Report No. 1.

Airspace over the Road Reserve Usage

Executive Manager: Corporate Management

File No: BEN400000/#954745

Property Procurement & Contracts

On 12 November 2009, after considering a report title “PLANNING 10.2008.742.1 Great Northern Hotel 35-43 Jonson St Byron Bay, Council resolved Resolution 09-951, in part:

1. That Council receive a further report on consent condition 49 regarding the lease value, terms and conditions for part of the public road reserve to be occupied by the proponents proposed balcony.

3. That any other air space usage in Byron Bay be reviewed for consistency with lease/licence arrangements.

This report summarises the current position of lease arrangements in Byron Bay and recommends that Council undertake an audit of structures occupying the airspace over the public road reserve that have an approved use associated with commercial operations under the Environmental Planning and Assessment Act.

RECOMMENDATION[m3] :

1. That Council undertake an audit of structures occupying the airspace over the public road reserve that have an approved use under the Environmental Planning and Assessment Act associated with commercial uses.

2. That a draft policy in relation to leasing of airspace used for commercial usage be prepared.

3. That Council receive a report on the outcomes of the audit and draft policy for further consideration.

Report

At its Ordinary Meeting of 12 November 2009 Council considered a report PLANNING 10.2008.742.1 Great Northern Hotel and resolved [09-951]:

1. That Council receive a further report on consent condition 49 regarding the lease value, terms and conditions for part of the public road reserve to be occupied by the proponents proposed balcony.

2. That the Great Northern footpath area licence/lease be reviewed to increase the width of public access by reducing the 3m dining area to 2m and extending the area of lease to accommodate the approved tables and chair numbers to provide necessary public access.

3. That any other air space usage in Byron Bay be reviewed for consistency with lease/licence arrangements.

This report deals with parts 1 and 3 of resolution [09-951]. Resolution part 2 will be the subject of a further report to Council, once a policy position regarding the terms and conditions and lease values has been adopted by Council.

In relation to part 3 of the resolution “That any other air space usage in Byron Bay be reviewed for consistency with lease/licence arrangements” a brief desktop review was undertaken of a number of commercial premises with balconies constructed in the road reserve. This review revealed inconsistencies in that;

(a) Council has one current lease for balconies occupying airspace over the public road reserve, and

(b) there are commercial premises with balconies constructed in the Shire, that have development consents that do not require tenure arrangements with Council for occupation of the airspace over the road reserve.

Considerations Moving Forward

As commercial uses for balconies vary, the lease fee would be dependent on proposed use. For example, a balcony adjoining retail shop space would attract a significantly different market value to a balcony adjoining commercial office space.

In addition to the proposed use affecting lease fees, the lease term would also impact upon the attainable lease fee. The Roads Act 1993 provides for that a term for lease of airspace, together with any option to renew, must not exceed 99 years. Any lease term of more than 3 years however must be registered. This would incur legal and registration costs. To extend the term of lease over 5 years, a subdivision of the land would be required. In the case of airspace, a subdivision and registration as a stratum would be required. The costs involved in this process can range from $5,000 to $10,000.

In relation to the terms and conditions for lease, Section149 of the Roads Act 1993 provides that the Roads Authority may lease the air space above the surface of any public road owned by the authority, only with the approval of the Director of Planning.

The Director of Planning must not approve a lease inconsistent with the rights of passage and access that exist with respect to the road. Section 149 of the Roads Act is contained in the Statutory and Policy Compliance Implications of this report.

Recommendation

In order to ensure a consistent approach to assessment and lease of both existing and future use of public road reserve this report recommends:

1. That staff undertake an audit of existing commercial structures in public road reserve in Byron Bay; and

2. That staff prepare a draft policy in relation to leasing of airspace above the road reserve for Commercial Uses.

and provide a further report back with the outcomes of the audit together with a draft policy for Council’s consideration.

