: (08) 9231 0606 Facsimile: (08) 94582353 Web: WWWCanning. wagov. au Above o11 Se rvice Email: customer@canning. wagov. au D16/30545

Government of Western Australia Department of Lands

CITY OF CAPJNIWG Our ref: 00437-2012 Job No. 121861 9 MAN 2016 Enquiries: Cecelia Smith - Ph: 6552 4547 Fax: 6552 4417 Doc No. Email: Cecelia. smithlands.wa.gov.au

File No. Ms Lyn Russell 1J, AS. Chief Executive Officer . City of Canning ( 5o4t Locked Bag 80 WELSH POOL WA 6986

Dear Ms Russell REQUEST FOR THE CITY OF CANNING TO REVOKE ITS MANAGEMENT ORDERS FOR RESERVES 27065, 27540, 32095 AND 35021 TO FACILITATE THE BENTLEY URBAN REGENERATION PROJECT, CITY OF CANNING Thank you for meeting with me and the Manager of Metropolitan and Peel, Ms Cecelia Smith, on 21 January 2016 to discuss the outcome of December's Land Asset Management Advisory Group (LAMAG) in relation to the proposed Bentley Urban Regeneration Project.

As discussed, LAMAG reviewed the City of Canning's (City) Business Case and concluded that, in the best interest of the Bentley Urban Regeneration Project, as outlined in the Western Australian Planning Commission (WAPC) approved Local Structure Plan, the land comprised in the Masterplan area would be best developed by a single entity which is to be appointed by the State. To facilitate this decision, the City is requested to surrender its management orders for Reserves 27065, 27540, 32095 and 35021 (Attachment 1).

Pursuant to section 50(3) of the Land Administration Act 1997 (LAA) the City can apply for compensation for the improvements that have been lawfully made on the reserves. In anticipation of this DoL has instructed Landgate Valuation Services to provide a valuation for the City's improvements over the subject reserves.

To support LAMAG's decision the following will need to be undertaken; 1. The City request and agree for the Minister for Lands, care of DoL, to revoke the management orders over Reserves 27065, 27540, 32095 and 35021.

2. DoL will liaise with the City to provide statutory declarations regarding any registered and unregistered interests and possible contamination on the four Crown reserves. It is a requirement to obtain these statutory declarations from the City prior to the management orders being revoked. 3. The City to assist Landgate Valuation Services, as necessary, in regards to compensation for the City's improvements.

Gordon Stephenson House, 140 William Street Perth Western Australia 6000 P0 Box 1143 West Perth Western Australia 6872 Telephone (08) 6552 4400 Facsimile (08) 6552 4417 Freecall: 1800 735 784 (Country only) Email: [email protected] Website: www.lands.wa.gov.au ABN: 68 565 723 484 D16/30545

4. DoL and the City to liaise on any compensation upon receipt of valuation advice from Landgate Valuation Services. Thank you for your participation in the Bentley Regeneration Project aimed to maximise the use of Crown land and meet the State Government's strategic urban infill objectives. The community stands to benefit from this project through the redevelopment of public facilities and enhanced public open spaces, as identified in the local structure plan.

For further enquiries please contact Cecelia Smith, Manager, Regional Metropolitan Services, DoL on telephone 08 6552 4547.

Yours sincerely

Cohn Slattery Director General

0 j March 2016

2 ""^;"'2016;:q.,

Cecelia Smith Department of Lands Level2,1.40 William Street PERTH WA 6000 Ref: DJ6/64787

Dear Cecelia

Valuation of Assets at Hedley Park Bentley (Reserves 27065,27540,32095 AND 3502, )

Further to Your letter of I March 2016 (your ref 00437-2012 Job No. 12/861) and a meeting between representatives of Landgate (Stephen Fern and Vince Lumbus) and the City's officers on 22 March 201.6 regarding this matter, we have now complied necessary information related to Current Replacement Cost of the assets at Hedley Park for your review.

Please find below a table which summarises these values. Attached is a table which provides the detailed account of the assets. These figures are derived from the City's Asset Register and are based on licenced valuers documented reports and detailed asset condition assessments.

Asset Type Current Replacement Cost Land Areas M2 Building Assets $7,884,170.59 3,745

Park Development Cost $721,961.44

Irrigation $264,319.00 1.00

Recreation Assets $724,694.00 18,565

Car Parks & Drainage $980,243.68 9,300

Total $10,575,388.71 31. ,71.0 M2

The total replacement costs are in the order of $10.6 million.

