Business Newcastle president asks what's next if traders reject controversial rate

CITY of Newcastle will go to business owners that pay a Special Business Rate (SBR) with two questions: whether they think the scheme provides value for money, and if it should continue.
Business Newcastle president Edward Duc has a question of his own: What's next if the answer is no?
This week, councillors voted to survey business owners in SBR precincts about the future of the controversial scheme after several submissions to a recent independent probe into the council raised concerns about the transparency of how the funds are levied, allocated and spent.
Mr Duc said feedback he has received is that a large proportion of those who pay the SBR do not see the value in the scheme.
"We've got businesses, and I'm not saying this is the only reason, who are moving from Newcastle to Charlestown because of the high commercial rates," he said.
"The more money that traders have to give to the council, the more it just inhibits what they can do.
"It is Business Newcastle's view that the council should suspend the SBR and generate the funding themselves out of the generous commercial rates they're charging, that's our stand at the moment."
City of Newcastle made $65.9 million in business rates in 2023/24 from 15,489 active businesses, the second-highest sum of any NSW council.
The SBR is an additional charge levied on businesses in the precincts on top of their standard commercial rates.
The Newcastle Herald asked City of Newcastle when it intends to conduct the survey and whether it intends to remove the SBR if businesses answer no to its two questions.
If not, the Herald asked what the purpose of the survey is and what the council feels the value of the SBR is to businesses.
Questions were also asked about the impact of the Port of Newcastle on commercial rates and the council's response to claims that SBR funds used on events should be funded by ratepayers and the council rather than business owners.
In response, a City of Newcastle spokesman said following Tuesday's council meeting, the council is considering the "most appropriate" mechanism for implementing the SBR survey.
"The elected council and community will be informed at the appropriate time," he said.
The scheme has long been a point of contention, with some business owners questioning its necessity and others calling for it to be axed entirely.
In 2024/25, the council said the cost to administer the scheme, including BIA governance and support, is $152,700. That figure is 10 per cent of total funds levied.
Business Improvement Associations (BIA) in the city centre and Darby Street, Hamilton, Mayfield, New Lambton and Wallsend are independent organisations responsible for disbursing up to $100,000 of SBR funds each year.
That money can be used for strategic directions to promote local business, marketing and promotions, prioritising and managing beautification projects and coordinating community events aimed at encouraging business demand.
The council decides how the remainder of SBR funds are spent.
Mr Duc said many business owners do not feel the SBR is being spent in a way that directly benefits them.
"We've got to make sure that all of the people who actually pay the levy get to have a say," he said.
"If the council doesn't take notice of the business community, then we will be having a big say, and we have a bit of muscle because we're part of Business NSW and Business Hunter.
"Be assured, if the answer from businesses is no and the council decides not to act on it through the BIAs, then we will be lobbying to have it [the SBR] removed."
The Davidson review recommended that the council require BIAs to undertake research with membership and the community annually, or at agreed regular intervals, to assess satisfaction, impact and present the findings to the council for consideration.
CITY of Newcastle will go to business owners that pay a Special Business Rate (SBR) with two questions: whether they think the scheme provides value for money, and if it should continue.
Business Newcastle president Edward Duc has a question of his own: What's next if the answer is no?
This week, councillors voted to survey business owners in SBR precincts about the future of the controversial scheme after several submissions to a recent independent probe into the council raised concerns about the transparency of how the funds are levied, allocated and spent.
Mr Duc said feedback he has received is that a large proportion of those who pay the SBR do not see the value in the scheme.
"We've got businesses, and I'm not saying this is the only reason, who are moving from Newcastle to Charlestown because of the high commercial rates," he said.
"The more money that traders have to give to the council, the more it just inhibits what they can do.
"It is Business Newcastle's view that the council should suspend the SBR and generate the funding themselves out of the generous commercial rates they're charging, that's our stand at the moment."
City of Newcastle made $65.9 million in business rates in 2023/24 from 15,489 active businesses, the second-highest sum of any NSW council.
The SBR is an additional charge levied on businesses in the precincts on top of their standard commercial rates.
The Newcastle Herald asked City of Newcastle when it intends to conduct the survey and whether it intends to remove the SBR if businesses answer no to its two questions.
If not, the Herald asked what the purpose of the survey is and what the council feels the value of the SBR is to businesses.
Questions were also asked about the impact of the Port of Newcastle on commercial rates and the council's response to claims that SBR funds used on events should be funded by ratepayers and the council rather than business owners.
In response, a City of Newcastle spokesman said following Tuesday's council meeting, the council is considering the "most appropriate" mechanism for implementing the SBR survey.
"The elected council and community will be informed at the appropriate time," he said.
The scheme has long been a point of contention, with some business owners questioning its necessity and others calling for it to be axed entirely.
In 2024/25, the council said the cost to administer the scheme, including BIA governance and support, is $152,700. That figure is 10 per cent of total funds levied.
Business Improvement Associations (BIA) in the city centre and Darby Street, Hamilton, Mayfield, New Lambton and Wallsend are independent organisations responsible for disbursing up to $100,000 of SBR funds each year.
That money can be used for strategic directions to promote local business, marketing and promotions, prioritising and managing beautification projects and coordinating community events aimed at encouraging business demand.
The council decides how the remainder of SBR funds are spent.
Mr Duc said many business owners do not feel the SBR is being spent in a way that directly benefits them.
"We've got to make sure that all of the people who actually pay the levy get to have a say," he said.
"If the council doesn't take notice of the business community, then we will be having a big say, and we have a bit of muscle because we're part of Business NSW and Business Hunter.
"Be assured, if the answer from businesses is no and the council decides not to act on it through the BIAs, then we will be lobbying to have it [the SBR] removed."
The Davidson review recommended that the council require BIAs to undertake research with membership and the community annually, or at agreed regular intervals, to assess satisfaction, impact and present the findings to the council for consideration.
CITY of Newcastle will go to business owners that pay a Special Business Rate (SBR) with two questions: whether they think the scheme provides value for money, and if it should continue.
Business Newcastle president Edward Duc has a question of his own: What's next if the answer is no?
This week, councillors voted to survey business owners in SBR precincts about the future of the controversial scheme after several submissions to a recent independent probe into the council raised concerns about the transparency of how the funds are levied, allocated and spent.
Mr Duc said feedback he has received is that a large proportion of those who pay the SBR do not see the value in the scheme.
"We've got businesses, and I'm not saying this is the only reason, who are moving from Newcastle to Charlestown because of the high commercial rates," he said.
"The more money that traders have to give to the council, the more it just inhibits what they can do.
"It is Business Newcastle's view that the council should suspend the SBR and generate the funding themselves out of the generous commercial rates they're charging, that's our stand at the moment."
City of Newcastle made $65.9 million in business rates in 2023/24 from 15,489 active businesses, the second-highest sum of any NSW council.
The SBR is an additional charge levied on businesses in the precincts on top of their standard commercial rates.
The Newcastle Herald asked City of Newcastle when it intends to conduct the survey and whether it intends to remove the SBR if businesses answer no to its two questions.
If not, the Herald asked what the purpose of the survey is and what the council feels the value of the SBR is to businesses.
Questions were also asked about the impact of the Port of Newcastle on commercial rates and the council's response to claims that SBR funds used on events should be funded by ratepayers and the council rather than business owners.
In response, a City of Newcastle spokesman said following Tuesday's council meeting, the council is considering the "most appropriate" mechanism for implementing the SBR survey.
"The elected council and community will be informed at the appropriate time," he said.
The scheme has long been a point of contention, with some business owners questioning its necessity and others calling for it to be axed entirely.
In 2024/25, the council said the cost to administer the scheme, including BIA governance and support, is $152,700. That figure is 10 per cent of total funds levied.
Business Improvement Associations (BIA) in the city centre and Darby Street, Hamilton, Mayfield, New Lambton and Wallsend are independent organisations responsible for disbursing up to $100,000 of SBR funds each year.
That money can be used for strategic directions to promote local business, marketing and promotions, prioritising and managing beautification projects and coordinating community events aimed at encouraging business demand.
The council decides how the remainder of SBR funds are spent.
Mr Duc said many business owners do not feel the SBR is being spent in a way that directly benefits them.
"We've got to make sure that all of the people who actually pay the levy get to have a say," he said.
"If the council doesn't take notice of the business community, then we will be having a big say, and we have a bit of muscle because we're part of Business NSW and Business Hunter.
"Be assured, if the answer from businesses is no and the council decides not to act on it through the BIAs, then we will be lobbying to have it [the SBR] removed."
The Davidson review recommended that the council require BIAs to undertake research with membership and the community annually, or at agreed regular intervals, to assess satisfaction, impact and present the findings to the council for consideration.
CITY of Newcastle will go to business owners that pay a Special Business Rate (SBR) with two questions: whether they think the scheme provides value for money, and if it should continue.
Business Newcastle president Edward Duc has a question of his own: What's next if the answer is no?
This week, councillors voted to survey business owners in SBR precincts about the future of the controversial scheme after several submissions to a recent independent probe into the council raised concerns about the transparency of how the funds are levied, allocated and spent.
Mr Duc said feedback he has received is that a large proportion of those who pay the SBR do not see the value in the scheme.
"We've got businesses, and I'm not saying this is the only reason, who are moving from Newcastle to Charlestown because of the high commercial rates," he said.
"The more money that traders have to give to the council, the more it just inhibits what they can do.
"It is Business Newcastle's view that the council should suspend the SBR and generate the funding themselves out of the generous commercial rates they're charging, that's our stand at the moment."
City of Newcastle made $65.9 million in business rates in 2023/24 from 15,489 active businesses, the second-highest sum of any NSW council.
The SBR is an additional charge levied on businesses in the precincts on top of their standard commercial rates.
The Newcastle Herald asked City of Newcastle when it intends to conduct the survey and whether it intends to remove the SBR if businesses answer no to its two questions.
If not, the Herald asked what the purpose of the survey is and what the council feels the value of the SBR is to businesses.
Questions were also asked about the impact of the Port of Newcastle on commercial rates and the council's response to claims that SBR funds used on events should be funded by ratepayers and the council rather than business owners.
In response, a City of Newcastle spokesman said following Tuesday's council meeting, the council is considering the "most appropriate" mechanism for implementing the SBR survey.
"The elected council and community will be informed at the appropriate time," he said.
The scheme has long been a point of contention, with some business owners questioning its necessity and others calling for it to be axed entirely.
In 2024/25, the council said the cost to administer the scheme, including BIA governance and support, is $152,700. That figure is 10 per cent of total funds levied.
Business Improvement Associations (BIA) in the city centre and Darby Street, Hamilton, Mayfield, New Lambton and Wallsend are independent organisations responsible for disbursing up to $100,000 of SBR funds each year.
That money can be used for strategic directions to promote local business, marketing and promotions, prioritising and managing beautification projects and coordinating community events aimed at encouraging business demand.
The council decides how the remainder of SBR funds are spent.
Mr Duc said many business owners do not feel the SBR is being spent in a way that directly benefits them.
"We've got to make sure that all of the people who actually pay the levy get to have a say," he said.
"If the council doesn't take notice of the business community, then we will be having a big say, and we have a bit of muscle because we're part of Business NSW and Business Hunter.
"Be assured, if the answer from businesses is no and the council decides not to act on it through the BIAs, then we will be lobbying to have it [the SBR] removed."
The Davidson review recommended that the council require BIAs to undertake research with membership and the community annually, or at agreed regular intervals, to assess satisfaction, impact and present the findings to the council for consideration.

