A WATTLE Range Council-owned service station could fetch as much as $1m on the open market, according to councillor John Drew.
The freehold of the Adelaide Road premises has been owned by local government since 1958 and Cr Drew gave his personal estimate of its worth when its future was discussed at the February monthly council meeting in Millicent.
In addition to the suggested seven-figure sum, Cr Drew said the service station brought in $116,000 each year to the council in lease fees.
The service station was the subject of a six-page staff report as well as 30 minutes of debate involving staff and councillors.
The current 20-year lease expires in 2021 and council has recently received an unsolicited offer from a Mount Gambier company to buy the freehold.
The staff report summarised the commercial dealings between local government and various lease-holders since 1958.
There was also an occasion in 1988 when a legal opinion on lease arrangements was sought from Adelaide QC Bruce Lander who is now the Independent Commissioner Against Corruption.
According to the staff report, the council had the options of either selling the freehold of the service station via an expression of interest process or maintaining the status quo and to look to secure another lease arrangement beyond 2021.
It was stated the expression of interest process could incur up to $20,000 in additional costs such as a market valuation and legal fees.
During debate on the staff report, Cr Dean Burrow queried whether council could sell the service station buildings and retain ownership of the adjacent open land.
However, chief executive Ben Gower pointed out the land parcel was on one title.
Mr Gower also quoted a recent media report which suggested the “tipping point” for affordability of electric cars could be as early as 2025.
Cr Dale Price expressed his disappointment the discussions about the service station were not being held on a confidential basis.
“We are talking about a commercial return to ratepayers,” Cr Price said.
Cr Kevin McGrath said the future of the service station had been discussed before.
He said it has a high-risk future.
Cr Dennis Muhovics said the asset may be of little value in 15 years’ time.
According to Cr Peter Dunnicliff, asking for expressions of interest was the sensible way to go.
He said councils should not be in the business of owning such facilities.
“Service stations have major end-of-life costs.”
Cr Dunnicliff said the capital return from the service station sale could be applied to other council assets such as a new office.
At the conclusion of the debate, council voted to seek expressions of interest for the sale of the freehold.
