The Kiama Council has sold the gold-plated Blue Haven Bonaira facility to Hall & Prior Aged Care for $95m on paper, but once deductions were made for entitlements and accommodation deposits, the net figure plummeted to around $26m.

If one includes paying off the $15m TCorp debt, the council will pocket about $11m. Settlement is planned for 1 November 2024.

To paraphrase the late Kerry Packer, the Kiama Council only comes along once in a businessman’s life.

This will cut Kiama Councils’ debt, staunch year-on-year losses and fund its ballooning legal costs.

MORE COURT ACTION

Council will also take the Bonaira builder Richard Crookes Construction to court, as the sale price had been affected by building defects, drainage and cladding issues.

CEO Jane Stroud said the defects on the property’s value were too extensive to be ignored.

The council’s current legal bills are just under $5m.

The sale price was not affected by union or resident protests.

Mayor Neil Reilly said the sale of Blue Haven Bonaira was a win for the community, the residents and the council.

“The sale ensures that Blue Haven Bonaira continues to provide excellent care under the management of Hall & Prior Aged Care, while allowing us to focus on financial sustainability and service delivery,” Mayor Reilly said.

Hall & Prior CEO Graeme Prior said no jobs or entitlements would be lost due to the sale.

“We expect to hire up to 100 more staff over the next two years,” Mr Prior said.

The sale buries one of the most acrimonious periods of the council’s history, with vocal residents trying to stop the sale, which set councillor against councillor.

COST BLOW OUT

The cost of the Blue Haven Bonaira build was approximately $83m yet inflation and material costs blew this out to $107m (2022-23), yet some suggest the real cost was much higher.

The stress on Bonaira residents and their families was not quantifiable.

In September 2013, the plan was to build a $40m aged care centre. By July 2014 it had risen to $55m.

By December 2014, the price had rocketed to $62.9m. By 2018, it had soared to $103m.

Council borrowed $60m from TCorp and in total, spent $107m on construction. It used more than $20m of internal reserves and cash to fund shortfalls in construction costs.

It is still unknown if tapping those reserves included monies from rate payers.

Blue Haven Bonaira was completed in 2019 by Richard Crookes Constructions.

BUNG ACCOUNTS

The cost blowout and ongoing operational losses, undermined the council’s budgets and caused a raft of severe knock-on problems.

These included the discovery that council’s accounts were wrong and it could not accurately track where monies had come from or gone.

The council used the Refundable Accommodation Deposits and Independent Living Unit to make initial payments to TCorp.

Blue Haven Terralong was also going to be sold but was defeated by a single vote.

It will remain in Council’s hands for the time being. The new NSW government Performance Improvement Order calls for a tighter rein on finances, to ensure rate revenue was not subsidising its operation.

Apart from operating Blue Haven Terralong, the sale of Blue Haven Bonaira will allow the council to focus on the core business of providing local government services.

Blue Haven Bonaira is a 134-bed residential aged care facility, which includes 59 Independent Living Units, the administration offices for Blue Haven Home Care Services, Matterson Hall, the Barroul House café, a chapel, a gym and a hair salon.

Prior is the co-founder and CEO of Hall & Prior, a nationally recognised and respected leader in aged care delivery, quality and innovation. Founded in 1992 with a single family-owned nursing home.

It now operates 13 residential aged care homes across Sydney and regional NSW, and 23 aged care homes in Western Australia and employs more than 3100 staff.