Peppercorn lease for pools

Noble Park Aquatic Centre. 210326_05 Picture: GARY SISSONS

By Cam Lucadou-Wells

Greater Dandenong Council is proposing to lease its four major leisure centres to council-owned subsidiary South East Leisure Pty Ltd.

SEL – which was created by the council in 2021 – is poised to take over running Dandenong Oasis, Dandenong Stadium, Noble Park Aquatic Centre and Springers Leisure Centre from 1 July.

Under the plan, SEL will lease the centres for 10 years at a peppercorn rent of $1 a year from that date.

This would enable SEL to start “full management” of the centres, a council report stated.

Under the arrangement, the council pays any SEL quarterly-earnings deficit as a management fee.

Surpluses are paid to the council as a dividend.

At a 23 May council meeting, Cr Tim Dark said it would be “prudent” to have a copy of SEL’s proposed operational budget prior to voting on the lease.

The proposal is open for public comment until 14 June, with councillors expected to vote on 27 June.

In June 2021, SEL’s first year of establishment costs were expected to be $1.6 million-$2.1 million.

In a report to the council in 2021, the model was expected to produce the “most economic financial result for council”.

It will have a “strong focus on improving community well-being and participation in leisure activities”.

Mr Fidler at the time said the South East Leisure option was chosen because the council didn’t have the expertise to manage the centres “in house”.

At the same time, the council had control to protect its “significant investment” in its assets, such as $6 million upgrade of NPAC and the $80 million-plus Oasis redevelopment.

SEL was created along the lines of Dandenong Market Pty Ltd, which runs the council-owned market.

Its paid five-member council-appointed board includes chair Stephen Wright – a former Richmond Football Club CEO.

The other directors are former City of Greater Dandenong corporate services director Mick Jaensch, former Dandenong Market director Tim Cockayne, Commonwealth Bank executive manager Laura Buckley and senior healthcare executive Dr Malak Sukkar.

In setting up SEL, the council opted not to renew the contracts of leisure centre managers Dandenong Basketball Association and YMCA.

Their contracts expire on 30 June.

Mr Fidler said at the time there were “no specific failings” by the DBA and the YMCA.