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13 hours ago

• The Advertiser

What airport mortgage document says about Newcastle, Port Stephens council ties to $235m loan

EXPERTS who reviewed a mortgage document for Newcastle Airport's $235 million loan say both Newcastle and Port Stephens ratepayers could be on the hook for the borrowings, but the councils say the document can not be "relied upon in isolation". The potential risk to ratepayer funds is outlined in a 57-page mortgage document, signed by City of Newcastle chief executive officer Jeremy Bath and Port Stephens Council senior executive Greg Kable in March 2023 and obtained as part of a Newcastle Herald investigation into Newcastle Airport's financial situation. Legal and business law experts consulted by the Herald have identified nine clauses in the publicly available mortgage document that indicate the councils, joint owners of the airport, could be held legally liable for the airport's $235 million Commonwealth Bank loan. In response, airport owners Port Stephens Council and City of Newcastle said in a joint statement earlier this year that the mortgage document could not be "relied upon in isolation to understand the financing arrangements", but declined to elaborate when asked for other relevant documents. In the weeks since the release of the Davidson Review, an independent inquiry into the City of Newcastle's policies, processes and procedures, simmering tensions within the council over the airport have overflowed into a public spat. Labor councillor Declan Clausen has made reference to past comments made by lord mayor Ross Kerridge regarding the financial situation of the airport, accusing the lord mayor of "rewriting history" by deleting past Facebook posts and saying the review showed: "every major decision about the airport was made lawfully, responsibly, and with proper controls and oversight". While not examining the airport's financial situation, the Davidson Review said it was "considered unlikely" that any significant financial risks from the airport would be transferred to the City of Newcastle, without detailing how it came to this conclusion. In the months prior to the review, the Herald had been working to clarify whether ratepayers were exposed to the record $235 million CBA loan facility. When questioned about the possible liability to ratepayers as outlined in the mortgage document, councillors from Newcastle issued what they called an "unprecedented" joint statement. "Councillors were informed in February 2023 that there were a series of legally binding agreements that sat alongside the mortgage of head lease that govern the financial arrangements, including securing the loans against airport assets only, thereby limiting the financier's recourse," the joint statement reads. The councils declined to answer specific questions about clauses in the mortgage that would allow CBA to access council funds if anything goes wrong, and if they are enforceable. They also declined to identify documents that overrule the mortgage to establish that ratepayer funds are off-limits. The airport secured the loan in April 2023 to construct a new international terminal and fund its property development business. While the councils are not parties to the loan or guarantors, they are linked to the deal because they hold the head lease with the Commonwealth for the 28 hectares of land where the airport operates south of Williamtown RAAF Base. The airport can't operate without the lease, so the bank wanted it as security. To ensure the airport could get its $235 million loan, the councils voted unanimously in separate confidential sessions in February 2023 to offer up the head lease as security for the loan. The head lease mortgage document establishes a legal agreement between City of Newcastle, Port Stephens Council, and the CBA. According to the councils, "CBA has confirmed in writing to the airport that the commercial intent of the mortgage of the head leases is limited recourse third party securities". Despite the intent, three experts who reviewed the mortgage said it had the potential to cause heartache for ratepayers if anything goes wrong. When considered in isolation, they said the mortgage gives CBA legal recourse to council funds. Associate Professor Keturah Whitford, dean of staff at the Australian National University's College of Business and Economics, said, "critically, there is nothing in the mortgage which limits the liability of the councils to the realised value of their interests in the airport lease". Professor Whitford, who specialises in business law, reviewed only the mortgage document. She said under the mortgage, the councils agreed to "ensure that no event of default occurs" and to "procure the punctual payment" of the secured money. "While the councils may not be borrowers, guarantors or obligors under the loan facility, the mortgage secures, amongst other things, 'all money which any obligor is or may become actually or contingently liable to pay under or in connection with the finance documents'...," she said. "Further, the council indemnifies the CBA for losses in connection with, among other things, any default." According to the mortgage document, if the airport defaults on a loan payment or interest, the councils could have to pay the money. If CBA cannot recoup money owed from the airport, under the mortgage, the councils have agreed to compensate the bank for any losses, liabilities, costs, expenses and taxes it incurs. Under the mortgage terms, the bank can also enforce its right against the councils before it seeks funds from the airport. If this were to happen, the councils could claim against the airport. It is unknown how much money, if any, the councils could be held responsible for, as the agreement does not put a ceiling on the possible costs. According to the agreement, the councils cannot ask for the mortgage to be discharged until CBA is satisfied that all the secured money has been paid. There is nothing in the mortgage, like a limited recourse provision, to restrict Port Stephens or Newcastle councils' legal liability to the value of the head lease. This means that if the airport could not foot the bill, under the mortgage terms, the councils could have to pay more than the value of the head lease they have mortgaged to settle the airport's debt to CBA. The Herald asked the councils if they were required to ensure there was no default by the airport on its $235 million loan, if the councils were legally liable for the loan or if they had agreed to compensate CBA for any losses, liabilities, costs, expenses and taxes associated with the airport loan. They did not answer the questions. The joint response said the airport entities were independent of the councils regarding legal liability. "As previously explained to the Herald, there are a number of interrelated legal agreements and deeds that reflect the corporate structure of the airport separate to the councils that dictate the operation of the previous loan agreement with ANZ and now with the Commonwealth Bank," it reads. When the Herald asked individual councillors if they knew of any possible risk to ratepayer funds, Newcastle's Labor, Green, Independent, and Liberal councillors joined forces to dispel concerns, minus lord mayor Ross Kerridge and his Independent running mate Peter Gittins. The 11 councillors said they had "independently sought clarity" and "received multiple briefings" about the airport's financial situation. They said the council unanimously endorsed a proposal for the airport to refinance from ANZ to CBA, to increase its loan from $100 million to $235 million at its meeting on 28 February 2023. "The loan is secured solely against the airport's head lease with the Commonwealth Government," the joint statement reads. "This lease is the only security at risk in the unlikely event of a default. This ensures that there is no legal exposure to the councils or to ratepayer funds ... As councillors, we are committed to ensuring governance processes are followed, financial risk is properly understood, and the community is accurately informed." Questions about the mortgage arrangements come after Herald scrutiny of the airport's financial situation revealed the airport was looking to cut staff, had asked Defence to waive its rent, had been in discussions with councils to access a financial injection of up to $40 million, had been diverting millions in cash reserves to prop up its burgeoning property-development arm and was looking to borrow more money. The airport last month announced flights to Perth, and earlier this month said it had secured its first ongoing international service beyond Australasia, with flights direct to Bali. According to an airport spokeswoman, a valuation from last year based on "increases in land value, business growth" and Ernst & Young modelling that was done in 2019 valued the airport at $430 million. The $235 million loan is secured by the head lease and the airport's assets. Newcastle council's Newcastle Airport Partnership Company 1 and Port Stephens Council's Newcastle Airport Partnership Company 3 are the guarantors for the loan. The joint Newcastle councillor statement said Newcastle Airport's company structure was unanimously endorsed by council in November 2012 and approved by the then local government minister. "It was specifically designed to allow the airport to raise debt independently of the councils and to protect ratepayers of its two shareholder councils." First-time Port Stephens councillor Mark Watson urged people to focus on the "positives" about the airport. "We are expecting dividends in the near future, providing well-needed funds to inject into our roads and community projects," he said. "The airport loans have zero impact on councils operations and ratepayers funds." Fellow councillor Paul Le Motte was not on council when the refinancing deal was approved. However, he said he was "comfortable with all I have seen and heard" about the airport's finances and any potential impact on council funds. A leading industry expert's legal review of the mortgage document conducted for the Herald identified nine clauses where the councils could potentially be held legally liable for the airport's loan. He said CBA might have agreed in a separate document to limit its recourse not to make the councils legally liable for the airport's loan. The councils must be a party to the agreement for this to occur. City of Newcastle's Mr Bath and Port Stephens Council's Mr Kable signed the mortgage on behalf of the councils in March 2023. At the time when councillors voted to approve the loan deal, they were told the councils would "not be a borrower, guarantor or obligor under the facility agreement" and that each new agreement the councils had to enter into, including the mortgage, consent deed and financier side deed, was due to the councils holding the head lease. When asked if there was anything in the mortgage, consent deed or financier side deed that would prevent the bank from accessing council funds if anything goes wrong at the airport, the councils said the Herald's "questions referred to only some of the documents in the suite of transaction documents". The councils declined when asked to name the document that limited the bank's ability to access ratepayer funds. "The mortgage of the head leases is just one of a suite of commercial in confidence documents that govern the financial arrangements of the airport's loan facility," they said. "Together, these documents limit the financier's recourse in the highly unlikely event of a default. These documents have existed since 2013 and remain in place under the current loan facility, which was supported by both councils in 2023." It's understood Newcastle Airport's legal counsel prepared the mortgage. Several past and present councillors who spoke to the Herald said they were not informed about any potential risk to council funds. They understood that only the airport was on the hook if the debt