A portion of revenue generated by the proposed investment of The Quarter will be used to offset rates following a decision by Council to proceed with the purchase of the property.
The City of Karratha will now enter negotiations with LandCorp for the purchase of The Quarter.
If the purchase is successful, Council will direct anything greater than what it currently earns in its term deposits, plus one per cent, to a specific Rate Management Fund to be used for the following year’s rating purposes.
City of Karratha Mayor Peter Long said while Council was in a strong financial position The Quarter investment had the potential to produce greater returns for ratepayers, reducing its reliance on rates.
“Council is in a strong financial position primarily due to putting money aside during the construction boom. While these resources are planned to be used in the future for major upgrades of infrastructure, Council is seeking to generate the best rate of return so that the whole community can get better quality services and facilities without costing ratepayers more,” Cr Long said.
“The Quarter investment has the capacity to generate higher financial returns compared to the bank term deposit rates, which are currently averaging 2.6 per cent. This would provide a sustainable long-term revenue source for Council and reduce its reliance on generating income from rates.”
The Quarter which has become a popular retail and commercial precinct in Karratha is currently leased at 40 per cent occupancy rate with negotiations well advanced for further key tenants.
The State Government has a 15-year lease for more than 30 per cent of the property.
“Even at the current occupancy rates the return on investment is likely to be more than what is currently being generated from Council’s cash investments.”