THE developer behind the Shaolin temple project will enjoy another year-long interest holiday on the land at Comberton Grange it is buying from Shoalhaven City Council.
Council voted on Thursday night to waive interest payments on the $5 million loan it provided for the developer to buy the land until June 30, 2015, a decision slammed by Cr Andrew Guile.
“Shoalhaven City Council has clearly crossed the line when it comes to responsible management of public funds,” Cr Guile said.
“This amounts to an extra loan of $295,000 which would mean a total debt to council in 12 months' time of over $5.3 million. Council's sweetheart deal for this developer just keeps getting better.”
Cr Guile said he was also dismayed when, under questioning, general manager Russ Pigg conceded that should the temple deal fall over or not proceed for any reason, the chances of recovering the outstanding interest payments were virtually zero.
“Clearly this $360 million project would provide an economic stimulus for the local economy but it now seems that the Mayor and most councillors are being led blind by a developer that either cannot or will not perform under the cosy contracts set up in 2007.
“How can we have any confidence that a development of this size and scale is likely to proceed when its backers can't even service the property loan with an interest rate of under 2.7 per cent?" he said.
Shoalhaven Mayor Joanna Gash she was comfortable with the arrangement.
“We’ve had legal advice and have been assured we are doing the right thing,” Cr Gash said.
“I’m very comfortable with the way the general manager has acted. Council has been informed the whole time.
“It’s a case of what Cr Guile thinks and what council thinks. The reason I’m positive is that I don’t want to see a development like this go past.”
Cr Gash said if the mortgage fell through council had the ability to get the land back.
"Council would also retain the $250,000 deposit plus $639,000 in interest already paid. Council is still financially better off now," she said.