was called in. Reaction from the airport and councils, including many elected councillors, to the Herald's reporting about the airport's finances has been swift and dismissive. The reporting has faced a chorus of vocal opposition to publicly discredit the information and distance the councils from the airport's business operations, repeatedly pointing to the airport's independent 10-member board as being responsible for decision-making. As previously reported, the council-controlled partnership boards are the ultimate authority at the airport. Any decision worth more than $1 million must be referred to the partnership boards for approval. Newcastle's representatives on the two partnership boards are Mr Bath and deputy lord mayor Callum Pull, who replaced former lord mayor Nuatali Nelmes this year. General manager Tim Crosdale and Labor mayor Leah Anderson represent Port Stephens. At a Newcastle council meeting in March, after councillors were earlier briefed by Newcastle Airport management, Labor's Deahnna Richardson described concerns about the airport's finances as "deliberate misinformation". Cr Richardson was one of many councillors who took aim at Cr Kerridge during the meeting because, days before, he called for an independent inquiry into the matter and refused to hand over a letter he wrote to Local Government Minister Ron Hoenig. Cr Kerridge, who has declared a conflict of interest in relation to the airport and does not attend briefings, said he was concerned about the discrepancies between the Herald's reporting and the official responses from the councils and the airport. Mr Hoenig dismissed the request, citing concern that Cr Kerridge was "unable to assess what the council's financial arrangements are with a company half owned by his council". Cr Liz Adamczyk described having to clarify what she claimed as "misinformation" about the airport's finances as "tedious" and a "waste of our time". She detailed an "incredible amount of work" that had gone into trying to "course correct", responding to what she called untruthful claims "out in the media". "And what we are doing now, I think, is just ridiculous in having to ask questions to again be clarified for the benefit of correcting that misinformation that is coming from the lord mayor and the Herald," she said. Cr Declan Clausen also criticised media reporting on the airport and Cr Kerridge for requesting the investigation. "I'm deeply concerned that the lord mayor expects that NSW taxpayers, or even worse our own ratepayers, should fund an inquiry into an asset that we own based on nothing more than innuendo that has been published in the media that has been fact checked and responded to by the airport, by the audit office, by our own ARIC [Audit, Risk and Improvement] committee, and proven to be untrue," he said. Cr Clausen was asked to identify who did the fact-checking of the reporting and what was proven to be untrue. In response, he said he was "directly responding to the misinformed claims made by the lord mayor regarding the airport". The Herald stands by its reporting, much of which is based on the airport's own internal reports. EXPERTS who reviewed a mortgage document for Newcastle Airport's $235 million loan say both Newcastle and Port Stephens ratepayers could be on the hook for the borrowings, but the councils say the document can not be "relied upon in isolation". The potential risk to ratepayer funds is outlined in a 57-page mortgage document, signed by City of Newcastle chief executive officer Jeremy Bath and Port Stephens Council senior executive Greg Kable in March 2023 and obtained as part of a Newcastle Herald investigation into Newcastle Airport's financial situation. Legal and business law experts consulted by the Herald have identified nine clauses in the publicly available mortgage document that indicate the councils, joint owners of the airport, could be held legally liable for the airport's $235 million Commonwealth Bank loan. In response, airport owners Port Stephens Council and City of Newcastle said in a joint statement earlier this year that the mortgage document could not be "relied upon in isolation to understand the financing arrangements", but declined to elaborate when asked for other relevant documents. In the weeks since the release of the Davidson Review, an independent inquiry into the City of Newcastle's policies, processes and procedures, simmering tensions within the council over the airport have overflowed into a public spat. Labor councillor Declan Clausen has made reference to past comments made by lord mayor Ross Kerridge regarding the financial situation of the airport, accusing the lord mayor of "rewriting history" by deleting past Facebook posts and saying the review showed: "every major decision about the airport was made lawfully, responsibly, and with proper controls and oversight". While not examining the airport's financial situation, the Davidson Review said it was "considered unlikely" that any significant financial risks from the airport would be transferred to the City of Newcastle, without detailing how it came to this conclusion. In the months prior to the review, the Herald had been working to clarify whether ratepayers were exposed to the record $235 million CBA loan facility. When questioned about the possible liability to ratepayers as outlined in the mortgage document, councillors from Newcastle issued what they called an "unprecedented" joint statement. "Councillors were informed in February 2023 that there were a series of legally binding agreements that sat alongside the mortgage of head lease that govern the financial arrangements, including securing the loans against airport assets only, thereby limiting the financier's recourse," the joint statement reads. The councils declined to answer specific questions about clauses in the mortgage that would allow CBA to access council funds if anything goes wrong, and if they are enforceable. They also declined to identify documents that overrule the mortgage to establish that ratepayer funds are off-limits. The airport secured the loan in April 2023 to construct a new international terminal and fund its property development business. While the councils are not parties to the loan or guarantors, they are linked to the deal because they hold the head lease with the Commonwealth for the 28 hectares of land where the airport operates south of Williamtown RAAF Base. The airport can't operate without the lease, so the bank wanted it as security. To ensure the airport could get its $235 million loan, the councils voted unanimously in separate confidential sessions in February 2023 to offer up the head lease as security for the loan. The head lease mortgage document establishes a legal agreement between City of Newcastle, Port Stephens Council, and the CBA. According to the councils, "CBA has confirmed in writing to the airport that the commercial intent of the mortgage of the head leases is limited recourse third party securities". Despite the intent, three experts who reviewed the mortgage said it had the potential to cause heartache for ratepayers if anything goes wrong. When considered in isolation, they said the mortgage gives CBA legal recourse to council funds. Associate Professor Keturah Whitford, dean of staff at the Australian National University's College of Business and Economics, said, "critically, there is nothing in the mortgage which limits the liability of the councils to the realised value of their interests in the airport lease". Professor Whitford, who specialises in business law, reviewed only the mortgage document. She said under the mortgage, the councils agreed to "ensure that no event of default occurs" and to "procure the punctual payment" of the secured money. "While the councils may not be borrowers, guarantors or obligors under the loan facility, the mortgage secures, amongst other things, 'all money which any obligor is or may become actually or contingently liable to pay under or in connection with the finance documents'...," she said. "Further, the council indemnifies the CBA for losses in connection with, among other things, any default." According to the mortgage document, if the airport defaults on a loan payment or interest, the councils could have to pay the money. If CBA cannot recoup money owed from the airport, under the mortgage, the councils have agreed to compensate the bank for any losses, liabilities, costs, expenses and taxes it incurs. Under the mortgage terms, the bank can also enforce its right against the councils before it seeks funds from the airport. If this were to happen, the councils could claim against the airport. It is unknown how much money, if any, the councils could be held responsible for, as the agreement does not put a ceiling on the possible costs. According to the agreement, the councils cannot ask for the mortgage to be discharged until CBA is satisfied that all the secured money has been paid. There is nothing in the mortgage, like a limited recourse provision, to restrict Port Stephens or Newcastle councils' legal liability to the value of the head lease. This means that if the airport could not foot the bill, under the mortgage terms, the councils could have to pay more than the value of the head lease they have mortgaged to settle the airport's debt to CBA. The Herald asked the councils if they were required to ensure there was no default by the airport on its $235 million loan, if the councils were legally liable for the loan or if they had agreed to compensate CBA for any losses, liabilities, costs, expenses and taxes associated with the airport loan. They did not answer the questions. The joint response said the airport entities were independent of the councils regarding legal liability. "As previously explained to the Herald, there are a number of interrelated legal agreements and deeds that reflect the corporate structure of the airport separate to the councils that dictate the operation of the previous loan agreement with ANZ and now with the Commonwealth Bank," it reads. When the Herald asked individual councillors if they knew of any possible risk to ratepayer funds, Newcastle's Labor, Green, Independent, and Liberal councillors joined forces to dispel concerns, minus lord mayor Ross Kerridge and his Independent running mate Peter Gittins. The 11 councillors said they had "independently sought clarity" and "received multiple briefings" about the airport's financial situation. They said the council unanimously endorsed a proposal for the airport to refinance from ANZ to CBA, to increase its loan from $100 million to $235 million at its meeting on 28 February 2023. "The loan is secured solely against the airport's head lease with the Commonwealth Government," the joint statement reads. "This lease is the only security at risk in the unlikely event of a default. This ensures that there is no legal exposure to the councils or to ratepayer funds ... As councillors, we are committed to ensuring governance processes are followed, financial risk is properly understood, and the community is accurately informed." Questions about the mortgage arrangements come after Herald scrutiny of the airport's financial situation revealed the airport was looking to cut staff, had asked Defence to waive its rent, had been in discussions with councils to access a financial injection of up to $40 million, had been diverting millions in cash reserves to prop up its burgeoning property-development arm and was looking to borrow more money. The airport last month announced flights to Perth, and earlier this month said it had secured its first ongoing international service beyond Australasia, with flights direct to Bali. According to an airport spokeswoman, a valuation from last year based on "increases in land value, business growth" and Ernst & Young modelling that was done in 2019 valued the airport at $430 million. The $235 million loan is secured by the head lease and the airport's assets. Newcastle council's Newcastle Airport Partnership