Falls Creek Resort Management Property and Leasing Workshop 16 September 2010

1. Falls Creek Resort Management Property and Leasing Workshop 16 September 2010

2. Falls Creek Leases Leasing in Falls Creek and all Victorian Alpine Resorts is administered in accordance with the: “Alpine Resorts Leasing Policy 2002” Government document designed to provide a consistent and transparent framework for the Leasing of Crown Land. All FCRM policies and procedures are developed in accordance with the intent of this overarching policy. The policy provides for existing lessees to be offered the first right to negotiate a new lease.

3. Falls Creek Leases • Lease types presently in place • Original SEC lease • Alpine Resorts Commission Lease • Current standard Alpine Lease as per current Act

4. New lease process 43% of current leases have remnant lease term < 10 years 32 leases with term > 30 years (up from 22 in Sep 2009) 5 leases in final stages prior to execution. FCRM in discussions with 30 Lessees Lease Terms Falls Creek

5. Leasing Process Applicant Enquiry • Documentation required for proposal review: • Application Form • Company Constitution • Company ASIC extract • A list of all parties with a vested interest in the property • Public Liability Insurance • Building Valuation • Business Plan • Essential Services Report • Building Code of Australia Report • Design & Siting Guideline Report • Landscape Management Plan • Bushfire Risk Assessment Report FCRM review information provided and prepare recommendation paper for the Planning & Land Management (PLM) Committee for review / consideration. Directed to www.fallscreek.com/corporate/leasing for forms and information. Invitation to meet with FCRM to discuss process / proposal. PLM Committee recommendation provided to FCARMB for consideration/ approval Request for Approval in Principle (AIP) provided to Minister for consent. Site Val & Lease Plan required to be submitted with AIP request. Draft Lease document generated by Board’s solicitors and provided to Applicant for review Lease document finalised and provided to Applicant for execution with Deed of Surrender of existing Lease Lease forwarded to Minister for Approval Lease documents issued to Board’s Solicitors Lease executed by CEO on behalf of Board Board’s solicitors issue Lease documents to Land Victoria for registration Copy of registered Lease provided to FCRM and the Applicant

6. Assessment Requirements REPORTS • Building Code of Australia FCRM Policy (Implemented September 2007) • Australian Standard 3959 Bushfire Risk Assessment FCRM Policy (Implemented September 2007) • FCRM Design and Siting Guidelines (2004) • Landscape Plan in accordance with FCRM Vegetation and Weed Management Policy • Reports define minimum work requirements > Schedule 3 Obligations

7. Lease Term Impacts FCRM assesses: • Historical position of Tenant Past performance and history of community support of the Lessee is taken into consideration. • Financial history FCRM is charged with the responsible management of the Land on behalf of the Crown • Accommodation Condition “the facilities at the resorts provided under leasehold arrangement cater for a range of experiences, from resort-style accommodation and activities with skiing for all skill levels, to low-cost facilities highly accessible to families and school groups and providing an introduction to snow for many visitors.”

8. Lease Term Impacts • Retail, social & sports activity (Village amenity) “the alpine resorts also provide an important source of recreation to Victorians and to interstate and international visitors, supported through the provision of accommodation, infrastructure, retail and commercial premises.” • Annual activity/accommodation • Summer only • Winter only • All year round “the economic benefits provided are demonstrated through the generation of income and employment arising from tourism activity within the resort and en route to and from the resorts during both the winter and non-winter seasons.”

9. Lease Term Impacts • Employment levels (Similar to Annual Activity/Accommodation ) • Summer • Winter • All Seasons • Full Time Equivalents • $ Financial outlay • Ongoing refurbishment / maintenance programs • Development proposal • Business Plans • Improved Lessee business planning • Plan provides visibility to FCRM for accurate lease term

10. Lease Term Impacts • Strategically Identified Site Potential (SISP) Development % of the site • Alpine Resorts Planning Scheme guidelines • 11 m height and 40% site coverage (A1 area of the Village as per DPCD Alpine Resorts Planning Scheme) • In accordance with the Alpine Resorts Leasing Implementation Policy, SISP defines the lease term category for each site: • Ranges: 0 – 10, 11 – 21, 22 – 35, 36 – 45 & 46 – 51, years

