A private education company working with Launceston City Council on a $90 million CBD creative precinct has been kicked out of its premises for failing to pay rent.
- The landlord has taken possession of the Foundry site in Launceston
- Foundry is a key part of Launceston City Council’s $90m creative precinct development
- Lawyers say Foundry has provided no evidence of hardship needed to rely on coronavirus eviction protections, but the school’s director disputes this
Information obtained by the ABC shows Foundry is $83,614 behind on its rental payments for its Cameron Street facility, and has not made any payments for more than seven months.
Staff who arrived for work on Wednesday were greeted with a sign at the door saying “the property owner has re-entered and taken back possession of this property as at 4 November 2020”.
It is understood the landlord has taken back possession of the property multiple times since 2017, and has now changed the locks.
Foundry, which also has a campus in Hobart, has been touted as the centrepiece of Launceston’s proposed $90 million creative precinct project, which was announced in June.
Foundry director Chris Billing also the sole director of Creative Property Holdings, the company behind the precinct. The project also includes a bus exchange.
The Federal Government has awarded the Launceston City Council a $10m drought recovery grant specifically to help build the creative precinct.
But a Launceston City Council spokesman told the ABC it was not true the federal government funding would assist with building Creative Property Holdings’ proposal, despite inviting Mr Billing to appear at a press conference announcing the funding and the company’s inclusion in media releases associated with the project.
Mayor Albert van Zetten said the council had been in contact with Foundry about its eviction.
“In respect to the Creative Industries Precinct, the council is dealing with Creative Holdings Pty Ltd and their financiers,” Mr van Zetten said.
“The council remains confident that the external funding commitments are in place, however we will be seeking further assurances from the entities involved.
“The council has legal protections in place around its ability to develop a bus interchange on the site and remains committed to this project.”
Earlier this year the ABC revealed Foundry staff had not paid staff, and had not properly paid superannuation for several years.
‘No evidence’ for coronavirus rental protections: lawyers
There are protections against eviction for commercial tenants suffering hardship due to the coronavirus pandemic.
However, lawyers acting for the owner of the Cameron Street property have written to Foundry saying no evidence has been provided to show it is eligible for those protections.
“More particularly, you have supplied no evidence that the company, as tenant, is entitled under the JobKeeper Rules and is an SME entity for the purpose of the economic response package legislation,” the letter from law firm FitzGerald and Browne said.
“Demonstrating the company’s entitlement for a JobKeeper payment or its qualification for the JobKeeper Scheme would have been a simple process.
“But you have chosen to ignore my correspondence.”
The letter said requests for financial information from Foundry had been made, but the company had refused to provide it.
It asked Foundry to get in touch to discuss the removal of its possessions from the building, and said continued tenancy could be negotiated on the basis that six months’ rent was paid in advance and three months’ rent was held by the real estate agent as a bond.
“The tenancy cannot be leased to you until a fresh lease is signed by the tenant and guarantor,” the letter said.
Mr Billing said Foundry was eligible for JobKeeper and that he had provided proof to the landlord’s lawyer.
He said the media attention on the issue was “highly inappropriate” and he expected no further coverage.
“So many businesses are going through difficult times at the moment and, just like us, are working through these matters with their landlords under the coronavirus tenancy protection legislation,” Mr Billing said.
“I have to ask why we have been singled out of the thousands of businesses going through these difficult times and the rental relief process.
“This inappropriate media attention places undue stress on students who have already had a difficult year and are heading into their end of year assessments, and the hard working staff of Foundry.”