This article originally appeared in QHA Review magazine, October 2018 edition
With areas of Queensland currently experiencing growth, we thought it timely to explain the key factors and processes involved in developing a Greenfield hotel or pub site for any of you who are looking to capitalise on new opportunities.
A Greenfield hotel or pub site opportunity is unique, in that the site is starting “fresh”. There is no inheritance of liquor and gaming licences, operating authorities, trading hours, approved plans or licence conditions from the previous owner, as you would expect when you take a transfer of pre-existing licences.
For this reason, applying for liquor and gaming licences for a Greenfield hotel or pub site is a comprehensive process, and requires a team of experts to assist with the project.
A commercial hotel licence is the appropriate liquor licence for a hotel or pub.
Obtaining a new commercial hotel licence can be daunting at times, due to the work and time involved. However, given the growth areas in Queensland and new communities being created, there is an opportunity for new Greenfield sites to service these locations.
Applicants for Greenfield sites will need to engage architects and construction companies to consult on the design and construction of the premises and preparation of the plans for the project. There are a number of key elements that a commercial hotel licence must have, including (but not limited to) the capacity to seat more than 60 patrons, male and female toilet facilities and a commercial kitchen.
There are also a series of documents the Office of Liquor and Gaming Regulation (OLGR) requires to be submitted with the commercial hotel licence in addition to the standard application forms, including a full community impact statement and a risk-assessed management plan.
Note that town planning approval is a pre-requisite and it must be obtained prior to lodging the application for a commercial hotel licence.
For a Greenfield site looking to apply for liquor and gaming licences, we normally recommend that this is done at the same time. Generally speaking, the lead time on approval of a gaming machine licence is slightly longer than a commercial hotel licence so making the applications together avoids potential delays.
There are a number of documents in addition to the standard application forms which are needed to apply for a gaming machine licence including layout plans, a responsible gambling policy, a business plan with projections and a full community impact statement.
Town planning for the operation of gaming machines at the premises is also necessary.
There is currently a cap of 45 gaming machines per gaming machine licence for hotels and pubs. However, receiving approval for 45 machines does not automatically give you the right to install and operate machines at your premises.
Instead, once you receive approval, you will then have to bid at the next authorised sale for operating authorities (these sales generally take place three times a year). You must hold one operating authority for every gaming machine that you install and operate at your premises.
There is no guarantee that you will be able to purchase 45 operating authorities at the same authorised sale, or at all given the cap on the maximum number of operating authorities in Queensland. With many new Greenfield sites being developed in Queensland, it is likely that the authorised sale for operating authorities is going to become competitive, especially in the South-East Region.
Under the Gaming Machine Act 1991 (Qld), the Minister has a right to recommend that the maximum number of operating authorities be increased over the current cap. However, before making such a recommendation, the Minister must have regard to whether the population of Queensland has grown. With the anticipated increase in the Queensland population over the coming years, it will be interesting to see whether the overall cap on operating authorities is increased.
If you are looking at purchasing a site to develop into a Greenfield hotel, pub or tavern site, it is imperative that the contract is not only subject to you obtaining approval of the liquor and gaming licence but also town planning approval as necessary. The contract will also need to deal with the construction of the site, and any site specific requirements.
As specialists in the hospitality industry for more than 30 years, we have extensive experience in acting for sellers and purchasers of Greenfield sites and applicants for new commercial hotel licences and gaming machine licences for Greenfield sites. The information above is a brief overview of the key factors and processes involved in developing a Greenfield hotel or pub site - if you have any questions or are considering investing in a Greenfield site opportunity, please get in touch.
This article was written by Annabelle Efstathis, Solicitor, and Curt Schatz, Managing Partner
"The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication."