Perth-based family owned aged care operator Hall & Prior will pay $89 million for the Council-built 134-bed aged care home in Kiama, 120km south of Sydney, down from the $95 million original price tag announced in July 2024.
In a confidential meeting, Kiama Councillors unanimously endorsed a letter of variation to the original sale agreement after engineering assessments and investigations as part of the due diligence process uncovered building issues that needed to be rectified.
These issues were in addition to earlier problems identified that had eroded the original sale price.
Kiama Council Mayor Cameron McDonald said: "Ultimately the adjustment to the price was necessary to reflect the reality of the building’s condition and the work required to address these issues.
"This divestment is critical to our path toward financial sustainability, as outlined in our Performance Improvement Order (issued by the NSW State Government).
"It allows Kiama Council to refocus on our core responsibility of delivering municipal services while ensuring Blue Haven Bonaira has the support it needs to thrive under Hall & Prior's experienced care."
Lessons learnt
The Mayor said "to be frank" lessons could be learnt from the troubled project.
"Areas for improvement include project management, asset oversight, better business cases, operational planning and improved reporting to Council on funding and variations," he said.
The acquisition was initially scheduled to be completed in November, but has been granted two extensions, with parties citing more time was needed for due diligence and "transitional work".
The most recent extension, in October, moved the settlement in February, which remains on track.
Blue Haven Bonaira, which cost Kiama Council $105 million to build, has been plagued by controversy since it opened and has been blamed for the Council's poor financial position. The home lost $660,000 in July 2022 alone. The Performance Improvement Order was issued months later.
The adjusted price results in a surplus of $19 million for Kiama Municipal Council, which will allow it to clear $15 million in debt with TCorp, the financial markets partner of the NSW public sector.
In July 2024, Kiama Municipal Council announced it would begin a legal recovery processes against Blue Haven Bonaira's builder. "The legal case is being compiled and is on foot," the Council's statement said.