To replace or relocate all these facilities the City would need to find 31,710 in2 of land. At current Bentley land values of approximately $500 in2 (which is based conservative Iy on recent valuations in the area) this would equate to land replacement value of $15,855,000. Above all - Service 13/7 Albany Highway Cannington (enter from George St West) Tel: 1300 422664 Email: customer@canning. wagov. au Please address correspondence try Locked Bag 80, We Ishpool WA 6986 Far (08) 94582353 WWWCanning. wa. gov. au We have reviewed our operating records and point out that the City has spent in the order of $1.7 million over the life of the park lands on maintenance. Further, we estimate that more than $1 million dollars has been spent on facilities maintenance over the lifetime of the assets.

In addition we provide a document titled 'Bentley Regeneration Project - History of Southern Reserved Lands Discussions'. This sets out the relevant interactions with the Department of Lands (and its predecessor) and other relevant agencies over the past few years regarding the basis upon which the City entered into the Bentley Regeneration Project.

If it is to release the Management Orders on these reserves, the City now seeks adequate compensation for both the assets and a consideration of the fact it will need to find suitable land to replace these facilities. We stress that the City is very keen to see the Bentley Regeneration Project progress, however, we need to be in a position to fund the redevelopment of public facilities, enhanced public open spaces, and complete other civil works in the surrounding area as identified in the Local Structure Plan.

Your sincerely ^./^^,/ Mike Mouritz

Director Economic Development

Stephen Fern, Specialist Valuer - Landgate

I Midland Square, Midland WA 6056 Land Required City of Canning Structure and Improvement Replacement Cost 130-615j jin2)

Recreation Assets

Benches Hedley Park 112'$1200j 1,400.00 10

Bentley Community Centre - Playground 30 000 00 300

Bins 3128.00

Drinking Fountain Hedley Park 2500 00 5

Play Equipment Hedley Park $ 15 000 00 150

Signs Timber Routed park Namej'2 1500 00

Ballard ^ Perimeter 1665 Linear Metres '$5011. Sal 2216600

He diey Park Netball Court 1'12@$28000 eachj $ 336,000 00 8300

Hedley ParkTennis Court Concrete ' 5'$400001 $ 200,000 00 9800

He diey Park Tennis Court Concrete ' 10'510 0001 $ 100,000.00

TOTAL S n4.694.00

Park Development Cost

He diey Park Development Cost $ 721,961 44

TOTAL $ 721,961. "4

Building Assets

Bentley Community Centre $ 2,200,000 co 1100 gentley Community Centre - Fencing 2401.65 gentley Community Centre - Gazebos & Shade 9050 00 60 gentley Scout Hall $ 230,000 00 200

Bentley Scouts - Fencing '57/98 135

Can nine Lawn Tennis Club - B uilding $ 1,070,000.00 400

Canning Tennis Club - Fencing 28146.96

Canning Tennis Club tourt Lighting 114'515000j S 210,000.00

He diey Pa rk Cha rige rooms $ 700,000.00 200

Hediey ParkTo!let Block S 140,000.00 300

Pendana - Multicultural Day Centre $ 1,550,000.00 750

Bent!ey Library $ 1,740,000.00 800

TOTAL $ 7,884,170.59

Car Parks & Drainage

Community Centre ^ Car Park $ 347,217.20 6300

Canning Tennis Club - Car Park $ 65145.00

Drainage $ 398,101 00 gentley Library - Car Park $ }69,780 48 3000

TOTAL $ 980,243.68 Irrigation

Artesian Bore 102863.00 50

Fluv, Meter 2836 00

Supefficial Bore 15 000.00 50

Replace Controller'2 S 40 000.00

Reticulaiion pipe network $ 103,620.00 31710

TOTAL S 264,319.00

GRAND TOTAL $ 10,575,388.71 31710 M2 Bentley Regeneration Project - History of Southern Reserved Lands Discussions

Introduction

This document provides an outline of the rationale of the City of Canning's involvement in the Bentley Regeneration Project. It focuses on the understanding within which the City entered into the process of rezoning and assisting in the process of preparing a structure plan to guide the redevelopment of the area, particularly as it relates to the proposal to convert the reserved land to freehold land at He diey Park in Bentley - Reserves 27065,27540,32095 and 35021. (Note: this docu merit provides the City's document numbers of all significant correspondence).

History

The City of Canning (City) commenced working on the Bentley project with the Department of Housing (DOH) in late 2008. During 2009 and 2010 work progressed on preparation of the Master Plan for the area. At that time the project was referred to as the Brownlie Towers Precinct. The City entered into this process in a bid to see the renewal of a precinct in need of urban regeneration.

It is also important to note, that as a consequence of the investment in the planning undertaken by DOH and the City, that this precinct has been recognised as a key urban infill location within Directions 2031.

