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Blue Haven
Kiama Municipal Council has taken a significant step forward in the divestment of Blue Haven Bonaira to Hall & Prior Aged Care, with Councillors unanimously endorsing the final letter of variation to the sale agreement at tonight’s Council Meeting (in confidential session).
The revised agreement adjusts the gross sale price from $95 million, as initially agreed upon in July 2024, to $89 million. This adjustment reflects various building matters identified during the due diligence process, which involved multiple engineering assessments to ensure the site met all necessary standards and building requirements.
The settlement for Blue Haven remains on track for February 2025. The adjusted price results in a surplus of $19 million from which Council’s $15 million TCorp debt will be cleared.
Kiama Council Mayor Cameron McDonald highlighted the importance of this milestone and provided further context for the adjusted sale price:
“I thank the Councillors for their collective decision to move the sale of Blue Haven Bonaira forward. This has been a long and challenging process; any contract and sale of a going concern business this size, with a long and proud history, is complex and has many moving parts. 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,“ Cr McDonald said.
“This was not a decision made lightly, but one that demonstrates our Council’s commitment to transparency and ensuring the best possible outcome for our community.”
“This divestment is critical to our path toward financial sustainability, as outlined in our Performance Improvement Order. 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.”
“To be frank I think this Council (and future councils) can learn significant lessons from this substantial project. Areas for improvement include project management, asset oversight, better business cases, operational planning and improved reporting to Council on funding and variations.”
“I’m pleased to see this transaction moving closer to settlement in February, and I thank our staff and community for their patience and understanding,” Cr McDonald said.
Hall & Prior CEO Graeme Prior and his team were onsite at Blue Haven Bonaira this week to meet with staff, residents, and their families as part of the transition process.
Mr Prior said: “The Hall & Prior team enjoyed meeting with Blue Haven Bonaira staff and residents onsite and online to discuss matters that will ensure a seamless and respectful transition for staff, residents, and the local community.”
“As an experienced aged care provider, we are focused on ensuring the sale process is handled with care, transparency, and professionalism. This includes safeguarding the continuity of care and maintaining the high standards of service that residents, their families, and carers expect,” Mr Prior said.
Kiama Council has maintained transparency throughout the Blue Haven Bonaira divestment process, providing regular updates via the Kiama Council and Blue Haven websites, as well as letters, emails, newsletters, and face-to-face meetings with staff, residents, their loved ones, and other stakeholders.
The sale of Blue Haven Bonaira marks a pivotal moment in ensuring a sustainable future for Kiama Council while retaining a large residential aged care facility in our municipality that ensures high-quality care for residents and a supportive workplace for staff.
Background on building defects
Council has been aware of building issues and defects since completion of the Bonaira site in late 2019.
Council has worked to address issues as they arose and has fixed many of the issues. These issues have been discussed and shared publicly many times with Residential Aged Care Facility (RACF) and Independent Living Unit (ILU) residents.
As part of the due diligence process associated with the divestment, further investigations and engineering assessments were conducted by both Hall & Prior and Kiama Council’s independent assessors. These assessments uncovered additional building issues that require rectification across the site.
The defects have had a material impact on the value of the asset and have impacted residents and families living within the complex.
Hall & Prior has stated they will work hard to resolve building issues as the company assumes ownership.
Council resolved in July 2024 to commence legal recovery processes against the contractor that built Blue Haven Bonaira. The legal case is being compiled and is on foot.
Kiama Mayor Cameron McDonald said: “Our new Council came into office with a good awareness of the issues involved with the Blue Haven Bonaira build and associated project management.”
“Any new Council or leadership team will face challenges associated with the legacy of prior decisions and Kiama is no different in this respect. I am, however, grateful for my fellow Councillors’ support in making the tough decisions that are needed and that are in the public interest. When we were elected, we said we would do exactly that, and now we are focused on putting the past behind us, getting on with business and moving forward for our whole community.”
