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Draft Feasibility Study — The Commercial Hotel (“The Bottom Pub”), Cygnet

A community co-operative ownership concept

Status: DRAFT — working document for the steering group. Not for public release. Not for circulation outside the delegated working group without sign-off. Stage: Stage 1 — Gauging Interest. Version: v0.1 — 24 June 2026 Prepared by: Bottom Pub Co-op research workstream (drafted with AI assistance; pending Codex / Gemini / Hermes QA and human sign-off). Subject property: The Commercial Hotel, 2 Mary Street, Cygnet TAS 7112 (Tasmanian Heritage Register Place ID 3472).

⚠️ Read this first — what this document is and is not

This is a draft, pre-feasibility assessment, not a completed feasibility study and not an investment offer.

It assembles, into the recognised feasibility-study framework, the research the working group has already done. It is honest about where evidence is strong and where it is missing. A completed feasibility study, in the formal sense a lender, grant assessor, or co-operative registrar would expect, additionally requires professional inputs the project does not yet hold: an independent property valuation, a commissioned building-condition and heritage-works assessment, a costed financial model, and a legal options paper. Those are Stage 2 tasks. This document is the structured head-start for the people who will commission them.

The Co-operative Federation of Australia frames the relationship plainly: “The feasibility study is not the same as a business plan, but it should be developed first and be the basis for the business plan.” This draft sits one step before even that — it scopes what the feasibility study must resolve, using what we know today.

This document does not state or imply that:

• the project will buy, or has agreed to buy, the property;
• any person has agreed to sell on terms favourable to a community group;
• any financial return, dividend, interest, or capital repayment will be paid to members or supporters;
• the co-operative could itself hold a liquor licence;
• any capital instrument has been designed, legally reviewed, or approved.

All such matters are open, conditional, and subject to professional advice and community decision.

Confidence key

Every load-bearing figure or claim carries one tag:

Where a number is illustrative, it is labelled illustrative. No figure in this document is a target, a forecast, or a promise.

Most claims carry exactly one tag. A claim with two genuine aspects — for example, a verified figure about a comparator town that informs an as-yet-unmade Cygnet decision — may carry two tags written [FACT] … [CHOICE]; that is deliberate, not an error.

1. Executive summary

The Commercial Hotel — known locally as “the Bottom Pub” — is a ~140-year-old, state heritage-listed hotel at the heart of Cygnet, in Tasmania’s Huon Valley. [FACT] In 2026 it entered a receivership/mortgagee sale process, and is currently listed for sale by expressions of interest through Elders Real Estate, on behalf of the mortgagee in possession, with that EOI process closing 2 July 2026. [FACT] A grassroots group of residents has, through a structured engagement exercise, registered whether the community might own and run the pub co-operatively — and the response has been substantial. As at the live project database (24 June 2026): 43 unique web expressions of interest (the 17 May meeting reported 68, including non-web sign-ups), 217 mailing-list subscribers, and a 125-response financial-interest survey (120 unique) in which 106 respondents expressed positive interest in contributing and ~98 are local (Cygnet or Huon Valley). [FACT — live D1, 24 Jun 2026] These are expressions of interest, not committed capital — but they are a markedly stronger signal of community appetite than a mailing list alone. The working group has also lodged a conditional expression of interest with Elders within the sale process. [REPORTED — working group, 24 Jun 2026]

Preliminary, qualified finding: Community co-operative ownership of a rural Australian pub is a proven model — there are multiple verified Australian precedents in which small towns have raised six- and seven-figure sums from members to buy and run their local pub (Grong Grong NSW, Sea Lake VIC, Lockington VIC, Broomehill WA). [FACT] Cygnet shares the characteristics of several towns where this has worked — it is larger than some, sits on a growing tourism route, and the pub is a viable trading asset rather than a derelict one. Its larger size also implies a higher per-capita capital-raising ask than the smallest precedent towns. [ESTIMATE]

