A “positive outcome for all” has been achieved with Cairns Council announcing the purchase of Pelathon’s Courthouse Hotel – just bought from Lantern Hotel Group.
Lantern listed the Hotel for sale back in June, executing an Expressions of Interest campaign through CBRE Hotels. The ASX-listed Lantern announced contracts for its sale to Pelathon in late July for $6.25 million.
But shortly before completion, Cairns Council made an impromptu announcement around plans to turn the building into part of its community cultural and arts precinct, and its “right to acquire the property”.
Lantern issued a ‘stay tuned’ announcement through the ASX, noting it had “not received any formal notification” from Council regarding the proposal.
Council responded to PubTIC, referencing a meeting on the closing day of the EOI process where it determined to buy the property, and the subsequent submission of its intentions.
Despite the uncertainty, the sale was completed on 7 November and Jaz Mooney’s Pelathon Management Group took the keys to the historic Cairns Hotel, which was once the city’s courthouse.
But Council’s plans were not swayed by the change of ownership, and it pursued notions of a compulsory acquisition of the newly-acquired pub. All parties involved were hesitant to provide details or comment on the unique situation.
Now, after further negotiation, the Courthouse Hotel has been sold again, this time by Pelathon to Cairns Council, for $5.75 million.
The deal relates to the Hotel structure and operation, but not its 35 EGMs. Mayor Bob Manning announced that Pelathon will be allowed to continue operation in the short-term, while Council “masterplan this precinct”.
“We are very pleased that this process has been finalised under amiable circumstances and in the best interest of the community.”
The arrangement represents a solution for Council, which by law would not be permitted to own EGMs, and a compensatory outcome for Pelathon, which may yet move the EGMs to another location or divest them with Queensland regulators.
The Queensland system dictates that surrendered EGMs are sold at market rate, on a first-in-first-out basis. Should Pelathon decide to invest, their machines will join any existing queue and be sold in due course.
The going rate for such EGMs in the Queensland market is around $70k each, and under the law Government retains one third of the sale revenue. This could equate to value in the region of $1.6m for Pelathon, offsetting the shortfall and loss of opportunity at the Courthouse.
PubTIC was unable to make contact with Jaz Mooney prior to publication.
