Smack Down in Freo

smack down

Reading the Herald letters to day I saw one called, ‘Don’t Be Distracted” click on the link to read it.

It’s a letter by a guy called Martin who dared question the Fremantle city’s council’s business plan, on Kings Sq and for his questions, he didn’t get any answers of course, just a low personal attack on his person.

So to make it easy to read I will put all 3 pieces from the Herald here in sequence 2x Thinking Allowed and one letter.

You think the council being so confident of their Kings Sq plans would easily answers Martins questions and even thank him for clarifying the cities position. Well you would be wrong he got no answers and instead the city has tried to smack down him personally, instead of answering his questions, which we now find he has been asking for going on 7 months with NO ANSWERS.

Have a read for yourself and see Martins questions, see if you think the city has answered his questions or whether they just attacked him personally to distract attention from the real issues.

Possibly another reason why we hear the city and the mayor Brad Pettitt has been referred to as a spin machine, preferring to generate rhetoric instead of facts or answers to a concerned resident and rate payers legitimate questions.

They have even stooped to the level of publishing a letter they sent to Martin Lee in response to his question but never published his questions, how dismissive.


MARTIN LEE has been a Fremantle ratepayer for 15 years, and loves the Freo inner-city lifestyle and windsurfing at South Beach. Martin works as a commercial advisor consulting to the energy sector, with more than 20 years’ experience, and has degrees in civil engineering and economics.

LAST October, while looking into Fremantle council’s proposed parking policy, I stumbled across its Kings Square business plan and looked into what provisions it was making for parking in the new  development.

I quickly became distracted by a business plan full of flowery words and nice pictures, but very little substance or proper detail. While I am fully supportive of improving council facilities and redeveloping this area, this plan simply does not add up.

The project involves spending $45 million of ratepayers’ funds to effectively replace the existing library, council chambers and administration offices. The council generates $800,000 in additional revenue per year from leasing new retail spaces and some office space. The business plan states this project provides the city a healthy 6.15 per cent rate of return and a positive $4.15m NPV. Fantastic!


No! This is clearly nonsense. It would take 50 years just to recover the initial investment from the revenue generated. These figures defy logic.

I have discreetly asked the council on many occasions to clarify how it calculated its rate of return and NPV for this project. Despite several months of corresponding with officers and councillors they simply refused to properly answer to a single question put to them, although I have received enough material to write a whole new series of “Yes, Prime Minister”. The council has stated the matter is now closed.

Why the refusal to answer such a simple question? And why were lawyers so heavily involved in preparing the city’s official, yet evasive, response? Why were the pertinent financial consultants’ reports presented at a council meeting that was not advertised, had no agenda, and was held in secret? Why are these documents still confidential?

Since the council simply refuses to answer my questions, I put the challenge out to my fellow ratepayers to see if they can grasp the maths behind this project.

Here are just a few things you may want to consider:

• using a discounted cash flow model with the project’s business plan assumptions, a NPV close to minus $30m is generated, compared with the positive $4.15m NPV stated in the business plan. It reduces community wealth by $30m, not increases it by $4.15m.

• this business plan states this project can only support debt of $8.8m—a dead giveaway that something does not stack up.

• the project requires the sale of $30m of council’s income-generating properties to fund it, plus a further $6.38m from its investment reserve.

The Kings Square business plan is readily available on the city’s website. You will note it is so poorly constructed it doesn’t even discuss the need for these new facilities, nor what alternatives were considered. It also provides nothing to support its sweeping statement the project will be a “catalyst for economic development”.

The council’s investment policy SG14 deals with acquisition and divestment of properties and other non-current assets. Its guidelines seek to ensure the city’s existing investment base is not eroded. It requires proceeds from the sale of property to be deposited in the investment reserve, and that commercial rates of return are to be achieved when funds from its investment reserve are invested.

