Business

Tower in rental arrears for a year: Brittany Lauga

GREAT KEPPEL ISLAND DISPUTES: Member for Keppel Brittany Lauga says Tower Holdings has the necessary approvals to undertake a resort redevelopment, including construction of a beachfront hotel, tourist villas and apartments, a marina, an airport and an 18 hole golf course.
GREAT KEPPEL ISLAND DISPUTES: Member for Keppel Brittany Lauga says Tower Holdings has the necessary approvals to undertake a resort redevelopment, including construction of a beachfront hotel, tourist villas and apartments, a marina, an airport and an 18 hole golf course. Contributed

BRITTANY Lauga yesterday revealed Tower Holdings has been in rental arrears for a year, with the department intending to issue formal "notices of intent to forfeit" in the coming days.

The Keppel MP said she was disappointed to reveal the company was not meeting its financial obligations to their Great Keppel Island lease.

She also unveiled her "three-point plan" to get the GKI project off the ground without a casino licence and said she was behind Tower Holdings "all the way" despite days of criticism following the parliamentary vote on Wednesday.

In a release on the issue, Ms Lauga said Tower had rent arrears of more than $249,000 in relation to four of its GKI leases and one marine lease over the underwater observatory.

"The Department (of Natural Resources and Mines) has had numerous interactions with Tower over the past year in an attempt to manage rent arrears, most recently on March 2 when they failed to pay the quarterly invoices due on March 1," she said.

"Tower Holdings owes substantial rental arrears and, in situations like this, the department works with lessees to attempt to manage the debt.

"However, where a lessee fails to pay rent or manage significant arrears, the department is able to undertake debt recovery action through the forfeiture and sale provisions of the Land Act."

But information provided by the office of Ms Lauga said given the value of the leases and the infrastructure on them, GKI Resort Pty Ltd (a subsidiary of Tower Holdings) were likely to pay the outstanding debt once the department commences formal forfeiture and sale actions.

The DNRM wrote to GKI Resorts on July 6 last year to remind the company of its lease obligations and received a response on September 17.

They reportedly advised the department of a number of actions that were being progressed to address the areas of non-compliance, though none are yet completed.

Despite all this, the MP said she was paving a pathway forward for Tower, so work could begin on GKI immediately.

She suggested the company scale back Stage One and apply for the Northern Australia Infrastructure Fund, with the realisation that generating infrastructure under the sea from the mainland was an obstacle to obtaining finance.

Ms Lauga said the fund was a way for Tower to fund power, water and telecommunications.

"I made enquiries and was advised Tower would be eligible," she said.

"(Tower Holdings chairman) Terry Agnew has confidence that he can start work on this project without a casino licence... he said they would start work in 2015 regardless of whether they got a casino licence or not.

"Terry Agnew is so confident of starting work on this project that he signed agreements with the State Government which promised that they would start work (even after the LNP didn't give them a casino licence)."

The Tower Holdings' spokesperson declined to comment on the proposed plan and the rent arrears.

Lauga's three-point plan

1. Tower needs to pay the lease rent in arrears as soon as possible and comply with all of their obligations of the lease

2. Tower, the Federal Government and myself to work together to get a slice of this Northern Australia Infrastructure Facility finding;

3. Tower needs to start the detailed design of a scaled back Stage 1 to get shovel to ground

Topics:  brittany lauga keppel tower holdings



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