Company 1 and Port Stephens Council's Newcastle Airport Partnership Company 3 are the guarantors for the loan. The joint Newcastle councillor statement said Newcastle Airport's company structure was unanimously endorsed by council in November 2012 and approved by the then local government minister. "It was specifically designed to allow the airport to raise debt independently of the councils and to protect ratepayers of its two shareholder councils." First-time Port Stephens councillor Mark Watson urged people to focus on the "positives" about the airport. "We are expecting dividends in the near future, providing well-needed funds to inject into our roads and community projects," he said. "The airport loans have zero impact on councils operations and ratepayers funds." Fellow councillor Paul Le Motte was not on council when the refinancing deal was approved. However, he said he was "comfortable with all I have seen and heard" about the airport's finances and any potential impact on council funds. A leading industry expert's legal review of the mortgage document conducted for the Herald identified nine clauses where the councils could potentially be held legally liable for the airport's loan. He said CBA might have agreed in a separate document to limit its recourse not to make the councils legally liable for the airport's loan. The councils must be a party to the agreement for this to occur. City of Newcastle's Mr Bath and Port Stephens Council's Mr Kable signed the mortgage on behalf of the councils in March 2023. At the time when councillors voted to approve the loan deal, they were told the councils would "not be a borrower, guarantor or obligor under the facility agreement" and that each new agreement the councils had to enter into, including the mortgage, consent deed and financier side deed, was due to the councils holding the head lease. When asked if there was anything in the mortgage, consent deed or financier side deed that would prevent the bank from accessing council funds if anything goes wrong at the airport, the councils said the Herald's "questions referred to only some of the documents in the suite of transaction documents". The councils declined when asked to name the document that limited the bank's ability to access ratepayer funds. "The mortgage of the head leases is just one of a suite of commercial in confidence documents that govern the financial arrangements of the airport's loan facility," they said. "Together, these documents limit the financier's recourse in the highly unlikely event of a default. These documents have existed since 2013 and remain in place under the current loan facility, which was supported by both councils in 2023." It's understood Newcastle Airport's legal counsel prepared the mortgage. Several past and present councillors who spoke to the Herald said they were not informed about any potential risk to council funds. They understood that only the airport was on the hook if the debt was called in. Reaction from the airport and councils, including many elected councillors, to the Herald's reporting about the airport's finances has been swift and dismissive. The reporting has faced a chorus of vocal opposition to publicly discredit the information and distance the councils from the airport's business operations, repeatedly pointing to the airport's independent 10-member board as being responsible for decision-making. As previously reported, the council-controlled partnership boards are the ultimate authority at the airport. Any decision worth more than $1 million must be referred to the partnership boards for approval. Newcastle's representatives on the two partnership boards are Mr Bath and deputy lord mayor Callum Pull, who replaced former lord mayor Nuatali Nelmes this year. General manager Tim Crosdale and Labor mayor Leah Anderson represent Port Stephens. At a Newcastle council meeting in March, after councillors were earlier briefed by Newcastle Airport management, Labor's Deahnna Richardson described concerns about the airport's finances as "deliberate misinformation". Cr Richardson was one of many councillors who took aim at Cr Kerridge during the meeting because, days before, he called for an independent inquiry into the matter and refused to hand over a letter he wrote to Local Government Minister Ron Hoenig. Cr Kerridge, who has declared a conflict of interest in relation to the airport and does not attend briefings, said he was concerned about the discrepancies between the Herald's reporting and the official responses from the councils and the airport. Mr Hoenig dismissed the request, citing concern that Cr Kerridge was "unable to assess what the council's financial arrangements are with a company half owned by his council". Cr Liz Adamczyk described having to clarify what she claimed as "misinformation" about the airport's finances as "tedious" and a "waste of our time". She detailed an "incredible amount of work" that had gone into trying to "course correct", responding to what she called untruthful claims "out in the media". "And what we are doing now, I think, is just ridiculous in having to ask questions to again be clarified for the benefit of correcting that misinformation that is coming from the lord mayor and the Herald," she said. Cr Declan Clausen also criticised media reporting on the airport and Cr Kerridge for requesting the investigation. "I'm deeply concerned that the lord mayor expects that NSW taxpayers, or even worse our own ratepayers, should fund an inquiry into an asset that we own based on nothing more than innuendo that has been published in the media that has been fact checked and responded to by the airport, by the audit office, by our own ARIC [Audit, Risk and Improvement] committee, and proven to be untrue," he said. Cr Clausen was asked to identify who did the fact-checking of the reporting and what was proven to be untrue. In response, he said he was "directly responding to the misinformed claims made by the lord mayor regarding the airport". The Herald stands by its reporting, much of which is based on the airport's own internal reports. EXPERTS who reviewed a mortgage document for Newcastle Airport's $235 million loan say both Newcastle and Port Stephens ratepayers could be on the hook for the borrowings, but the councils say the document can not be "relied upon in isolation". The potential risk to ratepayer funds is outlined in a 57-page mortgage document, signed by City of Newcastle chief executive officer Jeremy Bath and Port Stephens Council senior executive Greg Kable in March 2023 and obtained as part of a Newcastle Herald investigation into Newcastle Airport's financial situation. Legal and business law experts consulted by the Herald have identified nine clauses in the publicly available mortgage document that indicate the councils, joint owners of the airport, could be held legally liable for the airport's $235 million Commonwealth Bank loan. In response, airport owners Port Stephens Council and City of Newcastle said in a joint statement earlier this year that the mortgage document could not be "relied upon in isolation to understand the financing arrangements", but declined to elaborate when asked for other relevant documents. In the weeks since the release of the Davidson Review, an independent inquiry into the City of Newcastle's policies, processes and procedures, simmering tensions within the council over the airport have overflowed into a public spat. Labor councillor Declan Clausen has made reference to past comments made by lord mayor Ross Kerridge regarding the financial situation of the airport, accusing the lord mayor of "rewriting history" by deleting past Facebook posts and saying the review showed: "every major decision about the airport was made lawfully, responsibly, and with proper controls and oversight". While not examining the airport's financial situation, the Davidson Review said it was "considered unlikely" that any significant financial risks from the airport would be transferred to the City of Newcastle, without detailing how it came to this conclusion. In the months prior to the review, the Herald had been working to clarify whether ratepayers were exposed to the record $235 million CBA loan facility. When questioned about the possible liability to ratepayers as outlined in the mortgage document, councillors from Newcastle issued what they called an "unprecedented" joint statement. "Councillors were informed in February 2023 that there were a series of legally binding agreements that sat alongside the mortgage of head lease that govern the financial arrangements, including securing the loans against airport assets only, thereby limiting the financier's recourse," the joint statement reads. The councils declined to answer specific questions about clauses in the mortgage that would allow CBA to access council funds if anything goes wrong, and if they are enforceable. They also declined to identify documents that overrule the mortgage to establish that ratepayer funds are off-limits. The airport secured the loan in April 2023 to construct a new international terminal and fund its property development business. While the councils are not parties to the loan or guarantors, they are linked to the deal because they hold the head lease with the Commonwealth for the 28 hectares of land where the airport operates south of Williamtown RAAF Base. The airport can't operate without the lease, so the bank wanted it as security. To ensure the airport could get its $235 million loan, the councils voted unanimously in separate confidential sessions in February 2023 to offer up the head lease as security for the loan. The head lease mortgage document establishes a legal agreement between City of Newcastle, Port Stephens Council, and the CBA. According to the councils, "CBA has confirmed in writing to the airport that the commercial intent of the mortgage of the head leases is limited recourse third party securities". Despite the intent, three experts who reviewed the mortgage said it had the potential to cause heartache for ratepayers if anything goes wrong. When considered in isolation, they said the mortgage gives CBA legal recourse to council funds. Associate Professor Keturah Whitford, dean of staff at the Australian National University's College of Business and Economics, said, "critically, there is nothing in the mortgage which limits the liability of the councils to the realised value of their interests in the airport lease". Professor Whitford, who specialises in business law, reviewed only the mortgage document. She said under the mortgage, the councils agreed to "ensure that no event of default occurs" and to "procure the punctual payment" of the secured money. "While the councils may not be borrowers, guarantors or obligors under the loan facility, the mortgage secures, amongst other things, 'all money which any obligor is or may become actually or contingently liable to pay under or in connection with the finance documents'...," she said. "Further, the council indemnifies the CBA for losses in connection with, among other things, any default." According to the mortgage document, if the airport defaults on a loan payment or interest, the councils could have to pay the money. If CBA cannot recoup money owed from the airport, under the mortgage, the councils have agreed to compensate the bank for any losses, liabilities, costs, expenses and taxes it incurs. Under the mortgage terms, the bank can also enforce its right against the councils before it seeks funds from the airport. If this were to happen, the councils could claim against the airport. It is unknown how much money, if any, the councils could be held responsible for, as the agreement does not put a ceiling on the possible costs. According to the agreement, the councils cannot ask for the mortgage to be discharged until CBA is satisfied that all the secured money has been paid. There is nothing in the mortgage, like a limited recourse provision, to restrict Port Stephens or Newcastle councils' legal