In June 2009, the City and DOH entered into a Memorandum of Understanding (014/288347) regarding preparation of the Master Plan. As well as preparing the Master Plan a key step in realising the urban regeneration of the area it required the rezoning of the area to allow the envisioned development. This included the proposal to rezone the southern portion of the site from open space to development.

As a consequence of the work undertaken on the Master Plan, in October 2011 Council considered a proposal to rezone the area to a development zone to allow the project to move forward. This included rezoning the reserved land to a development zone. At this time Council was not satisfied that it had a clear picture of the consequences of that rezoning. In particular the Council was concerned about the impact on the Community Facilities, the reserved land and the extent of any coin pensation. Because of this uncertainty Council deferred consideration of this matter until a Heads of Agreement clarified the intent and likely outcome (Council Report CF-033-11).

This decision led to a series of discussions and negotiations between the City and DOH in early 2012 regarding the terms of a Heads of Agreement (HOA). The HOA was ultimately endorsed by Council and signed in August 2012 (on 2134989). The HOA set out the objectives of the project and responsibilities of the parties including undertaking planning, consultation and land assembly.

U rider the terms of the HOA it became the City's responsibility to initiate a process to request acquisition of reserves for the value 5% of the unimproved market value from Department of Regional Development and Lands (DRDL). This would allow the City to be able to sellthatland into the project and to use the additional funds generated to facilitate the replacement of community facilities and embellishment of public open space in the broader Bentley area around the development. After a series of meetings with DRDL (which included DOH representatives) the City made a formal request on 17 July 2012 (014/288498) to DRDL to purchase the reserved lands for 5% of their value. As part of this proposal a letter of support was provided by the Director General of DOH providing their full support for the proposal and the project as a whole.

It is important to note that as a consequence of the positive support of DOH and the informal support from offices of DRDL regarding the proposal to purchase the reserved lands at 5% of their value, Council took the step to initiate the rezoning of the precinct (that it had previously deferred in October 2011) in May 2012. In effect the City took the step to rezone the land in good faith and as part of the Heads of Agreement (which was in a draft form at that time) to assem ble the land ready for the redevelopment of the precinct.

In August 2012 (012/36906), the City received advice from DRDL that the reserved lands could be presented as a business case to the Minister for disposal for the value of 5%. This advice also pointed to the need for DOH to provide additional specific supporting feedback to DRDL regarding two of the reserves because of the way the land was vested. DOH provided their reconfirmation of their support in a letter to DRDL in September 2012 (012/46454)

Further discussion and correspondence occurred between the City, DOH and DRDL regarding the mechanics of the process in early 2013. In June 2013, DRDL (013/68249) advised that the proposal could not be presented to the Minister until such time as confirmation had been received from the Western Australian Planning Commission (WAPC) that they were supportive of the change of status of the open space.

The City was advised by officers of Department of Planning that this step could not be achieved until such time as the WAPC had considered and endorsed the rezoning and Local Structure Plan developed for the area.

During this period the City also worked with DOH and their consultants to prepare a Local Structure Plan for the area. This document would guide redevelopment of the area. It is important to note that during the consultation processes the rationale that was presented to the community indicated that while there would be a reduction of public open space as a consequence of the development, the quality of the open space within the development and surrounding the development would be significantly enhanced. Funds from the conversion of the open space to freehold would be used by the City to replace community facilities, improvement of the open space and civil works in the area surrounding the project. These improvements are documented in the Local Structure Plan. The City has already spent over $600,000 upgrading two parks andjointly funding cycle-way improvements.

The Local Structure Plan was considered by Council in November 201.3 (Council Report PD-095-I3) and was endorsed to be submitted to WAPC.

The town planning scheme amendment that allowed for the creation of development zone over the area was considered by WAPC and gazetted on 9 May 2014 (015/20691). The Local Structure Plan forthe area was endorsed almost a Yearlater by WAPC on 14 April2015 (005125353). Formal advice from WAPC regarding its support for the pu rchase of the reserved land was provided to the City (COPY to Department of Lands) on 22 April2015 (015/195644). The City sought to move the process of acquisition of the land forward during 2015, however, was advised on the 16 September 2015, at a meeting with DoL, that the City would need to submit a Business Case to the intergovernmental committee considering these matters called Land Asset Management Advisory Group - (LAMAG). The verbal advice at that time was that the Government had changed its view with respect to the purchase of land for 5% of the value and was seeking to modify the policy with the aim of obtaining higher returns for the government.