However, four conditions are not yet met, and until they are, no view on viability can be responsibly offered:

1. Timing — tight, but the group is in the process. The competitive sale closes 2 July 2026. The co-operative is not yet incorporated and holds no capital, so it cannot complete a conventional fully-funded purchase inside this window. [FACT] But the working group has not stood aside: it has lodged a conditional expression of interest with Elders. [REPORTED — 24 Jun 2026] Converting that into a community acquisition on this timeline would require, in quick succession — incorporation, a credible capital path (for example a philanthropic deposit-in-trust supporting a negotiated exclusivity period), and resolution of the title caveats. Each is demanding and none is yet secured, but none is impossible. The realistic routes are (a) a negotiated exclusivity/standstill that extends the window, (b) an arrangement with whoever acquires at this sale, or (c) a later opportunity.
2. Capital scale unknown. No independent valuation and no building-condition assessment exist. Reported acquisition figures ($1.3M–$1.6M [REPORTED]) and renovation figures ($900K–$1.2M [REPORTED]) are unverified and of undefined scope. The total capital requirement is genuinely unknown. [STAGE 2]
3. Legal structure undecided. The choice between a distributing and a non-distributing co-operative is not made, and it gates everything downstream — grant eligibility, capital instruments, and what (if anything) members can ever receive. [CHOICE]
4. The licence cannot sit with the co-op. Under Tasmanian law a liquor licence is granted to a natural person, not to a body corporate. A co-operative-owned pub must therefore structure its licence around an individual licensee, with the entire board treated as “associates.” [FACT]

Recommendation of this draft: Hold the Stage 1 “exploring only” posture in public language — no implied funded bid, no promised return. But internally, pursue both tracks at once: (1) press the near-term path the group has already opened — the lodged EOI and a possible exclusivity/deposit arrangement — to its honest conclusion, subject to legal confirmation; and (2) commission the four missing professional inputs (§12) so the community is ready whether this sale or a later opportunity is the one that lands. The 2 July sale is a long shot, but it is a live one the group is actively in — not a foregone loss.

2. Purpose, method, and how to read this

Purpose. To consolidate the working group’s research into the standard feasibility-study structure; to test, against evidence, whether community co-operative ownership of the Bottom Pub is worth continuing to pursue; and to produce a defensible Stage 2 scope.

Method. Desktop synthesis of (a) the project’s own research corpus — title search, heritage desktop research, the finance assumptions book, the assumptions register, the validated case-study register, the grant landscape, and the draft co-operative rules; and (b) external research into Tasmanian and Australian community-pub precedents, Tasmanian co-operative and liquor law, recognised feasibility frameworks, and regional market data. No site inspection, valuation, or professional report was commissioned for this draft.

Framework. The section structure follows the consensus components of a community-enterprise feasibility study, drawn from the Co-operative Federation of Australia manual and the Plunkett Foundation’s community-pub guidance, cross-checked against general feasibility frameworks: market, technical/operational, financial, legal/organisational, management, risk, and a go/no-go gate.

How to read it. Trust the [FACT] tags. Treat [REPORTED] and [ESTIMATE] figures as conversation-starters, not findings. Read every [STAGE 2] tag as a line item in the work-and-cost plan of §12. The [CHOICE] tags are the decisions the community owns.