11. SISP Example

12. Alpine Resorts Policy Assessment Matrix 13.2. LEASE TERM In accordance with the Government’s announcement of 30 March 2002, lease term shall be commensurate with proposed use and investment. The table of criteria for determination of lease term below relates the maximum lease term with the level of development identified by the Board as appropriate for the site, and links these with conditions that must be met by the lessee in order for a lease proposal to be considered. 13.2.1. Criteria for determination of lease term The determination of lease term is subject to the proposed lessee being identified by the Board as a good lessee. This will be established through: • assessment of the lessee’s ability to meet the requirements of the lease (such as payment of rent); • consideration of the submitted Business Plan; • examination of records related to an existing lessee’s past performance with regard to Standards of Occupancy; and • other relevant considerations. Having established that the proposed lessee is a good lessee, the following criteria shall assist the Board to make a determination with regard to lease term. This table of lease term criteria does not stand alone and must be applied in conjunction with all other requirements.

13. Alpine Resorts Policy Assessment Matrix

14. Alpine Lease Registration Guidelines • Following an amendment to the Transfer of Land Act 1958, registration of leases granted after 21 June 2006 is compulsory. • Section 8 of the Act requires the registration of lease granted by Boards in the Alpine Resorts.

15. Alpine Lease Registration Guidelines For leases to be registered, they must satisfy a number of requirements that are strictly applied by Land Victoria: • The land must be in the State cadastre and correctly described by a lease plan certified by the Surveyor General; • The form and content of the lease must be acceptable for registration by use of the standard Alpine Resorts Lease document or DSE approved alternative lease; • The lease must be submitted for registration at Land Victoria

16. Alpine Lease Registration Guidelines In following the standardised FCRM new lease application and granting process, all new leases issued will be in a registrable format. What does this mean for Lessees? Land Victoria’s Land Titles Register holds certificates of title, plans of subdivision and other property documents that comprise the States official land and property records. The Government guarantees the accuracy of this register of property ownership interests. The register is open to public search.

17. Alpine Lease Registration Guidelines Lease and sub-lease registration offers the following benefits: • transparency, • the ability of others such as mortgagees to register their interest in the lease or sub-lease • Greater protection of that interest Once registered, a certificate of title is created for each lease and a searchable record is created for each sub-lease

18. Alpine Lease Registration Guidelines The registration system is familiar to conveyancing practitioners and lawyers and is accepted by financial institutions, with simple forms and processes directing common transactions such as transfer of ownership. For further information, please visit: www.dse.vic.gov.au

19. Property Development Falls Creek Alpine Resort is covered by the Alpine Resorts Planning Scheme • This Scheme is administered by the Department of Planning and Community Development (DPCD) the “Responsible Authority” • All works require the Consent of the Falls Creek Alpine Resort Management Board as the Head Lessee • Consents are facilitated via Falls Creek Resort Management • FCRM and DPCD have an established protocol for approving Planning Permit Applications • First port of call is to contact FCRM to discuss and seek approval for development works. DPCD makes itself available for pre-application meetings. • FCRM provide Lessor Consent under the Lease and Approval in Principle under the Scheme • Planning Permit is applied for with the support of FCRM

20. Property Development Property Development • Recent / Upcoming proposals • Site 208 Cosela refurbishment & extension • Site 64 Tivoli refurbishment & extension • Site 94 Mogul refurbishment & extension • Site 18 Subzero redevelopment • Site 4A Four Seasons redevelopment • Site 4B Ironbark redevelopment • Site 207 Chorki refurbishment & extension • Site 98 Schusski refurbishment completed • Various sites upgrades/improvements

21. Bushfire Protection Falls Creek Resort Management Fire Preparation Plan Subsequent to the fires of 2003 & 2006 but prior to those of 2009 FCRM in consultation with the CFA has developed and implemented a Fire Preparation Plan (FPP). Objectives: • To protect the lives of residents and guests of Falls Creek; • To protect the natural and man made assets and infrastructure associated with the Resort; and • To minimise environmental impacts associated with the implementation of the FPP • To play a key role in assisting the Village to meet future requirements of the Bushfire Attack Level determinations and vegetation requirements of the Wildfire Management Overlay

22. Contacts For further information on the new lease application process and planning permit process respectively, please visit: www.fallscreek.com.au/Property Anthony Walkley: 03 5758 1224 anthonywalkley@fallscreek.com.au Casey Brasher: 03 5758 1241 caseybrasher@fallscreek.com.au www.dpcd.vic.gov.au Ben Howells: 03 9637 9549 Ben.howells@dpcd.vic.gov.au Mary Dempster: 03 96379548 Mary.dempster@dpcd.vic.gov.au

23. Questions?