What is a Business Plan?

    A Business Plan is a written document that describes a business proposal which in this case is the proposed disposal by way of a lease of the Coogee Beach Caravan Park.  The advertising of the Business Plan is to:

    (a) Provide the opportunity for the public to make submissions regarding the Business Plan and the proposed acquisition of this property; and 

    (b) Satisfy the requirements of Section 3.59 of the Local Government Act 1995

    Why is the City required to produce a Business Plan?

    Section 3.59 of the Local Government Act 1995 details the process governing ‘commercial enterprises’ by local governments, including ‘Major Land Transactions’. A ‘Major Land Transaction’ means the acquisition, disposal (sell, lease or otherwise dispose of, whether absolutely or not) or development of land that is not exempt under the Act, and where the total value of:

    (a) The consideration under the transaction; and 

    (b) Anything done by the local government for achieving the purpose of the transaction; 

    is more or is worth more than either $10m or 10% of the operating expenditure incurred by the local government from its municipal fund in the last completed financial year. 

    What is in this Business Plan?

    In accordance with Section 3.59 before a local government enters into a major land transaction the local government is required to prepare a Business Plan. The Business Plan is to include an overall assessment of the major land transaction and is to include details of: 

    (a) Its expected effect on the provision of facilities and services by the local government; 

    (b) Its expected effect on other persons providing facilities and services in the district; 

    (c) Its expected financial effect on the local government; 

    (d) Its expected effect on matters referred to in the local government’s current plan prepared under Section 5.56;

    (e) The ability of the local government to manage the undertaking or the performance of the transaction; and 

    (f) Any other matter prescribed for the purposes of this subsection. 

    What is the background on the land (and what can and can’t happen there)?

    1. The Coogee Beach Caravan Park is located on a Crown Reserve controlled by the State Government. It is not freehold land. The State has given the City a Management Order (MO) over the land. The MO creates the framework with how the City can use and administer the land.
    2. The current MO grants the City the power to lease the site for the purposes of a caravan park.
    3. A caravan park is defined as an area of land contained for the parking of caravans or the erection of camps. Caravans are further defined as a vehicle designed, or fitted, or being capable of use, as habitation or for dwelling or sleeping purposes. The key component is that a caravan is designated as a vehicle (i.e. which has wheels and is moveable).
    4. Long-stay parks, such as residential parks, park home parks, lifestyle villages or a mix of these park types are not considered caravan parks and are not permitted under the MO (Note: this is not a discretion Council has the power to over-ride). It must be noted that while people have resided in the Park for many years, these have always only been periodic short term arrangements, not long term agreements.
    5. The State however recognises that caravan parks may provide a range of accommodation products to meet visitor demand such as powered and unpowered camp sites, minimal service recreational vehicle sites, on-site vans, cabins, chalets and eco/safari tents. Caravan parks can also provide permanent structures such as caretaker’s dwelling/manager’s residence, shop/office, café, games/recreation room, ablution facilities, camp kitchen and camp laundry.

    What is the arrangement with the caravan park?

    1. The Coogee Beach Caravan Park (the Park) is currently leased to Colorado Parks Land Co Pty Ltd which is a subsidiary of the Discovery Holiday Parks (Pty) Ltd (DP). The current lease commenced on 1 July 2002 and the first term expired on 30 June 2012. There were two options available to the lessee of five years each, both of which have been exercised and the final expiry date will be 30 June 2022. DP, following discussions with the City, agreed to a process whereby the City could initiate a new lease over the site ahead of the expiry of the current lease.
    2. It should be noted that the provisions of the current lease allow DP to sublease portions of the Park on both a short-stay and long-stay basis. The City has no legal right to interfere with the operations of these sub-leases. This also means that any sub-leases may not be longer than the current period of the head-lease.
    3. Current long-stay lessees have a periodic site only agreement with DP. As such they only own the structure and sub-lease the site upon which the structure sits. The structures are all required to be transportable (i.e. physically able to be moved) in accordance with the definition of a caravan. Permanent type fixed structures, which some of these structures appear to be now, are not permitted.

    What is the proposal and future of the caravan park?

