Mildura college lease

http://www.abc.net.au/news/stories/2008/10/24/2400015.htm
Posted Fri Oct 24, 2008 9:50am AEDT
Map: Mildura 3500
The Mildura Rural City Council will push for an overhaul of the city's college lease scheme.
The scheme was set up by the region's founders, the Chaffeys, 100 years ago, and consists of 184 commercial and residential properties that are subject to college lease fees.
A review has found it is showing a return of only 2 per cent a year to assist the region's schools.
An assessment by a Sydney consultant commissioned by the Mildura Rural City Council has found returns averaging 6 per cent could be achieved if the land was sold and the proceeds reinvested.

http://www.mildura.vic.gov.au/page/PagePrint.asp?Page_Id=2581
Community Loses On College Lease: Report - 23/10/2008


A Mildura Rural City Council-commissioned report has found the region’s college lease land is returning only 2.1% per annum to local schools.
There are 184 properties in Mildura Rural City that are subject to college lease and an independent assessment conducted by Sydney firm AG Private Advisory has found that higher returns on this level of investment could be brought forward to local schools through more conventional financial means.Upon receiving the report at its October meeting, Council has committed itself to proactively facilitate a change to the Mildura College Lands Act (1916) enabling the College Lease Trust to sell leased land and reinvest proceeds in secure investments, generating improved returns and opening up leased land for development.A 2004 Ernst and Young report found the value of College Lease holdings was $39,338,000.Councillor for Community and Economic Development Vernon Knight said College Lease agreements were causing financial hardships to many leaseholders.“The financial imposts imposed by increasing college lease rentals are significant for many families who lease land from the College Lease Trustees,” Councillor Knight said.“The report shows that a conservative cash investment strategy implemented since 1990 would have earned an average of 6.6% annually. It is thus clear that there are potentially many more effective investment options that could deliver great benefits to the region’s schools while relieving land owners, many of them families, of the financial impost imposed by college lease agreements.“This report confirms that current college lease arrangements are an anachronism that is holding our community back and not delivering true value for our education sector.”

http://www.mildura.vic.gov.au/page/page.asp?page_id=2031

Council Campaigns On College Lease - 27/7/2007
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Mildura Rural City Council will be lobbying the Victorian Government to help ease the squeeze on some owners of land covered by College Lease.The move follows a recommendation Councillor Vernon Knight put to the July Ordinary Council meeting held yesterday.
Current Victorian legislation requires Council’s valuers to consider College Lease property to be sub-divisible land in the event that its zoning would make this possible as if the property was unencumbered freehold.This is in spite of the fact that subdividing College Lease land is generally unprofitable.This discrepancy can have significant effects on the rates some college lease holders are required to pay. In line with college lease rental land owners pay to the College Lease trust annually, the requirement that college lease restrictions are not considered in the valuation of properties can have significant financial implications.While adopting its Hardship Policy which aims to assist people who are experiencing difficulty paying Council rates at its Ordinary July meeting on Thursday, Council also adopted the following:“Council make representations to the Planning Minister in relation to the provisions of the Valuation of Land Act which requires Council Valuers to consider College Lease property to be sub-divisible land in the event that its zoning would enable sub-division were it not College Lease.”Following the adoption of the recommendation, Council will be seeking to amend the Valuation of Land Act (1960) to ensure the definition of Capital Improved Value takes into account the fact that College Lease land cannot be subdivided profitably and should be valued on that basis.The act states:"Capital Improved Value means the sum which land, if it were held for an estate in fee simple unencumbered by any lease, mortgage or other charge, might be expected to realise at the time of valuation if offered for sale on any reasonable terms and conditions which a genuine seller might in ordinary circumstances be expected to require." Councillor Knight said he understood there is a situation which has affected a number of people in Mildura. “It’s clear that the whole concept of College Lease would not have been considered when the Valuation of Land Act (1960) was framed,” Councillor Knight said.“Given the residential development that often adjoins such properties, Council valuers are required to consider the capital improved value on the basis of its potential value for subdivision in spite of the restrictions on subdivision that College Lease places.“Anomalies such as this again raise questions about the appropriateness of College Lease in its present form and the need to review the nature of the trust.”