liability to the value of the head lease. This means that if the airport could not foot the bill, under the mortgage terms, the councils could have to pay more than the value of the head lease they have mortgaged to settle the airport's debt to CBA. The Herald asked the councils if they were required to ensure there was no default by the airport on its $235 million loan, if the councils were legally liable for the loan or if they had agreed to compensate CBA for any losses, liabilities, costs, expenses and taxes associated with the airport loan. They did not answer the questions. The joint response said the airport entities were independent of the councils regarding legal liability. "As previously explained to the Herald, there are a number of interrelated legal agreements and deeds that reflect the corporate structure of the airport separate to the councils that dictate the operation of the previous loan agreement with ANZ and now with the Commonwealth Bank," it reads. When the Herald asked individual councillors if they knew of any possible risk to ratepayer funds, Newcastle's Labor, Green, Independent, and Liberal councillors joined forces to dispel concerns, minus lord mayor Ross Kerridge and his Independent running mate Peter Gittins. The 11 councillors said they had "independently sought clarity" and "received multiple briefings" about the airport's financial situation. They said the council unanimously endorsed a proposal for the airport to refinance from ANZ to CBA, to increase its loan from $100 million to $235 million at its meeting on 28 February 2023. "The loan is secured solely against the airport's head lease with the Commonwealth Government," the joint statement reads. "This lease is the only security at risk in the unlikely event of a default. This ensures that there is no legal exposure to the councils or to ratepayer funds ... As councillors, we are committed to ensuring governance processes are followed, financial risk is properly understood, and the community is accurately informed." Questions about the mortgage arrangements come after Herald scrutiny of the airport's financial situation revealed the airport was looking to cut staff, had asked Defence to waive its rent, had been in discussions with councils to access a financial injection of up to $40 million, had been diverting millions in cash reserves to prop up its burgeoning property-development arm and was looking to borrow more money. The airport last month announced flights to Perth, and earlier this month said it had secured its first ongoing international service beyond Australasia, with flights direct to Bali. According to an airport spokeswoman, a valuation from last year based on "increases in land value, business growth" and Ernst & Young modelling that was done in 2019 valued the airport at $430 million. The $235 million loan is secured by the head lease and the airport's assets. Newcastle council's Newcastle Airport Partnership Company 1 and Port Stephens Council's Newcastle Airport Partnership Company 3 are the guarantors for the loan. The joint Newcastle councillor statement said Newcastle Airport's company structure was unanimously endorsed by council in November 2012 and approved by the then local government minister. "It was specifically designed to allow the airport to raise debt independently of the councils and to protect ratepayers of its two shareholder councils." First-time Port Stephens councillor Mark Watson urged people to focus on the "positives" about the airport. "We are expecting dividends in the near future, providing well-needed funds to inject into our roads and community projects," he said. "The airport loans have zero impact on councils operations and ratepayers funds." Fellow councillor Paul Le Motte was not on council when the refinancing deal was approved. However, he said he was "comfortable with all I have seen and heard" about the airport's finances and any potential impact on council funds. A leading industry expert's legal review of the mortgage document conducted for the Herald identified nine clauses where the councils could potentially be held legally liable for the airport's loan. He said CBA might have agreed in a separate document to limit its recourse not to make the councils legally liable for the airport's loan. The councils must be a party to the agreement for this to occur. City of Newcastle's Mr Bath and Port Stephens Council's Mr Kable signed the mortgage on behalf of the councils in March 2023. At the time when councillors voted to approve the loan deal, they were told the councils would "not be a borrower, guarantor or obligor under the facility agreement" and that each new agreement the councils had to enter into, including the mortgage, consent deed and financier side deed, was due to the councils holding the head lease. When asked if there was anything in the mortgage, consent deed or financier side deed that would prevent the bank from accessing council funds if anything goes wrong at the airport, the councils said the Herald's "questions referred to only some of the documents in the suite of transaction documents". The councils declined when asked to name the document that limited the bank's ability to access ratepayer funds. "The mortgage of the head leases is just one of a suite of commercial in confidence documents that govern the financial arrangements of the airport's loan facility," they said. "Together, these documents limit the financier's recourse in the highly unlikely event of a default. These documents have existed since 2013 and remain in place under the current loan facility, which was supported by both councils in 2023." It's understood Newcastle Airport's legal counsel prepared the mortgage. Several past and present councillors who spoke to the Herald said they were not informed about any potential risk to council funds. They understood that only the airport was on the hook if the debt was called in. Reaction from the airport and councils, including many elected councillors, to the Herald's reporting about the airport's finances has been swift and dismissive. The reporting has faced a chorus of vocal opposition to publicly discredit the information and distance the councils from the airport's business operations, repeatedly pointing to the airport's independent 10-member board as being responsible for decision-making. As previously reported, the council-controlled partnership boards are the ultimate authority at the airport. Any decision worth more than $1 million must be referred to the partnership boards for approval. Newcastle's representatives on the two partnership boards are Mr Bath and deputy lord mayor Callum Pull, who replaced former lord mayor Nuatali Nelmes this year. General manager Tim Crosdale and Labor mayor Leah Anderson represent Port Stephens. At a Newcastle council meeting in March, after councillors were earlier briefed by Newcastle Airport management, Labor's Deahnna Richardson described concerns about the airport's finances as "deliberate misinformation". Cr Richardson was one of many councillors who took aim at Cr Kerridge during the meeting because, days before, he called for an independent inquiry into the matter and refused to hand over a letter he wrote to Local Government Minister Ron Hoenig. Cr Kerridge, who has declared a conflict of interest in relation to the airport and does not attend briefings, said he was concerned about the discrepancies between the Herald's reporting and the official responses from the councils and the airport. Mr Hoenig dismissed the request, citing concern that Cr Kerridge was "unable to assess what the council's financial arrangements are with a company half owned by his council". Cr Liz Adamczyk described having to clarify what she claimed as "misinformation" about the airport's finances as "tedious" and a "waste of our time". She detailed an "incredible amount of work" that had gone into trying to "course correct", responding to what she called untruthful claims "out in the media". "And what we are doing now, I think, is just ridiculous in having to ask questions to again be clarified for the benefit of correcting that misinformation that is coming from the lord mayor and the Herald," she said. Cr Declan Clausen also criticised media reporting on the airport and Cr Kerridge for requesting the investigation. "I'm deeply concerned that the lord mayor expects that NSW taxpayers, or even worse our own ratepayers, should fund an inquiry into an asset that we own based on nothing more than innuendo that has been published in the media that has been fact checked and responded to by the airport, by the audit office, by our own ARIC [Audit, Risk and Improvement] committee, and proven to be untrue," he said. Cr Clausen was asked to identify who did the fact-checking of the reporting and what was proven to be untrue. In response, he said he was "directly responding to the misinformed claims made by the lord mayor regarding the airport". The Herald stands by its reporting, much of which is based on the airport's own internal reports. EXPERTS who reviewed a mortgage document for Newcastle Airport's $235 million loan say both Newcastle and Port Stephens ratepayers could be on the hook for the borrowings, but the councils say the document can not be "relied upon in isolation". The potential risk to ratepayer funds is outlined in a 57-page mortgage document, signed by City of Newcastle chief executive officer Jeremy Bath and Port Stephens Council senior executive Greg Kable in March 2023 and obtained as part of a Newcastle Herald investigation into Newcastle Airport's financial situation. Legal and business law experts consulted by the Herald have identified nine clauses in the publicly available mortgage document that indicate the councils, joint owners of the airport, could be held legally liable for the airport's $235 million Commonwealth Bank loan. In response, airport owners Port Stephens Council and City of Newcastle said in a joint statement earlier this year that the mortgage document could not be "relied upon in isolation to understand the financing arrangements", but declined to elaborate when asked for other relevant documents. In the weeks since the release of the Davidson Review, an independent inquiry into the City of Newcastle's policies, processes and procedures, simmering tensions within the council over the airport have overflowed into a public spat. Labor councillor Declan Clausen has made reference to past comments made by lord mayor Ross Kerridge regarding the financial situation of the airport, accusing the lord mayor of "rewriting history" by deleting past Facebook posts and saying the review showed: "every major decision about the airport was made lawfully, responsibly, and with proper controls and oversight". While not examining the airport's financial situation, the Davidson Review said it was "considered unlikely" that any significant financial risks from the airport would be transferred to the City of Newcastle, without detailing how it came to this conclusion. In the months prior to the review, the Herald had been working to clarify whether ratepayers were exposed to the record $235 million CBA loan facility. When questioned about the possible liability to ratepayers as outlined in the mortgage document, councillors from Newcastle issued what they called an "unprecedented" joint statement. "Councillors were informed in February 2023 that there were a series of legally binding agreements that sat alongside the mortgage of head lease that govern the financial arrangements, including securing the loans against airport assets only, thereby limiting the financier's recourse," the joint statement reads. The councils declined to answer specific questions about clauses in the mortgage that would allow CBA to access council funds if anything goes wrong, and if they are enforceable. They also declined to identify documents that overrule the mortgage to establish that ratepayer funds are off-limits. The airport secured the loan in April 2023 to construct a new international terminal and fund its property development business. While the councils are not parties to the loan or guarantors, they are linked to the deal because they hold the head lease with the Commonwealth for the 28 hectares of land where the airport operates south of Williamtown RAAF Base. The airport can't operate without the lease, so the bank wanted it as security. To ensure the airport could get its $235 million loan, the councils voted unanimously in separate confidential sessions in February 2023 to offer up the head lease as security for the loan. The head lease mortgage document establishes a legal agreement between City of Newcastle, Port Stephens Council, and the CBA. According to the councils, "CBA has confirmed in writing to the airport that the commercial intent of the mortgage of the head leases is limited recourse third party securities". Despite the intent, three experts who reviewed the mortgage said it had the potential to cause heartache for ratepayers if anything goes wrong. When considered in isolation, they said the mortgage gives CBA legal recourse to council funds. Associate Professor Keturah Whitford, dean of staff at the Australian National University's College of Business and Economics, said, "critically, there is nothing in the mortgage which limits the liability of the councils to the realised value of their interests in the airport lease". Professor Whitford, who specialises in business law, reviewed only the mortgage document. She said under the mortgage, the councils agreed to "ensure that no event of default occurs" and to "procure the punctual payment" of the secured money. "While the councils may not be borrowers, guarantors or obligors under the loan facility, the mortgage secures, amongst other things, 'all money which any obligor is or may become actually or contingently liable to pay under or in connection with the finance documents'...," she said. "Further, the council indemnifies the CBA for losses in connection with, among other things, any default." According to the mortgage document, if the airport defaults on a loan payment or interest, the councils could have to pay the money. If CBA cannot recoup money owed from the airport, under the mortgage, the councils have agreed to compensate the bank for any losses, liabilities, costs, expenses and taxes it incurs. Under the mortgage terms, the bank can also enforce its right against the councils before it seeks funds from the airport. If this were to happen, the councils could claim against the airport. It is unknown how much money, if any, the councils could be held responsible for, as the agreement does not put a ceiling on the possible costs. According to the agreement, the councils cannot ask for the mortgage to be discharged until CBA is satisfied that all the secured money has been paid. There is nothing in the mortgage, like a limited recourse provision, to restrict Port Stephens or Newcastle councils' legal liability to the value of the head lease. This means that if the airport could not foot the bill, under the mortgage terms, the councils could have to pay more than the value of the head lease they have mortgaged to settle the airport's debt to CBA. The Herald asked the councils if they were required to ensure there was no default by the airport on its $235 million loan, if the councils were legally liable for the loan or if they had agreed to compensate CBA for any losses, liabilities, costs, expenses and taxes associated with the airport loan. They did not answer the questions. The joint response said the airport entities were independent of the councils regarding legal liability. "As previously explained to the Herald, there are a number of interrelated legal agreements and deeds that reflect the corporate structure of the airport separate to the councils that dictate the operation of the previous loan agreement with ANZ and now with the Commonwealth Bank," it reads. When the Herald asked individual councillors if they knew of any possible risk to ratepayer funds, Newcastle's Labor, Green, Independent, and Liberal councillors joined forces to dispel concerns, minus lord mayor Ross Kerridge and his Independent running mate Peter Gittins. The 11 councillors said they had "independently sought clarity" and "received multiple briefings" about the airport's financial situation. They said the council unanimously endorsed a proposal for the airport to refinance from ANZ to CBA, to increase its loan from $100 million to $235 million at its meeting on 28 February 2023. "The loan is secured solely against the airport's head lease with the Commonwealth Government," the joint statement reads. "This lease is the only security at risk in the unlikely event of a default. This ensures that there is no legal exposure to the councils or to ratepayer funds ... As councillors, we are committed to ensuring governance processes are followed, financial risk is properly understood, and the community is accurately informed." Questions about the mortgage arrangements come after Herald scrutiny of the airport's financial situation revealed the airport was looking to cut staff, had asked Defence to waive its rent, had been in discussions with councils to access a financial injection of up to $40 million, had been diverting millions in cash reserves to prop up its burgeoning property-development arm and was looking to borrow more money. The airport last month announced flights to Perth, and earlier this month said it had secured its first ongoing international service beyond Australasia, with flights direct to Bali. According to an airport spokeswoman, a valuation from last year based on "increases in land value, business growth" and Ernst & Young modelling that was done in 2019 valued the airport at $430 million. The $235 million loan is secured by the head lease and the airport's assets. Newcastle council's Newcastle Airport Partnership Company 1 and Port Stephens Council's Newcastle Airport Partnership Company 3 are the guarantors for the loan. The joint Newcastle councillor statement said Newcastle Airport's company structure was unanimously endorsed by council in November 2012 and approved by the then local government minister. "It was specifically designed to allow the airport to raise debt independently of the councils and to protect ratepayers of its two shareholder councils." First-time Port Stephens councillor Mark Watson urged people to focus on the "positives" about the airport. "We are expecting dividends in the near future, providing well-needed funds to inject into our roads and community projects," he said. "The airport loans have zero impact on councils operations and ratepayers funds." Fellow councillor Paul Le Motte was not on council when the refinancing deal was approved. However, he said he was "comfortable with all I have seen and heard" about the airport's finances and any potential impact on council funds. A leading industry expert's legal review of the mortgage document conducted for the Herald identified nine clauses where the councils could potentially be held legally liable for the airport's loan. He said CBA might have agreed in a separate document to limit its recourse not to make the councils legally liable for the airport's loan. The councils must be a party to the agreement for this to occur. City of Newcastle's Mr Bath and Port Stephens Council's Mr Kable signed the mortgage on behalf of the councils in March 2023. At the time when councillors voted to approve the loan deal, they were told the councils would "not be a borrower, guarantor or obligor under the facility agreement" and that each new agreement the councils had to enter into, including the mortgage, consent deed and financier side deed, was due to the councils holding the head lease. When asked if there was anything in the mortgage, consent deed or financier side deed that would prevent the bank from accessing council funds if anything goes wrong at the airport, the councils said the Herald's "questions referred to only some of the documents in the suite of transaction documents". The councils declined when asked to name the document that limited the bank's ability to access ratepayer funds. "The mortgage of the head leases is just one of a suite of commercial in confidence documents that govern the financial arrangements of the airport's loan facility," they said. "Together, these documents limit the financier's recourse in the highly unlikely event of a default. These documents have existed since 2013 and remain in place under the current loan facility, which was supported by both councils in 2023." It's understood Newcastle Airport's legal counsel prepared the mortgage. Several past and present councillors who spoke to the Herald said they were not informed about any potential risk to council funds. They understood that only the airport was on the hook if the debt was called in. Reaction from the airport and councils, including many elected councillors, to the Herald's reporting about the airport's finances has been swift and dismissive. The reporting has faced a chorus of vocal opposition to publicly discredit the information and distance the councils from the airport's business operations, repeatedly pointing to the airport's independent 10-member board as being responsible for decision-making. As previously reported, the council-controlled partnership boards are the ultimate authority at the airport. Any decision worth more than $1 million must be referred to the partnership boards for approval. Newcastle's representatives on the two partnership boards are Mr Bath and deputy lord mayor Callum Pull, who replaced former lord mayor Nuatali Nelmes this year. General manager Tim Crosdale and Labor mayor Leah Anderson represent Port Stephens. At a Newcastle council meeting in March, after councillors were earlier briefed by Newcastle Airport management, Labor's Deahnna Richardson described concerns about the airport's finances as "deliberate misinformation". Cr Richardson was one of many councillors who took aim at Cr Kerridge during the meeting because, days before, he called for an independent inquiry into the matter and refused to hand over a letter he wrote to Local Government Minister Ron Hoenig. Cr Kerridge, who has declared a conflict of interest in relation to the airport and does not attend briefings, said he was concerned about the discrepancies between the Herald's reporting and the official responses from the councils and the airport. Mr Hoenig dismissed the request, citing concern that Cr Kerridge was "unable to assess what the council's financial arrangements are with a company half owned by his council". Cr Liz Adamczyk described having to clarify what she claimed as "misinformation" about the airport's finances as "tedious" and a "waste of our time". She detailed an "incredible amount of work" that had gone into trying to "course correct", responding to what she called untruthful claims "out in the media". "And what we are doing now, I think, is just ridiculous in having to ask questions to again be clarified for the benefit of correcting that misinformation that is coming from the lord mayor and the Herald," she said. Cr Declan Clausen also criticised media reporting on the airport and Cr Kerridge for requesting the investigation. "I'm deeply concerned that the lord mayor expects that NSW taxpayers, or even worse our own ratepayers, should fund an inquiry into an asset that we own based on nothing more than innuendo that has been published in the media that has been fact checked and responded to by the airport, by the audit office, by our own ARIC [Audit, Risk and Improvement] committee, and proven to be untrue," he said. Cr Clausen was asked to identify who did the fact-checking of the reporting and what was proven to be untrue. In response, he said he was "directly responding to the misinformed claims made by the lord mayor regarding the airport". The Herald stands by its reporting, much of which is based on the airport's own internal reports.