SG14 investment guidelines can be over-ruled by a unanimous vote of council. This occurred in 2012 when it voted to raid $12m, allocating it to projects usually funded by the city’s cashflows. It happened again in late 2012 when the council voted to sell $30m of council property to fund the Kings Square project, and again in early 2013 when it realised the project was still $6.38m short. A similar pattern emerges through the council’s own long-term financial plan 2015–2025.

The long-term plan even provides for the council to invest $15m to build a new 400-bay car park in 2018, despite the Kings Square business plan recommending to sell the 843-bay Queensgate car park to Sirona for $16 million. Where can I buy Sirona shares?

Given the mass sell-off of City of Fremantle investment properties now underway, and the questionable redirection of these funds, it is obvious this council’s agenda does not involve protecting the city’s long-term investment base. The city advised me the investment committee contemplated in the SG14 guidelines “has not seen the need to meet” since April 2008.

When the council starts using the investment reserve in this manner on a regular basis, ratepayers have a right to be concerned, and a right to expect proper answers from our council. Our current council clearly disagrees with this.


The City of Fremantle has recently boasted it is financially robust because of its strong cash position. What would this cash position have looked like if it hadn’t been selling assets built up by previous generations, and hadn’t raided the investment reserve?

And, back to parking…well the business plan makes for an interesting read, as not only will there be no parking provided, but it emerges a considerable proportion of the Queensgate carpark is currently allocated to council staff for free parking. When the council sells this income-generating asset to Sirona to fund its project, it will lease these spaces back from Sirona to continue to provide free parking to staff. I am sure inner-city residents who are most affected by the proposed parking policy will be delighted to know more than 200 car parking spaces are provided free of charge to council staff. The council’s hypocrisy here is breathtaking!

This letter is not about Kings Square, it is about the poor quality of governance, lack of transparency, and lack of accountability at our council. The Kings Square project is just the tip of the iceberg. Do your own digging and form your own opinion. Is this what we voted for?


FREMANTLE mayor BRAD PETTITT and council CEO GRAEME MACKENZIE co-author a response to last week’s THINKING ALLOWED by Martin Lee.

IN last week’s Herald the Kings Square redevelopment was subject to some renewed scrutiny as a result of local resident Martin Lee (who also wrote the Thinking Allowed) contacting Peter Tinley’s office.

We welcome this scrutiny as this is a very big investment the City of Fremantle is making on behalf of you, the ratepayers, but we also need to make sure you’re getting the full story.

Let us say first up and without reservation—we are very confident this project will bring massive benefits to Fremantle. The numbers have been scrutinised not only by council and city staff but also by independent experts who all agree this is a worthwhile investment the city is making.

More than just bricks and mortar or dollars and cents

So why was Mr Lee criticising the business plan? At the heart of his criticism is a different perspective of the role of a local government.

Mr Lee has looked at the Kings Square project in isolation, running the numbers through his models which spat out figures he believes don’t add up.

What Mr Lee hasn’t done is put a value on the broader flow-on effects of the Kings Square project as being a catalyst for further redevelopment and investment in Freo, as well as the raft of social benefits that come with more people working and shopping in Fremantle.

Mr Lee has not looked at how the project will double the size of the community library, or bring with it a new Fremantle visitor centre and new public toilets with much-needed baby change facilities. He has not put a value on the new public spaces in Kings Square for people to enjoy, the value to the local economy of 1000 new office workers, nor has he put a value on the pride we’ll all have in our new city centre.

‘this project will bring massive benefits to Fremantle’

Mr Lee would like the Fremantle council to behave in a manner similar to that of a landlord or developer and look at the Kings Square project purely as an economic investment. But the Kings Square project is much more than an economic investment—it’s an investment in the very future of Fremantle and is arguably the most important project of our generation.

You can imagine someone with a similar mindset to Mr Lee in 1885 making exactly the same case as to why the council of the time shouldn’t build the town hall when “that shed down the road” is just fine.

How did this opportunity come about?

With the departure of Myer, a once-in-a-generation opportunity arose for a coordinated redevelopment of the very tired-looking Fremantle city centre.

