Dear Sir

I note that some media outlets claim that the Glenorchy City Council runs an operating loss in excess of a million dollars on the DEC.

That statement is inaccurate.

What the Mayor of Glenorchy Kristie Johnston explained at the public meetings to justify the large rate increase was that the Glenorchy Council makes an operating loss likely in excess of $200,000 but the Auditor General forces the Council to set aside $800,000 per annum as a depreciation allowance.

If one applies the conventional 2.5% depreciation rate for buildings, that values the Derwent Entertainment Centre at $32 million.

I would be very surprised if the basketball consortium that wants to buy the DEC are going to pay anything like $32 million for it.

It seems to be the case that public assets are given away; it’s a pity if this happens again in Glenorchy.

Of course it maybe, that the Auditor General has grossly overvalued the Centre or has been misunderstood or that something else strange is happening.

But I suspect that the figures don’t add up properly.

One must also question the attitude of the Auditor General in insisting that Glenorchy set aside a large amount of money in depreciation for an asset that doesn’t make any profit and which the Council doesn’t really want to keep.

But if the Council can’t get its $32 million for the DEC it might be smarter to give the basketball as a long term lease even for 50 years or 25 years in return for renovating it and taking it off the Council’s hands.

The big advantage of a lease is that a lease can contain positive covenants compelling people to do things so all the wonderful promises about the DEC being available for the community to use can be enforced.

There are technical legal difficulties about creating and enforcing positive as opposed to restrictive covenants on land unless you use the mechanism of a lease.

What concerns me is that I suspect this is yet another case of a public asset being GIVEN away to some form of “developer”.

Yours Faithfully,

John Green LLB
John Green LLB