The Advertiser

11-06-2025

• The Advertiser

Power up: Newcastle almost triples public electric vehicle charging network

NEWCASTLE has almost tripled its public electric vehicle charging network, with 34 new charging ports being rolled out across the city. The new charges, many of which have already been powered up, are at Lambton, Wallsend, Hamilton, Stockton, Adamstown, Mayfield, Newcastle, Newcastle East and Wickham. Further chargers are set to come online at Beresfield and Georgetown in the coming weeks. City of Newcastle Planning and Environment executive director Michelle Bisson said the chargers would benefit the growing number of EV drivers and encourage others to make the switch. "The signs are already encouraging, with more than 1350 EVs currently registered in Newcastle, a number which has risen by more than 1000 per cent in the past four years," she said. "One of the challenges, however, is that many drivers lack access to off-street parking to charge an EV. "Increasing the availability of public chargers in different suburbs is an important step in achieving our goal of driving EV uptake and creating a cleaner, quieter and lower emissions city." The council's goal is to have 52 per cent of all new car registrations be EVs by 2030-31. A $270,000 state government grant has helped co-fund the installation of the chargers. Minister for the Hunter Yasmin Catley said the state government had approved $4.1 million in co-funding to install 671 charging ports across 16 local government areas, including Newcastle. "Investing in EV charging infrastructure is about making sure Newcastle is keeping up with the growing demand for electric vehicles," she said. "It's not just about future-proofing our energy grid, it's also about making everyday travel easier and more accessible for everyone. "Having more charging points across Newcastle means people can drive with confidence, knowing they'll have the support they need to charge up and get where they need to go." The 34 new chargers add to existing infrastructure at Wharf Road, No.2 Sportsground, Laman Street and Perkins Street in the CBD. City of Newcastle Strategy and Innovation Strategic Advisory Committee chair, councillor Declan Clausen, said tripling the number of public EV chargers was an "important step" to transitioning the city to net-zero emissions. "These new chargers are strategically located within key local centres to support economic activity and benefit local businesses," he said. "They will be powered by 100 per cent renewable energy that comes from a combination of our Summerhill Solar Farm and an existing power purchase agreement with the Sapphire wind farm." Newcastle now has 50 ports at 15 locations in the city. NEWCASTLE has almost tripled its public electric vehicle charging network, with 34 new charging ports being rolled out across the city. The new charges, many of which have already been powered up, are at Lambton, Wallsend, Hamilton, Stockton, Adamstown, Mayfield, Newcastle, Newcastle East and Wickham. Further chargers are set to come online at Beresfield and Georgetown in the coming weeks. City of Newcastle Planning and Environment executive director Michelle Bisson said the chargers would benefit the growing number of EV drivers and encourage others to make the switch. "The signs are already encouraging, with more than 1350 EVs currently registered in Newcastle, a number which has risen by more than 1000 per cent in the past four years," she said. "One of the challenges, however, is that many drivers lack access to off-street parking to charge an EV. "Increasing the availability of public chargers in different suburbs is an important step in achieving our goal of driving EV uptake and creating a cleaner, quieter and lower emissions city." The council's goal is to have 52 per cent of all new car registrations be EVs by 2030-31. A $270,000 state government grant has helped co-fund the installation of the chargers. Minister for the Hunter Yasmin Catley said the state government had approved $4.1 million in co-funding to install 671 charging ports across 16 local government areas, including Newcastle. "Investing in EV charging infrastructure is about making sure Newcastle is keeping up with the growing demand for electric vehicles," she said. "It's not just about future-proofing our energy grid, it's also about making everyday travel easier and more accessible for everyone. "Having more charging points across Newcastle means people can drive with confidence, knowing they'll have the support they need to charge up and get where they need to go." The 34 new chargers add to existing infrastructure at Wharf Road, No.2 Sportsground, Laman Street and Perkins Street in the CBD. City of Newcastle Strategy and Innovation Strategic Advisory Committee chair, councillor Declan Clausen, said tripling the number of public EV chargers was an "important step" to transitioning the city to net-zero emissions. "These new chargers are strategically located within key local centres to support economic activity and benefit local businesses," he said. "They will be powered by 100 per cent renewable energy that comes from a combination of our Summerhill Solar Farm and an existing power purchase agreement with the Sapphire wind farm." Newcastle now has 50 ports at 15 locations in the city. NEWCASTLE has almost tripled its public electric vehicle charging network, with 34 new charging ports being rolled out across the city. The new charges, many of which have already been powered up, are at Lambton, Wallsend, Hamilton, Stockton, Adamstown, Mayfield, Newcastle, Newcastle East and Wickham. Further chargers are set to come online at Beresfield and Georgetown in the coming weeks. City of Newcastle Planning and Environment executive director Michelle Bisson said the chargers would benefit the growing number of EV drivers and encourage others to make the switch. "The signs are already encouraging, with more than 1350 EVs currently registered in Newcastle, a number which has risen by more than 1000 per cent in the past four years," she said. "One of the challenges, however, is that many drivers lack access to off-street parking to charge an EV. "Increasing the availability of public chargers in different suburbs is an important step in achieving our goal of driving EV uptake and creating a cleaner, quieter and lower emissions city." The council's goal is to have 52 per cent of all new car registrations be EVs by 2030-31. A $270,000 state government grant has helped co-fund the installation of the chargers. Minister for the Hunter Yasmin Catley said the state government had approved $4.1 million in co-funding to install 671 charging ports across 16 local government areas, including Newcastle. "Investing in EV charging infrastructure is about making sure Newcastle is keeping up with the growing demand for electric vehicles," she said. "It's not just about future-proofing our energy grid, it's also about making everyday travel easier and more accessible for everyone. "Having more charging points across Newcastle means people can drive with confidence, knowing they'll have the support they need to charge up and get where they need to go." The 34 new chargers add to existing infrastructure at Wharf Road, No.2 Sportsground, Laman Street and Perkins Street in the CBD. City of Newcastle Strategy and Innovation Strategic Advisory Committee chair, councillor Declan Clausen, said tripling the number of public EV chargers was an "important step" to transitioning the city to net-zero emissions. "These new chargers are strategically located within key local centres to support economic activity and benefit local businesses," he said. "They will be powered by 100 per cent renewable energy that comes from a combination of our Summerhill Solar Farm and an existing power purchase agreement with the Sapphire wind farm." Newcastle now has 50 ports at 15 locations in the city. NEWCASTLE has almost tripled its public electric vehicle charging network, with 34 new charging ports being rolled out across the city. The new charges, many of which have already been powered up, are at Lambton, Wallsend, Hamilton, Stockton, Adamstown, Mayfield, Newcastle, Newcastle East and Wickham. Further chargers are set to come online at Beresfield and Georgetown in the coming weeks. City of Newcastle Planning and Environment executive director Michelle Bisson said the chargers would benefit the growing number of EV drivers and encourage others to make the switch. "The signs are already encouraging, with more than 1350 EVs currently registered in Newcastle, a number which has risen by more than 1000 per cent in the past four years," she said. "One of the challenges, however, is that many drivers lack access to off-street parking to charge an EV. "Increasing the availability of public chargers in different suburbs is an important step in achieving our goal of driving EV uptake and creating a cleaner, quieter and lower emissions city." The council's goal is to have 52 per cent of all new car registrations be EVs by 2030-31. A $270,000 state government grant has helped co-fund the installation of the chargers. Minister for the Hunter Yasmin Catley said the state government had approved $4.1 million in co-funding to install 671 charging ports across 16 local government areas, including Newcastle. "Investing in EV charging infrastructure is about making sure Newcastle is keeping up with the growing demand for electric vehicles," she said. "It's not just about future-proofing our energy grid, it's also about making everyday travel easier and more accessible for everyone. "Having more charging points across Newcastle means people can drive with confidence, knowing they'll have the support they need to charge up and get where they need to go." The 34 new chargers add to existing infrastructure at Wharf Road, No.2 Sportsground, Laman Street and Perkins Street in the CBD. City of Newcastle Strategy and Innovation Strategic Advisory Committee chair, councillor Declan Clausen, said tripling the number of public EV chargers was an "important step" to transitioning the city to net-zero emissions. "These new chargers are strategically located within key local centres to support economic activity and benefit local businesses," he said. "They will be powered by 100 per cent renewable energy that comes from a combination of our Summerhill Solar Farm and an existing power purchase agreement with the Sapphire wind farm." Newcastle now has 50 ports at 15 locations in the city.