A Business Case was prepared by the City and submitted in November 2015. The Business case was considered by LAMAG in December 2015 (DJ6/255078). After meetings between the Director General of Land and CEO of Canning in January 2016 the City was formally advised on I March 2016 (016/30545) in a letter from DoL to the City, which requested that the City surrender its management order over the reserved lands after agreement is reached on compensation for the improvements it has made to the land. The City has now provided Current Replacement Cost for all assets on the reserves and an estimate of the land area and its value, if the City was required to find sites to replace these facilities.

Summary

In summary the City entered into a process to rezone and assist in the preparation of a Local Structure Plan to guide the urban regeneration of the area. These steps were taken to allow development to occur over reserves for which the City has management orders. The City entered into this process on the basis of (verbal and written) advice that it would be supported to purchase the reserved land for 5% of the market value, thus providing the compensation for the loss of open space and replacement of community facilities. The original submission was made to the Department of Regional Development and Lands in July 2012. The process of obtaining all the necessary documentation and supportfrom state government agencies took nearly 3 Years' The City was then advised that the basis upon which it had entered into this process had changed. The City now seeks adequate compensation for the surrendering of the management orders over the reserved lands referred to as Hedley Park - Reserves 27065,27540,32095 and 35021. D16/120997 ir+ Government of Western Australia Department of Lands JL.

Our ref: 00437-2012, Enquiries: Matt Turnbull, ph 6552 4778

TYOF Mr Arthur Kyron Chief Executive Officer City of Canning 25 AUb 2816 Locked Bag 80 Welshpool Western Australia 6986 Do. No.

F 'fr. J_Lg.e2. ReLc. j±_± Dear Mr Kyron coc- &?o-3; BENTLEY REGENERATION PROJECT

I refer to a meeting held earlier this year with your predecessor, Lyn Russell and Mike Mouritz, Director - Economic Development, and my subsequent letter dated 1 March 2016 requesting the City and the State work together to achieve the redevelopment of Bentley.

Specifically the City indicated it would surrender the management orders for the four reserves, (Nos: 27065, 27540, 32095 and 35021), which are essential to the overall redevelopment, on the basis that the State would pay compensation to the City for the improvements on those reserves.

The Department of Lands has since been provided with a valuation from the Valuer General for the improvements as per the asset list provided by the City (letter attached).

The lawful improvements at Hedley Park considered by the Valuer General are described as follows: • Bentley Community Centre; • Pendana Multicultural Day Centre; • Bentley Scout Hall; • Canning Lawn Tennis Clubhouse; • Hedley Park Netball Change rooms; • Hedley Park Toilet Block; and • Bentley Library.

The improvements have been valued by the cost approach based on the depreciated replacement cost of the improvement. This requires the estimation of the cost of replacing each infrastructure asset, which is then adjusted for obsolescence (i.e. depreciated) in order to reflect the remaining service potential to the entity or economic life of the asset.

The aggregated value of the subject improvements at Hedley Park owned by the City of Canning for compensation purposes has been determined at $5,591,300. Compensation payments do not attract Duty and are not subject to GST.

The next step in this process is for the City of Canning to consider the compensation amount and whether or not it is in a position to accept this valuation. Upon acceptance of the valuation amount the City is required to write to the Department of Lands advising that it is willing to revoke its management orders.

A Deed of Agreement will then be entered into between the State and the City rather than a contract of sale or transfer. The State, through the Land Asset Management Advisory Group, will then be in a position to progress a divestment strategy for the whole of the Bentley redevelopment area.

If the City does not accept the valuation the City it is invited to obtain its own valuation following which a meeting will be arranged with the Valuer General's Office to further discuss options.

I suggest that once the City has had an opportunity to consider the next steps and submit its position on the mailer a meeting is arranged through rhy Executive Assistant, Ms Kerrie Prior on telephone 6552 4765 or email: dqea land s.wa.gov.au.

For more technical information please contact Mr Mail Turnbull, Executive Manager - Land Asset Management on telephone 08 6552 4778.

Yours sincerely

Cohn Slattery Director General

//August 2016

Att.

2 D16/120997

Landgate & Valuations

Your Ref: 00437-2012 Job No. 121861 Our Ref: 9444-2015 Job: 184261 Enquiries: Stephen Fern Ph: 9273 9178 E-mail: [email protected]

7 July 2016

Manager - Regional Metropolitan Services Department of Lands 140 William Street PERTH WA 6000

FOR THE ATTENTION OF MR TEONG CHUAH

VALUATION OF INFRASTRUCTURE IMPROVEMENTS LOCATED AT HEDLEY PARK, BENTLEY CROWN RESERVES 27065, 27540, 32095 AND 35021

I refer to instructions of 17 February 2016 for the valuation of infrastructure improvements located at the above property owned by the City of Canning for compensation purposes. The aggregated value of the subject improvements has been determined at $6,691,300 (Five Million Five Hundred and Ninety One Thousand Three Hundred Dollars) excluding GST, as at 30 June 2016 (date of inspection).

A brief report is attached, in addition to a schedule of individual infrastructure values. If you have any queries regarding this advice, please do not hesitate to contact me on 9273 9178. In accordance with standard practice, approval is required from the Valuer General to reproduce or publish any findings for commercial purposes. If any findings are to be included in a report, adequate sourcing of the information should be made.

STEPHEN FERN (AAPI) CERTIFIED PRACTISING VALUER VALUATION SERVICES

18 Mount Street, Perth, Western Australia 6000 Postal Address: P0 Box 7201, Cloisters Square, Western Australia 6850 Tel (08)9429 8400 Fax (08)9429 8500 Email: [email protected] Web www.landgate.wa.gov.au Western Australian Land Information Authoty ABN 86 574 793 858 AU D16/120997

Landgate Hedley Park infrastructure valuation

VALUATION REPORT

I VALUATION INSTRUCTIONS

Formal instructions dated 17 February 2016 received from Teorig Chuah of the Department of Lands to value infrastructure improvements at Hedley Park, Bentley owned by the City of Canning for compensation purposes.

2 DATE OF VALUATION

30 June 2016 (date of inspection).

3 PROPERTY ADDRESS

Crown Reserves 27065, 27540, 32095 and 35021 Nyamup Way, Bentley.

4 LOCATION

Hedley Park is located immediately north of Manning Highway, on the southern periphery of Bentley, approximately 10 kilometres southeast of the Perth CBD.

6 IMPROVEMENTS

Hedley Park is a community and recreation precinct, and accordingly, the subject improvements predominantly comprise buildings and facilities of that nature.

The main improvements at Hedley Park are the buildings, which are described as follows:

5.1 BENTLEY CoiuNrri CENTRE A large multi-functional building of brick and iron construction, built in the early 1990's. Includes youth activity areas, offices, multi-function rooms, a crèche area, rear hail with raised platform stage area, and amenities. Generally in good condition.

5.2 PENDANA MULTICULTURAL DAY CENTRE A large multi-functional building of brick and iron construction, built in the late 1990's. Includes living quarters, activity areas, large kitchen and dining rooms, and staff offices. Generally in good condition.

5.3 BENTLEY Scou-r HALL An older-style hall of brick and asbestos construction, built in the mid-1960's. Provides basic facilities. Generally in fair condition for its age.

54 CANNING L&wN TENNIS CLUBHOUSE An older-style building of brick and iron construction, built in the mid-late 1960's. Provides basic facilities. Has not been in use for some years and is generally in very poor condition, requiring substantial internal repairs.

5.5 HEDLEY PARK NETBALL CHANGEROOMS A fairly small building of brick and iron construction, built in 2 stages (late 1970's and early 1990's). Provides basic facilities. Has not been used in recent time and is generally in fair condition for its age.

5.6 HEDLEY PARK TOILET BLOCK A relatively modern building of brick and iron construction, built in the late 1990's. Generally in good condition. D16/120997

Landgate Hedley Park infrastructure valuation

5.7 BENTLEY LtBRARY

A large building of brick and iron construction, built in the 1980's. Includes an entrance lobby, open-plan library area, activities area, amenities, and staff offices. Generally in good condition.

Other significant infrastructure improvements comprise sports facilities (courts and lighting), parking, irrigation and drainage. Miscellaneous improvements include benches, bollards, bins, signage, and fixed play equipment.

6 VALUATION METHODOLOGY

The subject infrastructure improvements have been valued by the cost approach (depreciated replacement cost) as they constitute non-market assets.

The Australian Property Institute's guidance notes list the following 3 valuation methodologies for determining value:

• Sales Comparison Approach; • Income Capitalisation Approach; and • Cost Approach (Depreciated Replacement Cost).

The methodology for valuing specialised Government assets for financial reporting purposes (fair value) is detailed in Treasury Instruction 954 and Australian Accounting Standard AASB 116 and AASB 13.

Relevant condensed extracts are as follows:

Treasury Instruction 954 In the public sector, many assets have restrictions or limitations placed on their use and disposal. Parks, gardens, other reserves and speclailsed assets.. .fall into this category. Such assets are held by agencies for their value in use and accordingly, fair value is measured having regard to the current or existing use of the asset. Where no market evidence of an asset's value is available, the cost of replacing the asset's remaining future economic benefit, i.e. the depreciated replacement cost (current cost less, where applicable, accumulated depreciation) is the fair value of the asset.

AASB 116 S33. If there is no market-based evidence of fair value because of the specialised nature of the item of property... and the item is rarely sold, except as part of a continuing business, an entity may need to estimate fair value using an income or a depreciated replacement cost approach.

AASB 13 B8 The cost approach reflects the amount that would be required currently to replace the service capacity of an asset (often referred to as current replacement cost).

From the perspective of a market participant seller, the price that would be received for the asset is based on the cost to a market participant buyer to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence.

The subject values determined by applying the cost approach do not represent their value in the open market; rather they represent the remaining service potential to the entity in ownership. As stated in AASB 13, "the cost approach reflects the amount that would be required currently to replace the service capacity of an asset". D16/120997

Landgate Hedtey Park infrastructure valuation

7 VALUATION COMMENTS

As mentioned above, the subject improvements have been valued by the cost approach (depreciated replacement cost). This requires the estimation of the cost of replacing each infrastructure asset, which is then adjusted for obsolescence (ie depreciated) in order to reflect the remaining service potential to the entity or economic life of the asset.

Replacement Cost Estimates In determining an estimated replacement cost of each subject improvement, a site inspection was undertaken on 30 June 2016. In addition, the City of Canning provided information including building floor plans and replacement cost estimates.

Replacement costs have been referenced from estimates provided by the City of Canning and the Rawlinsons Australian Construction Handbook. Rawlinsons is a national company of Quantity Surveyors and Construction Cost Consultants.

In comparing my replacement cost estimates to that provided by the City of Canning, I agreed with most of the City's estimates. However, I consider the City's estimates for the Canning Lawn Tennis Clubhouse and Hedley Park Netball Changerooms buildings to be incorrect and excessively high.

The aggregated estimated replacement cost of the subject infrastructure improvements is $9,780,300.

Depreciation Depreciation of the replacement cost estimates has been calculated by the straight line approach by means of estimating the total service potential (ie total life) of each asset, in addition to estimating the remaining service potential of each asset as at the date of valuation.

In estimating remaining service potential, consideration has been given to the estimated age and condition of each asset based on the site inspection. In addition, Landgate's Map Viewer application provides access to aerial photography taken over a number of years, which assists in estimating the age of the larger assets.

As mentioned earlier, the Hedley Park buildings were generally in good condition, with the exception of the Canning Lawn Tennis Clubhouse which is in very poor condition internally.

8 FAIR VALUE ASSESSMENT

The aggregated value of the subject infrastructure improvements at Hedley Park owned by the City of Canning for compensation purposes has been determined at $5,591,300 (Five Million Five Hundred and Ninety One Thousand Three Hundred Dollars) excluding GST, as at 30 June 2016.

9 CONCLUSION

This report has been prepared for the private and confidential use of the client to whom it is addressed and should not be reproduced, either wholly or in part, or relied upon by third parties for any use, without the express authority of the Valuer General.

STEPHEN FERN (AAPI) CERTIFIED PRACTISING VALUER 7 July 2016 D16/120997

Hedley Park Infrastructure Improvements Valuation-3D June 2016

Ref Description 1 Description 2 Rplacenient Cost Adopted Value

1.1 Building Bentley Community Centre $ 2,256,700 $ 1,527,600

1.2 Fencing Bentley Community Centre - Fencing $ 2,500 $ 1,200

1.3 Ancillary Structures Bentley Community Centre - Gazebos & Shade $ 9,100 $ 7,500

1.4 Car Park Bentley Community Centre - Car Park $ 347,200 $ 185,200

2 Building Pendana - Multicultural Day Centre $ 1,598,400 $ 1,205,000 3.1 Building Bentley Scout Hall $ 235,400 $ 68,800

3.2 Fencing Bentley Scouts - Fencing $ 4,800 $ 2,300

4.1 Building Canning Lawn Tennis Club - Building $ 434,800 $ 71,100

4.2 Fencing Canning Tennis Club - Fencing $ 28,800 $ 13,700

4.3 Lighting Canning Tennis Club - Court Lighting $ 210,000 $ 126,000 4.4 Courts Hedley Park Tennis Court Concrete $ 200,000 $ 50,000

4.5 Courts Hedley Park Tennis Court Concrete $ 100,000 $ 40,000

4.6 Car Park CanningTennisClub - CarPark $ 65,100 $ 34,700 5.1 Building Hedley Park Netball Changerooms $ 247,500 $ 108,000

5.2 Courts Hedley Park Netball Court $ 336,000 $ 117,600

6 Building Hedley Park Toilet Block $ 144,000 $ 97,900

7.1 Building Bentley Library $ 1,792,200 $ 937,500

7.2 Car Park BentleyLibrary - CarPark $ 169,800 $ 52,800 10 Drainage Drainage $ 398,100 $ 238,900

11.1 Irrigation Artesian Bore $ 102,900 $ 61,700

11.2 Irrigation Flow Meter $ 2,800 $ 1,400

11.3 Irrigation Superficial Bore $ 15,000 $ 7,500

11.4 Irrigation Replace Controller*2 $ 40,000 $ 20,000

11.5 Irrigation Reticulation pipe network $ 103,600 $ 62,200

12 Misc Hedley Park Development Cost $ 846,900 $ 508,200

13.1 Misc Benches Hedley Park $ 14,400 $ 7,200

13.2 Misc Bollard - Perimeter $ 22,200 $ 11,100

13.3 Misc Bentley Community Centre - Playground $ 30,000 $ 15,000 13.4 Misc Bins $ 3,100 $ 1,600

13.5 Misc Drinking Fountain Hedley Park $ 2,500 $ 1,300

13.6 Misc Play Equipment Hedley Park $ 15,000 $ 7,500

13.7 Misc Signs Timber Routed (Park Name) $ 1,500 $ 800

Totals: $ 9,780,300 $ 5,591,300 ^I'^--^ ;:"CAOur Ref: PL. J2.2 Your Ref: 00437-2012; Matt Turnbull

5 December 2016

Director General Department of Land PO Box 11 43 WEST PERTH WA 6871

Dear Colin

Bentley Regeneration - Proposed Surrender of Management Orders

Further to your letter dated 17 August and our meeting on 3 October 2016 regarding the City's consideration of the compensation for surrendering the Management Orders for the four Reserves, (Nos: 27065, 27540, 32095 and 35021 ), I will outline the steps the City needs to undergo before it can formally consider this matter.

As discussed, the City is very keen to see the Bentley Regeneration project proceed, however there are a number of important matters that need to be resolved prior to Officers presenting a proposal to Council regarding surrendering the Management Orders.

As we discussed with you at the meeting, the offer that your Department has provided regarding the compensation for the assets on these reserves fall short of the funds needed to replace the community facilities and undertake works on the parks, streetscape and traffic improvements documented in the Local Structure Plan. These improvements were part of the overall commitment to the community regarding the reduction of open space and removal of community assets as the project is implemented. Further, they were a key part of the requirement established by the WAPC when they endorsed the Local Structure Plan.

The City is presently seeking an agreement between the Department of Housing and ourselves regarding how the remainder of the community assets will be replaced and funded. We have provided officers from Department of Housing (and Department of Lands) with a "model" of how that might be achieved. We are presently working to establish an agreement with the Department of Housing.

In terms of timing, assuming that a satisfactory agreement can be put in place, formal consideration of that agreement and consideration of surrendering the Management Orders would be formally presented to Council in early 2017.

We will keep your Officers informed of progress on these matters.

Yours sincerely

than asios (Arthur) Kyron Chief Executive Officer Ahaieca11 - 881vic^11r Don Cuminings - Department of Water 13/7 Albany Highway Canning ton (enter from George St West) Tel: 1300 422664 Email: customer@canning. wagov. au Please address correspondence try Locked Bag 80, We Ishpool WA 6986 Far (08) 94582353 WWWCanning. wagov. au

D17/136895

Hon Rita Saffioti MLAr Hon Peter Tinley AM MLA Minister for Transport; CApiratNG Minister for Housing; Planning; Lands 21 SEP oii Veterans Issues; Youth

Doc No. Mr Athanasios (Arthur) Kyron Chief Executive Officer City of Canning L27 Locked Bag 80 WELSHPOOL WA 6986

Dear Mr Kyron

Thank you for your letter following our respective meetings on 6 and 26 July 2017, regarding the Bentley Regeneration Project.

We are pleased to hear that following the meeting between the City of Canning and the Department of Communities - Housing on 15 August 2017, both parties agreed to a collaborative approach regarding the progression of the Bentley Regeneration Project.

We understand that agreement has been reached between the City and Department of Communities to progress discussions and resolve the following matters as a matter of urgency: 1. The City is to provide a full briefing and information (noting some aspects are commercial in confidence) regarding the future development of the aquatic centre site by Sunshine Developments WA Pty Ltd. 2. The development of a plan by both the City and the Department of Communities that addresses the timing and the manner in which the existing community facilities located on the Southern Reserve Lands can be managed for the benefit of the community following the surrender of the Management Orders and acquisition of the land by the Department of Communities. 3. Convene arrangements to ensure long term collaboration between the City and the Department of Communities to ensure delivery of the over-arching project vision, particularly with regard to the outcomes of the village centre core of the project.

