Seismic council shift in South Gippsland building portfolio approach

DESPITE the objections of some councillors that South Gippsland Shire Council should not be in the business of arranging commercial tenants for its buildings, focusing instead on downsizing its bloated asset portfolio, council chief executive Allison Jones has now been called on to seek a possible commercial tenant for council-owned premises in Foster.

With a vote on whether to support pursuing a lease arrangement for the land concerned split four-all in the absence of Cr Bron Beach, Mayor Nathan Hersey used his casting vote in favour of that course.

While councillors at Wednesday’s council meeting were originally asked to vote on a recommendation to sell the land at 4-6 Power Street and part of 5 Simpson Street Foster, Cr Scott Rae put forward an alternate motion.

That motion recommended that council authorise chief executive Jones to begin the process of seeking a possible commercial tenant for the premises, with a report to be provided to council no later than the April 2026 council meeting on the progress of that process.

Furthermore, the motion specified the report to council should consider the options for any commercial tenant, costs involved and financial benefits, including potential income over the life of a commercial lease, as well as any immediate and long-term Budget implications to maintain the building to a standard fit
for lease.

“Long-term, an asset that grows in value and returns an income might be a wonderful thing for the Shire,” Cr Rae said in explaining his leasing suggestion, that sentiment backed by Cr John Kennedy who considers leasing arrangements should also be explored for some other council-owned properties.

While some councillors, including the mayor, argued that supporting Cr Rae’s motion will result only in a report at this stage and is not a commitment to a lease arrangement, Cr Sarah Gilligan questioned that assertion.

“This says, ‘Authorise the chief executive to begin the process of seeking a possible commercial tenant’; that’s about finding people,” she said, stressing “that’s well beyond finding out if it’s going to be viable, so for me this motion doesn’t make sense.”

Cr Hersey responded that council officers provided the options of looking at the sale or lease of the relevant land.

Cr Gilligan declared that the leasing idea flies in the face of the Sustainable Building and Asset Management Plan on which council is embarking having long argued its asset profile of more than 400 buildings is unsustainable.

Crs Kennedy, Rae, Brad Snell and Hersey voted in favour of Cr Rae’s alternate motion, with Crs Clare Williams, Gilligan, Steve Finlay and John Schelling
taking the opposite view that council should set the wheels in motion to sell the Foster land.

Noting the Foster building concerned has been sitting idle for a number of years, Cr Schelling remarked he believes council has previously unsuccessfully pursued a lessee, being unequivocal about what needs to happen now.

“It’s time we start making the big decisions and this building’s surplus to our needs,” he said, stressing council can’t continue to hang onto all the properties it owns and try to make something of them, and arguing that entering the field of commercial leasing would simply add further stress to already busy council staff.

“Let’s put this on the market right now,” Cr Schelling said, Cr Finlay backing that call and noting money would need to be spent to bring the building up to standard before it can be leased, chief executive Jones highlighting the fact it is yet to be determined what expense council would need to undertake to achieve that.

Cr Williams argued strongly that commercial leasing arrangements are best left to the private sector and that during public consultation no community members have expressed the view council should get involved in that area.

Before using his casting vote, Cr Hersey expressed the view that selling assets does nothing for council’s long-term financial position, instead providing short-term sugar hits.

“I think this is in line with our longer term sustainability goals,” he said of the lease option.