The Advertiser

09-06-2025

• The Advertiser

City of Newcastle spends $12m on Wollongong property

CITY of Newcastle has entered the Wollongong property market, snapping up a $12 million property in the Illawarra. The council fought off interest from more than 140 registered parties to buy the Sonic HealthPlus site at 21-23 Denison Street, Wollongong. The property is fully leased to subsidiaries of Sonic Healthcare, Illawarra Radiology Group and Sonic HealthPlus. It's City of Newcastle's second unusual property purchase in recent weeks - in late April, it bought a Bunnings site at Taree. So why is Newcastle council buying a hardware store and a Wollongong health facility? It's about investing in the future - quite literally, the council says. The purchases are part of what the council calls its Future Fund strategy, where surplus funds are used to buy the properties and benefit from the financial returns via rents and leases. A City of Newcastle spokesperson said the money raised for the Future Fund is to be used to maintain council infrastructure. "The Future Fund is acquiring appropriate commercial properties as an additional investment opportunity because they offer inflation protection and stable returns, allowing City of Newcastle to diversify its revenue base to cater for both the growing population and ageing assets," the spokesperson said. "The Future Fund allows us to increase investment of our cash reserves into a diverse portfolio of land, buildings and City of Newcastle's commercial operations. "The Wollongong purchase was vetted by City of Newcastle's Future Fund Governance Committee in line with its adopted investment strategy and follows the review of more than 20 properties during the past 12 months." The SonicHealth facility is the only Wollongong property owned by the City of Newcastle. It's a different approach compared to Wollongong City Council, which doesn't seem to be looking into the Newcastle property market. According to the most recent investment report released by Wollongong council, it prefers to invest its surplus money with banks and managed funds. The report shows it has $176 million invested in various funds and trusts with maturity dates years in the future. CITY of Newcastle has entered the Wollongong property market, snapping up a $12 million property in the Illawarra. The council fought off interest from more than 140 registered parties to buy the Sonic HealthPlus site at 21-23 Denison Street, Wollongong. The property is fully leased to subsidiaries of Sonic Healthcare, Illawarra Radiology Group and Sonic HealthPlus. It's City of Newcastle's second unusual property purchase in recent weeks - in late April, it bought a Bunnings site at Taree. So why is Newcastle council buying a hardware store and a Wollongong health facility? It's about investing in the future - quite literally, the council says. The purchases are part of what the council calls its Future Fund strategy, where surplus funds are used to buy the properties and benefit from the financial returns via rents and leases. A City of Newcastle spokesperson said the money raised for the Future Fund is to be used to maintain council infrastructure. "The Future Fund is acquiring appropriate commercial properties as an additional investment opportunity because they offer inflation protection and stable returns, allowing City of Newcastle to diversify its revenue base to cater for both the growing population and ageing assets," the spokesperson said. "The Future Fund allows us to increase investment of our cash reserves into a diverse portfolio of land, buildings and City of Newcastle's commercial operations. "The Wollongong purchase was vetted by City of Newcastle's Future Fund Governance Committee in line with its adopted investment strategy and follows the review of more than 20 properties during the past 12 months." The SonicHealth facility is the only Wollongong property owned by the City of Newcastle. It's a different approach compared to Wollongong City Council, which doesn't seem to be looking into the Newcastle property market. According to the most recent investment report released by Wollongong council, it prefers to invest its surplus money with banks and managed funds. The report shows it has $176 million invested in various funds and trusts with maturity dates years in the future. CITY of Newcastle has entered the Wollongong property market, snapping up a $12 million property in the Illawarra. The council fought off interest from more than 140 registered parties to buy the Sonic HealthPlus site at 21-23 Denison Street, Wollongong. The property is fully leased to subsidiaries of Sonic Healthcare, Illawarra Radiology Group and Sonic HealthPlus. It's City of Newcastle's second unusual property purchase in recent weeks - in late April, it bought a Bunnings site at Taree. So why is Newcastle council buying a hardware store and a Wollongong health facility? It's about investing in the future - quite literally, the council says. The purchases are part of what the council calls its Future Fund strategy, where surplus funds are used to buy the properties and benefit from the financial returns via rents and leases. A City of Newcastle spokesperson said the money raised for the Future Fund is to be used to maintain council infrastructure. "The Future Fund is acquiring appropriate commercial properties as an additional investment opportunity because they offer inflation protection and stable returns, allowing City of Newcastle to diversify its revenue base to cater for both the growing population and ageing assets," the spokesperson said. "The Future Fund allows us to increase investment of our cash reserves into a diverse portfolio of land, buildings and City of Newcastle's commercial operations. "The Wollongong purchase was vetted by City of Newcastle's Future Fund Governance Committee in line with its adopted investment strategy and follows the review of more than 20 properties during the past 12 months." The SonicHealth facility is the only Wollongong property owned by the City of Newcastle. It's a different approach compared to Wollongong City Council, which doesn't seem to be looking into the Newcastle property market. According to the most recent investment report released by Wollongong council, it prefers to invest its surplus money with banks and managed funds. The report shows it has $176 million invested in various funds and trusts with maturity dates years in the future. CITY of Newcastle has entered the Wollongong property market, snapping up a $12 million property in the Illawarra. The council fought off interest from more than 140 registered parties to buy the Sonic HealthPlus site at 21-23 Denison Street, Wollongong. The property is fully leased to subsidiaries of Sonic Healthcare, Illawarra Radiology Group and Sonic HealthPlus. It's City of Newcastle's second unusual property purchase in recent weeks - in late April, it bought a Bunnings site at Taree. So why is Newcastle council buying a hardware store and a Wollongong health facility? It's about investing in the future - quite literally, the council says. The purchases are part of what the council calls its Future Fund strategy, where surplus funds are used to buy the properties and benefit from the financial returns via rents and leases. A City of Newcastle spokesperson said the money raised for the Future Fund is to be used to maintain council infrastructure. "The Future Fund is acquiring appropriate commercial properties as an additional investment opportunity because they offer inflation protection and stable returns, allowing City of Newcastle to diversify its revenue base to cater for both the growing population and ageing assets," the spokesperson said. "The Future Fund allows us to increase investment of our cash reserves into a diverse portfolio of land, buildings and City of Newcastle's commercial operations. "The Wollongong purchase was vetted by City of Newcastle's Future Fund Governance Committee in line with its adopted investment strategy and follows the review of more than 20 properties during the past 12 months." The SonicHealth facility is the only Wollongong property owned by the City of Newcastle. It's a different approach compared to Wollongong City Council, which doesn't seem to be looking into the Newcastle property market. According to the most recent investment report released by Wollongong council, it prefers to invest its surplus money with banks and managed funds. The report shows it has $176 million invested in various funds and trusts with maturity dates years in the future.