KORUMBURRA will miss out on a new Michaels IGA supermarket on
the site of the former council offices for now, after a deal
between Michaels IGA and South Gippsland Shire Council
Michaels IGA has been negotiating with council to buy the site
on the corner of King and Commercial streets from council, and was
advanced with plans. The Korumburra library, Rotary art gallery and
Korumburra and District Historical Society were all to relocate
from the site to make way for the new supermarket.
The project could have been valued at more than $18 million and
would have created between 40 and 60 supermarket jobs alone, and a
further 20 to 30 jobs during construction.
The company has spent $2.4 million on the project so far.
But the project is no more, after Michaels IGA believed councils
initial requirement that the company pay bank guarantees of
$600,000 and a 10 percent deposit to buy the site was
Michaels IGAs bank advised that normal commercial terms were
approximately five percent of the agreed sale price approximately
$100,000 in this case.
Michaels IGA originally offered council $200,000 and a 10
percent deposit to be held in a trust account, with council able to
seize this money if Michaels IGA did not proceed with the
The company then offered $300,000 to be held in trust and a 10
percent deposit still above the norm, Michaels IGA
general/operations manager Len Morabito said.
He said council rejected that offer and then wanted $400,000 in
bank guarantees and a six percent deposit.
The deal is off. There are no further plans, Mr Morabito
Council CEO Tim Tamlin said the sale could still proceed in the
Council wanted the bank guarantees to ensure Michaels IGA did
not back out of the deal or not proceed within a reasonable
timeframe, but Mr Morabito said the company was serious about the
Why would we spend another $1.5-plus million on land if we were
not serious about building? The reality is that with the old
car yard and residential properties we already own, there is no
need to buy any more land to landbank, he said.
No one else would be able to develop on the site as it stands
now so the councils reasoning/argument about land banking is very
inaccurate and flawed.
Owner of Michaels Supa IGA stores in Leongatha and Korumburra,
Michael Lorenz, told The Star he just wanted to get on
with the development.
I have a proven track record. Look what Ive done with the
Leongatha store, I saved the Korumburra store, I built the highway
liquor store in Leongatha, Mr Lorenz said.......