Legislation has changed regarding how we engage our community on leases. Under the Local Government Act 2020, Section 115, Council will undertake a community engagement process on a proposed lease of Council-owned land for a period of 10 or more years, in accordance with its Community and Stakeholder Engagement Policy 2021.

This requirement replaces the formal Section 223 process required under the Local Government Act 1989 and is designed to strengthen community involvement in decision-making, and trust and confidence in Council to make evidence-based decisions that benefit the Bayside community through the consistent application of a transparent process.

The proposed rent has been set in accordance with the Council’s Lease and Licence Policy 2018 following an open Expression of Interest process.

Same Pty Ltd is classified as a Group One Commercial Tenant. The fit out includes a proposed $450k to $500k capital contribution made by Same Pty Ltd.

Below is a summary of the terms of the proposed Lease that have been provided by Same Pty Ltd:
Term: 15 years
Options for a further term: 6 years
Commencing Annual Rent: $80,000 per annum, plus GST
Annual Turnover Rent: 7.5% of turnover in excess of $1,000,000
Total anticipated annual rent: $140,000 per annum.
Rental Escalation: Fixed 5% of the rent payable in the prior year.

Following the completion of a two-stage Expressions of Interest (EOI) process, 49 enquiries and 15 applications were received. Three applicants progressed through to the second stage with Same Pty Ltd being selected following an assessment against the key selection criteria and final interview.

The two phases of the process considered criteria including the financial return to Council, quality of the proposed fit out, the level of experience of the applicants and the proposed plan to activate the site.

Officers found through the assessment of all submissions that Same Pty Ltd’s proposal best met the published criteria and should be presented to Council for consideration of the grant of a lease.

The hospitality experience of Same Pty Ltd includes 17 years of successfully owning and operating the popular beachside café in Brighton, North Point Café. The co-owner of the business also has approximately 40 years owning and operating a number of hospitality businesses.

The proposed operator plans to offer a wide range of dine-in or takeaway food from the café including, but not limited to: traditional fish and chips, pressed sandwiches, healthy bowls, salads, a variety of different grilled and fried seafood, tacos, burgers and more. The beverages will include fresh juices, smoothies, milkshakes, and coffees as well as dessert offerings such as ice creams, pastries, and slices.

Same Pty Ltd propose to operate seven days a week with the only day of closure being Christmas Day. The maximum hours of operation permitted are 7am until 10pm. The minimum hours are 8am until 4pm, dependent on weather.

The lease proposal does not include a liquor license. Same Pty Ltd may decide to apply for a liquor licence in the future, however their submission was not based upon obtaining a liquor licence.

The proposed tenant has committed to a lease which includes significant sustainability requirements. This includes developing an annual Environmental Management Plan.

Same Pty Ltd has committed to a range of environmental initiatives such as removing single use plastics, aiming to use compostable packaging where financially feasible; composting food waste and recycling through the implementation of glass, cardboard, food and general waste bins within the venue; selling and encouraging the use of keep cups; and the installation of energy efficient appliances and, more generally, reducing power usage where practicable.

The café does not have a gas supply for cooking to reduce environmental impact.

As well as this, the tenant will work with Council to explore further sustainability options as part of the Environment Management Plan.

If Council does not approve the proposed lease, it will need to reconsider the applicants from stage 2 of the Expression of Interest process or alternative uses of this element of the Pavilion.