Adelaide City Council is questioning whether businesses trading on university grounds should remain exempt from paying council fees.

Last night, the council asked its administration to report on the number and legal status of businesses operating on public land in the Adelaide CBD, including businesses which may operate on the grounds of the new Royal Adelaide Hospital, once it opens next year.

“There are rules that exempt certain institutions from rates and they include all government buildings … naturally that includes educational and health facilities,” north ward councillor Phillip Martin told InDaily this morning.

“But we have seen in recent times an increase in the number of commercial enterprises operating in these locations.

“These premises are enjoying a rate-free environment and therefore have a competitive advantage over businesses operating nearby.

“We all understand the good work that universities and hospitals do, and it may be that once presented with all the information, the council may decide that it doesn’t wish to pursue (applying rates to those businesses).

“There may be legal reasons why it may not happen. All we’ve done is ask the question.”

Earlier yesterday, the council voted to freeze rate increases for all city businesses and residents in the upcoming budget, citing boosted coffers from a flowering of new developments in the city.

Deputy Lord Mayor Houssam Abiad rejected any suggestion the council was attempting to broaden its revenue base.

“We are not looking for a new right of revenue, we are literally trying to be equitable,” he said.

“The question we need to ask here is: why would a bricks-and-mortar business across the road have to pay the rates, and a (business within a) hospital, or a government institution, or a university, doesn’t have to pay any rates to provide the same service to the community?

“Universities and hospitals definitely are crucial to our economic development, and also servicing our community.

“But universities are evolving and starting to become a little bit more commercial, and starting to compete with some of our bricks-and-mortar businesses as well.”

Abiad expressed concern that several prospective businesses on the grounds of the new RAH would have an unfair competitive advantage against similar businesses in the West End.

“From what I’m hearing there’s some serious commercial space there … that’s going to be in direct competition with some of our city businesses,” he told last night’s council meeting.

The University of South Australia hosts four franchisees at its City East and City West campuses.

Director of Facilities Management, Phil Clatworthy said the University believed the arrangements for franchisees on campus were appropriate because the university itself pays council rates.

“The University pays council rates based on any commercial rent generated at its campuses by these businesses,” Clatworthy said.

“The arrangements made with franchisees are appropriate given that their businesses are impacted greatly by the university student calendar.

Should on-campus businesses pay council fees?

“Business is reduced during semester breaks, and across the business year there are just over five months when students are not attending the campuses which greatly reduces trade.”

Panduka Gunawarenda, who owns the Caf on the University of South Australia’s City West campus, argues it would be unfair for his business to pay council rates, because the vast majority of his customers are university students.

“We only trade basically 26 good weeks (during semester each year) and even those 26 good weeks have become very quiet,” he told InDaily.

“It was a very, very good business eight years ago (but) with the decreasing number of international students … it is not as profitable as it used to be.

“In those days, they came (to university) at least four days a week.

“They hardly come to university to do their studies because most of the lectures can be seen online.

“Now they only come one day, maybe one and a half days.”

Manager of Hindley Street West business Phat Coffee, Cheryle Paskale, said she was more concerned by new competition from mobile food and drinks businesses than from those on public campuses.

“I don’t have a bone with them, that’s between them and the uni,” she said.

According to its website, Adelaide University hosts ten food and drink outlets at its city campus.

A spokesperson told InDaily that its businesses do pay council rates, indirectly.

“We get invoiced for it but the cost gets passed onto the tenants, so effectively they do pay rates,” the spokesperson said.

SA Health said there were eight businesses operating from the current Royal Adelaide Hospital.

“Council rates are a matter for those businesses and the council,” an SA Health spokesperson said.

A report from council administration is expected within six to eight weeks.

Photo: Nat Rogers/InDaily