We also acknowledge that the City has explored every potential avenue available to terminate its agreement with Sunshine Developments and have found that the financial, legal and reputational risks of such a termination are unacceptably high.

This being the case, and taking into account the agreement with the Department of Communities reached on the matters above, we are prepared to offer the City the compensation arrangements as previously outlined without the need for the former aquatic centre site to be made available to the Department of Communities.

Level 9, Dumas House, 2 Havelock Street WEST PERTH WA 6005 Telephone: +61 8 6552 5500 Facsimile: +61 8 6552 5501 Email: minister.saffloti(dDc.wa.gov.au Level 7, Dumas House, 2 Havelock Street WEST PERTH WA 6005 Telephone: +61 8 6552 5300 Facsimile: +61 8 6552 5301 Email: minister.tinleydøc.wa.gov.au D17/136895

For the avoidance of doubt, the Government's position on the Southern Reserve Lands is as follows:

1. The Government requires the City to surrender the Management Orders over the Southern Reserve Lands and in return the City will receive compensation of $5,591,300 under Section 50 of the Land Administration Act 1997 and as determined by a valuation undertaken by the Valuer Generals Office. 2. The Government is prepared to pay an additional $4 million over the life of the project in the form of developer contributions for the upgrading of parks, infrastructure and community facilities within and surrounding the precinct.

Given the recent agreement outlined above, the Government would expect that the City would facilitate that the rescinding of the management orders take place as a matter of priority. Should this occur, the Government will also consent to the Department of Communities demolishing Brownlie Towers.

With regard to previous discussions regarding the acquisition of the Southern Reserve Lands, the Department of Communities has advised that initial support of the City's acquisition of the Southern Reserve Lands was predicated on the successful management and initiation of the project in accordance with the Heads of Agreement in place at the time. The Heads of Agreement ceased to exist as of March 2014 and as such the commercial and delivery arrangements for the Project have significantly altered. As a result, the Government no longer supports the City's acquisition of the Southern Reserve Lands.

It should be acknowledged that the Housing Authority contributed $850,000 to the relocation of the Canning Tennis Club and that $3-5 million of annual rating revenue will flow to the City in perpetuity by virtue of the Department of Communities' future development of the land.

We are confident that we can come to a mutually beneficial outcome to facilitate the City surrendering its Management Orders over the Southern Reserve Lands and look forward to receiving written agreement to the above terms. We have also requested regular briefings from the Department of Communities and the Department of Planning, Lands and Heritage in regards to the progression of these matters.

Should you have any further queries, please contact Mr Simon Moore, Director Complex Projects at the Department of Communities on 9222 4923 or by email Simon.Moore(ãhousinq.wa.qov.au.

You

HON RITA SAFFIOTI MLA HON PETE'1]NLEM MLA MINISTER FOR TRANSPORT; MINISTER FOR HO(121NG; PLANNING; LANDS VETERANS ISSUES; YOUTH 14 SEP 2017 D17/110601 -a —

Hon Peter Tinley AM MLA Minister for Housing; Veterans Issues; Youth

Min Ref: 73-01518

Mr Athanasios (Arthur) Kyron Chief Executive Officer City of Canning Locked Bag 80 WELSHPOOL WA 6986

Dear Mr Kyron

BENTLEY REGENERATION PROJECT

I note your correspondence received by my office on 27 July 2017. As discussed in your recent meeting with Minister Saffioti, we shall prepare a joint response to your correspondence regarding the Bentley Regeneration Project.

However, I felt it necessary to respond to you directly to ensure that there has been no misunderstanding.

In your correspondence you assert that I offered that the State Government would provide compensation for the City if it surrendered its Southern Reserve Land management orders. You assert the compensation to be a figure of $5,591,300, which is the Valuer General's assessment of the value of the infrastructure on the land under the management order.

You also assert that the State Government would pay the City and additional $6,000,000 at a later date.

This is incorrect. During our meeting I offered that the State Government would pay an additional $4,000,000 to the City over the life of the development, as long as agreed hurdles were met.

I am confident that this was just a misunderstanding and look forward to the City correcting the record.

As outlined above, I will work with Minister Saffioti to prepare a more detailed response to your correspondence regarding the Bentley Regeneration Project.

Yours sincerely I CANNING 03 AUG 2

I Doc No. HON PERNLEYA WM LY I MINISTER F1ÔR HOUSIF1J 31 JUL 2017 RI cc. Hon Rita Saffioti MLA, Minister for Planning Grahame Searle Director General, Department of Communities L

Level 7, Dumas House, 2 Havelock Street, WEST PERTH WA 6005 Telephone: +61 8 6552 5300 Facsimile: +61 8 6552 5301 Email: [email protected]