Council to pay $190K compensation to business
A BUNDABERG businessman who sought close to a million dollars in compensation after the council resumed the land the skating rink he was operating was on, has walked away from court with only $193,600.
The Land Court of Queensland delivered its verdict in relation to the Extreme Zone Skate Centre and Amusement Arcade, formerly the Bundaberg Skating Rink, on June 21 following several days of a hearing earlier in the year.
Neil Irvine acquired an interest in the skating rink in 2002 and ran it at a profit as a family business until Bundaberg Regional Council took the land back as part of multiplex works at the old showgrounds site in 2016.
The acquisition was made under the Acquisition of Land Act 1967.
The rink, as well as a caretaker's residence, was constructed in 1979.
The original 40-year lease term for the skating rink was due to expire on June 30 this year, with a concurrent option for a further 30-year term.
According to court documents, Mr Irvine sought compensation including $224,260 for the residential value of lease, $409,569 for the residential value of option to lease, $203,800 for disturbance, $40,000 for costs and $82,500 for loss of profits calculated at $33,000 a year for 33 months.
The council initially submitted that Mr Irvine was not entitled to any compensation because the skating business had no value and therefore "no prudent purchaser" would acquire the lease.
However, in written submissions filed after the hearing, the council conceded Mr Irvine was entitled to $100,000 for the value of the existing leasehold interest and $27,500 for legal and professional fees attributable to disturbance.
In the argument for compensation, assessments were presented to the court in Brisbane explaining alleged similarities between three other recreational venues - the Bundaberg Indoor Sports Centre, FlipOut Indoor Trampoline Sports and Gymfinity.
However, it was determined the valuations on these properties were not in line with the skating rink for reasons including the fact they were not purpose-built and could readily be altered to accommodate other ventures.
The skating rink, however, was purpose-built and to incorporate other uses would have incurred considerable cost, in addition to $60,000 worth of maintenance work that was needed.
It was determined it would be cheaper to move the business to a new commercial property in an industrial area.
After calculations were made around the potential of the business had it remained in place, Member of the Land Court PG Stilage OAM ordered Bundaberg Regional Council to compensate Mr Irvine a total of $193,600 - $117,00 of Mr Irvine's claim for $200,000, nothing of the $400,000 claimed for residential value of option, $49,100 of the $203,800 claimed for disturbance, $27,500 for the claim of $40,000 for costs and nil for loss of profit.