3. The opportunity — property, place, and the sale process

3.1 The property

• Address / identity: The Commercial Hotel, 2 Mary Street, Cygnet TAS 7112. [FACT]
• Heritage: Permanently entered on the Tasmanian Heritage Register, Place ID 3472; state-level listing; whole-of-title heritage curtilage. No Statement of Significance exists (the place was listed before 2007), which means complex works are likely to require a Conservation Management Plan. [FACT]
• Title: Single freehold title 163869/1, ~5,091 m², zoned Local Business. [FACT] Two unregistered creditor caveats were lodged in March 2026; these would need to be resolved before any transfer could register. [FACT]
• Adjacent parcel: A separate freehold title (163869/4, ~1,074 m², also Local Business) sits next door at 4 Mary Street; whether this adjacent parcel forms part of the receivership sale is unconfirmed. [STAGE 2]
• Caveat risk: Until the nature and quantum of the two March-2026 creditor caveats are known, the risk that they delay or block a transfer cannot be sized — this is a priority Stage 2 legal due-diligence item, not a formality. [STAGE 2]
• Listing discrepancy to resolve: The sale listing refers to “~2,400 m² residential-zoned surplus land,” but the title search shows the hotel parcel is wholly Local Business with no residential component. No capital model should treat residential land as a separable asset until this is reconciled. [STAGE 2]
• Built form: Victorian-Georgian double-storey brick hotel (built 1884–85), double-storey verandah with cast-iron detailing; public and lounge bars, café, bottle shop, commercial kitchen, ~10 upstairs accommodation rooms, plus outbuildings. [FACT] A ~$250,000 roof-and-restoration project was reported completed by the private owner in 2024. [REPORTED]

3.2 The place — Cygnet and the Huon Valley

• Cygnet is a small town in the Huon Valley (Huon Valley Council), in the Huon–Far South tourism region south of Hobart. It has three pubs, named geographically in the rural tradition — the Top Pub, the Middle Pub, and the Bottom Pub (the Commercial). [FACT]
• The Huon Valley is a growing food, beverage, and tourism district. Tasmanian tourism statewide drew ~1.32M visitors and ~$3.7bn expenditure in the year to December 2024; the southern region carries a material share. [FACT — statewide; not disaggregated to Cygnet] (Region-level data does not break out to town level — see §4.)
• The pub is a long-standing community anchor; past closures have triggered visible community anxiety, which is itself part of the case for community ownership. [FACT]

3.3 The sale process — and why timing dominates

The property is being sold by expressions of interest via Elders Real Estate, on behalf of the mortgagee in possession; the EOI process closes 2 July 2026. [FACT] The co-operative is not yet incorporated and holds no capital, so it cannot complete a conventional fully-funded purchase inside the window. [FACT] It has, however, lodged a conditional expression of interest with Elders to keep the community credibly in the process. [REPORTED — working group, 24 Jun 2026]

Timing is the dominant constraint, but it is not a closed door. A community acquisition tied to this sale would need three things to align quickly — rapid incorporation, a credible capital path (e.g. a philanthropic deposit-in-trust enabling a negotiated exclusivity/standstill period), and resolution of the title caveats. None is secured and the combination is demanding, but it is a real path, not an impossible one. The feasibility question therefore has two live forms, and this study assesses both: can the group convert its current position in this sale into a community acquisition — most plausibly via an exclusivity arrangement that buys time? and, failing that, is the model sound enough to build readiness for a negotiated arrangement with the buyer, or a later opportunity?

3.4 Stakeholder map

Key parties whose position shapes feasibility:

• Registered owner / vendor and mortgagee in possession — control the current sale; the co-op has no relationship or agreement with them. [FACT]
• Elders Real Estate (selling agent) — runs the EOI sale process. [FACT]
• Heritage Tasmania / Tasmanian Heritage Council — approves works to Place ID 3472. [FACT]
• Huon Valley Council — planning, change-of-use, food-premises registration, rates. [FACT]
• Treasury — Liquor and Gaming Branch — liquor licensing and the natural-person licensee assessment. [FACT]
• CBOS / Registrar (Director of Consumer Affairs) — co-operative registration and rules. [FACT]
• Existing licensees of the Top and Middle pubs — incumbents in a three-pub town (see §4). [FACT]
• The engaged community base — 43 EOI registrants, 217 mailing-list subscribers, and 120 unique financial-survey respondents (106 expressing positive contribution interest, ~98 local) — the potential membership pool. [FACT — live D1, 24 Jun 2026; interest, not committed capital]

