On 25th July 2018, the Aircraft Owners and Pilots Association of Australia on behalf of general aviation leaseholders at Bathurst Airport (NSW) met with council seeking to resolve deadlocked lease-renewal negotiations, which were in limbo for over six years. Leaseholders were unable to exercise their renewal options, with council demanding an increase in valuation from approx. $5 to $12 per square metre, representing an increase of 250%.
For over 6 years leaseholders had attempted to revolve the renewals with council seeking to activate a clause for the appointment of an independent valuer to establish the lease rates, with both Council and the leaseholders to accept the valuation outcomes. Council continually refused and forced leaseholders to accept an interim rate between $9 and $12 per square metre, until such time that the lease disputes were resolved – or vacate.
At the request of leaseholders and following a range of public media engagements highlighting the issue and difficulties, AOPA Australia met with the council and invited their participation to resolve renewals as a priority. It was proposed that council accept a leasehold rate of approx. $7 per square, with leaseholders agreeing to indemnify the council against any legal action to recover the six years of interim rents paid above fair market value.
Whilst a commitment was given at the meeting by council to resolve the outstanding renewals quickly, several months later they rolled-back on those assurances, steadfast in the view that the airport land was valued between $12-13 per square metre and that both AOPA Australia and the leaseholders assessment of the values were incorrect.
In the month following the roll back and through further meetings, an agreement was reached for the leaseholders to share the costs associated with obtaining an independent valuation on the most outstanding lease renewal, with council and the leaseholders agreeing to accept the independent valuation and for it to be adopted for all outstanding renewals.
A month later, the independent valuation was published, clearly stating a value of just $5 per square. This valuation was supported by a range of views and statements which communicated that airport land did not hold the same value as ordinary commercial or industrial land, given the strict limitations on its use, access and security.
Council immediately criticised the independent valuation report and rejected its justifications, initially signalling to the leaseholders that it would not accept the result. However, bound by law the council some weeks later conceded and accepted the valuation, but refused to apply it across all outstanding lease renewals as previously agreed, forcing each leaseholder to obtain their own valuation report – exposing each to unnecessary costs and delays.
A month later the second independent valuation report was published, stating a value of $6 per square metre, with clear justifications for the value. Council once again expressed its rejection of the valuation, but in the weeks following were bound by law to accept it.
And, again just two months later a third independent valuation report was published, stating a value of just $6 per square.
Ground hog day? It’s hard to argue it’s not.
Over a year has passed since AOPA Australia first met with the Bathurst Regional Council on behalf of leaseholders, and here we are in August of 2019 with our community still fighting to resolve basic lease renewals, that should have taken mere weeks to resolve, not six years!
Just think about that for a moment. For six long years the leaseholder community have written numerous letters calling for assistance from council management, councillors, media, and Members of Parliament – all without result. It’s scandalous.
AOPA Australia member and Bathurst Airport leaseholder, Mr Graeme Burke; “the council has dealt with our aviation community with contempt and has shown zero interest in acting in a fair and reasonable manner.
“All up, leaseholders have been exposed to over six years of unnecessary stress and expense, all driven by council’s determination to extract unreasonably high rents, demonstrating a lack of commercial understanding.
“Since this dispute started over six years ago, over 18 aircraft have packed up and left Bathurst and are no longer contributing to our local aviation business economy. The situation is costing the airport community.
“Our council is driving aircraft owners and businesses away, when it should be focussed on incentivising investment and development.” he said.
In the coming weeks, AOPA Australia and the Bathurst Airport leaseholders will again meet with council, seeking to resolve the remaining lease renewals without the need for further independent valuations. Hopefully common-sense will prevail so this sorry saga can be brought to a close.
More on this as it develops.