History

After considering a report entitled “Leasing of Airspace” at its Ordinary Meeting dated 16 May 2000 Council resolved in part [00-359] “That staff prepare a policy for consideration by Council the future leasing of airspace over public roads”.

A draft policy was researched, prepared and provided to Council on 19 February 2002. Council resolved [02-74] “…advertise the draft airspace leasing policy…for public comment for 28 days.”

The draft policy was advertised on 6 June 2002. No submissions were received in response to the advertising. However, during the advertising period a number of issues were further investigated, prompted by concerns about the length of the proposed leases:

i. The possibility of requiring an airspace lease retrospectively

ii. Possible methods of determining an appropriate lease fee

iii. Whether an airspace lease would be required for all structures constructed over a footpath (that is, would an airspace lease be required for awnings, or only for usable space such as a deck or verandah)

iv. The legality of the lease term proposed by the policy

v. Required authorisation for airspace leases

As a result of those investigations the draft policy was redrafted to provide a more comprehensive approach. That revised draft was presented back to Council at its meeting of 28 June 2005, with a recommendation to place the draft amended “Leasing of Airspace Policy” on public exhibition for a period of 28 days.

At its Ordinary Meeting of 28 June 2005, Council resolved [05-475]:

That Council abandons any further development on the Policy- Leasing of Airspace.”

Financial Implications[m4]

Minimal in regard to the recommendation. The audit and the preparation of the draft Policy and the report to Council could be undertaken using exisiting resources.

Statutory and Policy Compliance Implications[m5]

Council have the power, with the consent of the Director of Planning, to issue the proposed lease under Section 149 of the Roads Act. There are no requirements to provide public notice of an intention to issue a lease for land above the surface of a road.

Under sections 23F and 23G Conveyancing Act 1919, a lease for more than 5 years including any option of renewal must be defined as a lot in a current registered plan. Further a lease for less than 5 years must be defined as a lot in a current registered plan if the parties require the lease to be registered.

Therefore if the proposed lease is to be longer than 5 years, or less than 5 years but registered, a strata subdivision of the road reserve would be required to create a lot in a strata plan for identification purposes for the lease. Strata subdivision of a road reserve is permissible under s259 of the Roads Act.

Roads Act 1993

149 Leasing of land above or below public road

(1) A roads authority may lease the air space above, or land below the surface of, any public road (other than a Crown road) that is owned by the authority.

(2) Such a lease may not be granted by a roads authority other than the RTA except with the approval of the Director of Planning.

(3) The Director of Planning must not approve a lease in respect of a public road if the granting of the lease would be inconsistent with the rights of passage and access that exist with respect to the road.

(4) The term of a lease, together with any option to renew, must not exceed 99 years.

259 Exercise of certain functions may be limited to stratum

Any function that may be exercised under this Act with respect to land may be restricted to:

(a) land down to a specified depth below the surface of the land, or

(b) airspace up to a specified height above the surface of the land, or

(d) airspace between specified heights above the surface of the land, or

(e) land and airspace between a specified depth below, and a specified height above, the surface of the land.

Conveyancing Act 1919

23F Certain transactions to refer to lots shown on current plan

(1) This section applies to the following transactions:

(a) the conveyance or transfer of part of an existing lot,

(b) the lease of part of an existing lot,

(d) the partition of an existing lot.

(2) The Registrar-General may refuse to register a transaction to which this section applies unless:

(a) the land to which the transaction relates is shown on a current plan, and

(b) the boundaries of each part into which the land is divided as a result of the transaction follow the boundaries of an existing lot.

23G Exceptions to sec 23F

Section 23F does not apply to the following transactions:

(d) a transaction that comprises:

(i) the lease of part of an existing lot for a period that, including the period of any option to renew, does not exceed 5 years, or

(ii) the transfer, conveyance, sublease, variation or mortgage of a leasehold interest so created,

(e) a transaction that comprises:

(i) the lease of the whole or any part of a building, or

(ii) the transfer, conveyance, sublease, variation or mortgage of a leasehold interest so created,