    1. The current lease expires in June 2022. With this deadline in mind, in 2018 the Council commenced a process for the future arrangements and tenure of the controlled land.
    2. A Request for Proposal for the Park was publicly advertised on 15 September 2018 by the City seeking an open public expression from caravan park operators.
    3. DP was advised on 15 May 2019 that its proposal was preferred, subject to the management order being amended to allow for a 42 year lease and the satisfactory public advertising of a Business Case, in accordance with s3.59 of the Local Government Act 1995.
    4. The basis of the DP proposal is the assumption that this area will be developed as a strategic tourist destination and caravan park, consistent with the City’s tourism and economic objectives.  
    5. The Business Case is required to be prepared and adopted by Council as it has been determined that the new lease constitutes a major land transaction under the Act. In late 2019 the Department of Planning, Land and Heritage (DPLH) required the City to prepare a Foreshore Management Plan that took into consideration longer term coastal inundation and erosion, based on current projected sea level rise estimates.
    6. The Coogee Beach Foreshore Management Plan was adopted by Council in November 2020. In December 2020 the Minister advised that he was prepared to endorse a revised MO for a period of 42 years, subject to a 10 yearly coastal hazard risk assessment being undertaken and that any structures/infrastructure be relocated should it fall within a revised coastal setback.
    7. The advertising of the Business Case will be commencing the second of week of February, following that Council will be able to consider the proposal and consider any submissions made.
    8. The future redevelopment of the Park will be required to also follow the guidance provided by the Western Australian Planning Commission within the Caravan Parks Planning Bulletin including meeting the objective of ensuring the development and long term retention of caravan parks as a form of short-stay (affordable) accommodation primarily for leisure tourists and where there is any long-stay accommodation, this should complement the short-stay sites with priority given to locating short-stay accommodation on those areas of the site providing the highest tourism amenity.
    9. DP will be required to invest $9.5 million into the Park on upgrades over the first five years of the Lease.
    10. The Management Order includes provisions that the City must allocate and use the income received from the lease of the caravan park on the reserve or other surrounding reserves in the area. This is reiterated in the draft Business Plan, which states that the income received from the lease will be quarantined to undertake the works recommended by the Coogee Beach Foreshore Management Plan in the future.    

    What about the current sub-lessees?

    1. A number of the long-stay lessees have approached DP with requests to sell/reassign their sub-leases to a third party. DP has responded by advising that they are not able to issue any sub-lease beyond June 2022 and that they would not be entering into any new leases at this time. DP has the right to refuse the sale/reassignment of any sub-lease. DP has advised that until they have a degree of certainty from the City that it will have a new long term lease over the Park, that it is unable to provide any details on its plans for redevelopment of the Park. The City acknowledges that the lack of information from DP on the intended redevelopment has caused a degree of anxiety and stress amongst the lessees. The final version of the HOA, which would provide that certainty, is currently with DP for their agreement.
    2. The CEO of DP has recently made a commitment to the lessees that DP will arrange a meeting with them, at which he would attend. Elected Members will also receive a briefing. This will happen very soon.
    3. In recent correspondence to residents DP has advised that it has earmarked the land on the western beach front of the Park for redevelopment. This will potentially impact on approximately 35 long-stay lessees. DP has indicated that where possible it will work with these lessees to find alternative accommodation within the DP network although it acknowledges that such an outcome is not guaranteed. It should be clearly noted that DP’s correspondence does not state anywhere that any lease will be terminated, rather the earliest that any formal notices regarding any potential relocation would be in 2022. DP also clearly states its intention to engage with current residents to find alternative options should their current sites be needed for any future relocation.
    4. Recent social media commentary has implied that residents have been given notice to vacate by early next year – this is incorrect and misleading – and has been a source of confusion and angst amongst residents and the public.

    What happens next?

    1.  Meetings with lessees and Elected Members will occur.       
    2.  The City will provide publicly available information to residents advising them of the lease and tenure processes, what the facts are and what the City and Council can and can’t do. 
    3. Following the six week advertising period for public comment Council will consider the proposal and any submissions made.  A determination on the future of the caravan park in what Council deems the best interests of the local government as a whole and consistent with its obligations under the management order for the land and the permissible uses under the relevant legislation. 
    4. Following a meeting between residents and representatives of Discovery Parks on 18 February 2021, Discovery Parks has agreed to individual one-on-one meetings with all potentially impacted residents to determine their respective needs, abilities and expectations in relation to their individual sites. It should be noted that under commercial law the City is not permitted to talk directly to lessees about provisions contained within their sub leases or provide any commitments to individual lessees.
          

    I have more queries about the Business Plan, who can I contact?

    For queries on the Business Plan to enter into a Major Land Transaction - Coogee Beach Caravan Park Reserve 29678 (3 Powell Road, Coogee) please contact the City of Cockburn Strategic Planning Services on 08 9411 3444 or landadmin@cockburn.wa.gov.au.