Part of this was a chance to provide office space for a major government department to be located in Fremantle. With around 1000 office workers in the heart of Fremantle we saw this as a great kick-start to helping revitalise Fremantle’s struggling retail sector as well as providing much-improved community facilities and a town square we can all be proud of.

The project, to be fully integrated, required a partnership with Sirona Capital which owns the Myer building. The business plan for this proposal was publicly advertised and heavily debated by council and the community in 2012.

Put simply, it involved the city selling the Queensgate carpark and out-of-date cinema building (at a public and independently verifiable valuation) and reinvesting those funds in a new library and civic centre (designed by the winner of Fremantle’s first international architectural competition – Kerry Hill) and town square. Sirona’s commitment is to renew these buildings within an agreed timeframe, with the approved plans providing around 30,000sqm of quality office space and 12,000sqm of retail space.

Frustrating delays

This project has a total value now nearing $250 million and a project of this size takes time to materialise. Getting started requires a formal commitment from a tenant to occupy a significant amount of the commercial space that will be created by this development.

Our joint efforts to date have been focussed on getting that commitment from the state government which announced in 2012 that the Department of Housing would be relocated to Fremantle.

Negotiations with the state have been slow and at times frustrating. I know some people are pessimistic about the project proceeding, but we are expecting an announcement in the coming months which, if positive, will kick this project along.

Fremantle council – driver or passenger?

Local governments aren’t just about roads, rates and rubbish nor should they behave purely like profit-making corporations. Yes, the Fremantle council must always behave cautiously and responsibly with ratepayer funds, but our role is also to make decisions to ensure Fremantle realises its potential as Perth’s second city.

At the very core of this debate is whether you believe the council should be a passenger or in the driver’s seat in Fremantle’s economic recovery.

This is a crucial time for Fremantle‘s future so I have no doubt this is the right time for this investment. But don’t take our word for it—check out the project and the business case for yourself at

Don’t be distracted

HOW predictable! The City of Fremantle lynch mob strikes again (Herald Thinking Allowed, April 4, 2015).
CEO Graeme Mackenzie and mayor Brad Pettitt have publicly vilified me simply in order to distract attention away from the questions they desperately want to avoid.
The question residents should be starting to ask is “what is it that the mayor and CEO are so desperate to conceal from the public?”.
It must be pretty serious for them to mount such an extraordinary attack on my character. My current questions are just the tip of the iceberg!
At no point in my Thinking Allowed article the week before, nor in any correspondences with the council have I criticised the proposed Kings Square design, the need for new facilities, or the city’s vision for the future.
I challenge Mackenzie and Pettitt to demonstrate otherwise.
My perspective, vision, mindset, point of view, and so on, has never been expressed in public or private regarding whether the Kings Square development should proceed. The mayor, CEO and councillors have never met me or spoken with me, and frankly do not know anything about me. I have done this intentionally because I knew they would eventually resort to “playing the man”.
The Thinking Allowed article from the mayor and CEO have criticised me for a perspective I have never held or expressed. They fabricated a position for me and then attacked me for holding it. Priceless!
They have also credited me with contacting the office of Peter Tinley MP, which they know is incorrect. It’s a great outcome that Tinley’s questions have been put to state parliament, but the Fremantle Residents and Ratepayers Association (FRRA) has worked tirelessly to achieve that outcome, and deserves the credit.
It looks like the Herald has had a good rummage through the city’s accounts, which resulted in last week’s excellent article “Samson Rec to pay for new HQ”. It’s definitely worth a read.
Martin Lee


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One comment

  1. Nicolas Gurr says:

    The ongoing arrogance of the Mayor & CEO are breathtaking. Where else within the Local Government cadre, would senior management be able to get away with such character denigration and oppositional sh_t-slinging towards a ratepayer, without being taken severely to task!!!
    Sincere thanks to Martin for his valiant endeavors to make these misguided bureaucratic dreamers accountable.

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