Wake up Joondalup

The Churches of Christ Sport and Recreation Association (CCSRA), which operates Warwick Stadium, emailed its mailing list this week.

Subject line: “We operate the facility. You help us shape what it needs to be.”

The email invites feedback on the stadium’s future. One link goes to CCSRA. The other directs matters involving capital investment, infrastructure, upgrades and major works straight to the City’s complaints page.

Warwick Stadium does need attention. But the request lays bare the fundamental problem with its leasing arrangement.

CCSRA operates the facility and keeps the operating revenue from the snack-bar to the sponsorships (and any approved sub-leasing income).

The City owns the building, but receives only heavily subsidised rent, while retaining responsibility for the expensive long-term needs of the public asset.

Income and investment responsibility are split.

How did we get here?

In 2013 the City contributed $2.3 million toward the stadium’s expansion. CCSRA says it invested over $8 million. In return it secured a heavily subsidised lease over the whole facility, with tenure that can stretch to 30 years.

The original Council report implied annual rent of roughly $11,665 once the expansion was finished, on a building then valued at $23.33 million replacement cost.

That figure is historical, not today’s invoice, but it shows the scale of the subsidy. The approved formula is just 0.05% of the applicable replacement value.

And that's all the income the City receives from Warwick Stadium. The City receives none of the operating income that could help fund modernisation. CCSRA receives that income yet points to the City as the owner responsible for upgrades and major capital works.

Now the community is being asked for 'feedback' that looks like an effort to strengthen the case for further public spending.

Where does that leave ratepayers?

If the City does not invest, the public building grows more outdated and users lose out.

If the City does invest, ratepayers improve CCSRA’s revenue-generating platform without receiving any share of the operating return.

We own the asset either way. We remain exposed to its long-term costs either way. The peppercorn-style rent gives the City almost nothing with which to meet those costs.

That is an untenable setup.

It also means many ratepayers pay twice: once through the charges to use the facility, and again through the public funding of the building and without the subsidised community rates available at City-run venues.

I would rather the City had funded the full expansion and retained operational control and the revenue. That would have meant carrying the operating risks, as they do with Craigie LC, but at least income, expenditure and investment decisions would have sat together.

Instead we have a public asset whose commercial income flows to a separate operator while the major investment decisions come back to the City.

Warwick Stadium needs a sustainable future. Pouring more ratepayer money into the same structure simply leaves the same problem waiting at the next upgrade.

The City should identify the earliest lawful and financially responsible path to unwind this arrangement without disrupting the clubs, programs and people who rely on the stadium. It should not extend it, and it should not repeat it elsewhere.

Public investment must secure lasting public benefit, affordable community access, and a credible plan to fund the asset’s future.

In my view, this arrangement does not adequately serve ratepayers. We need a way out, not another round of funding that makes the problem more entrenched.

#wakeupjoondalup