4. Market feasibility

What we can say with evidence:

• Sector context. Hospitality is Tasmania’s third-largest employing industry (~24,100 people, ~9% of the workforce); accommodation and food services contributed ~$1.067bn in gross value added in 2024–25. [FACT]
• Accommodation benchmarks. Tourism Tasmania figures for the Huon–Far South region indicate an average daily rate of ~$154–$175 and RevPAR of ~$131–$175. [FACT — regional benchmark] Any future revenue model for the upstairs rooms should sit at or below these benchmarks unless a specific premium can be justified.
• Pub economics — the margin reality. ATO small-business benchmarks for “pubs, taverns and bars” show total expenses commonly running 84–91% of turnover, with cost of sales ~37–40% and labour ~18–32% depending on turnover band. [FACT — national benchmark; verify on ATO source before relying on it] The plain reading: rural pubs run on thin margins, and labour plus cost-of-goods dominate. This is the central commercial risk for any operator, community-owned or not.

What we cannot yet say:

• There is no site-specific trading data for the Commercial Hotel and no Cygnet-specific demand study. [STAGE 2]
• Region-level tourism data does not disaggregate to Cygnet, so visitor-demand claims for the town itself are inference, not measurement. [STAGE 2]

Comparable-town reference — New Norfolk. New Norfolk (Derwent Valley) is the nearest Tasmanian town that is useful as a comparator for scale and character: population ~6,153 (2021 Census), ~32 km from Hobart, a lower-than-state-median household income, a heritage-rich main street, and an established hospitality scene including the Bush Inn (licensed since 1825) and the New Norfolk Hotel. [FACT] New Norfolk won Tasmania’s Top Tourism Town in 2021. [FACT] Important caveat: New Norfolk has no community-owned or co-operative pub — none could be found anywhere in Tasmania (see §5). New Norfolk is therefore a comparator for town size, tourism trajectory, and proximity-to-Hobart economics, not a precedent for the ownership model. Cygnet is smaller than New Norfolk, which means the per-capita capital-raising ask would be correspondingly higher — a point the financial section returns to.

Local competition. Cygnet already has three pubs — the Top Pub, the Middle Pub (Cygnet Central), and the Bottom Pub (the Commercial). [FACT] A community-owned Bottom Pub would not be entering an empty market; it would compete with two established venues for a finite local and visitor spend. Whether the town’s resident trade plus tourism can sustainably support all three at the level a community pub would need is an open market question, and a community model would likely need a clear point of difference (local-produce focus, events and cultural programming, accommodation) rather than relying on goodwill. Displacement of trade between the three venues is a real possibility a demand study must test. [STAGE 2]

5. Comparable case studies

Headline: Community ownership of rural pubs is a real, repeatable Australian model — but no Tasmanian precedent exists; the strongest analogues are mainland. A Cygnet co-operative pub would therefore be the first of its kind in Tasmania, which means the model’s transferability to the Tasmanian legal and market context is itself an open question, not a settled one. [FACT]

5.1 Verified Australian precedents (the peer group)

5.2 The failure case — read this one twice

Hotel Theodore (QLD). Queensland’s only co-operative community-owned hotel; bought by the Hotel Theodore Co-operative Association in 1949. After almost 75 years and with 168 shareholders, it entered voluntary administration in August 2023 — under pressure from power, utilities, insurance, and COVID-era staffing costs. [FACT] Lesson: community ownership does not immunise a pub against the cost structure that sinks ordinary pubs. Survival depends on operating discipline and a realistic cost model, not on community goodwill. This directly motivates the operating-cost rigour in §8.

5.3 Capital-instrument reference (not a pub)

Castlemaine Community Investment Co-operative (VIC) is sometimes cited in meetings. For accuracy: its asset is The Hub, a mixed-use office/community building — not a pub. Its community debenture raise was $1.95M–$2.0M at 0–4% interest over 5/10/15-year terms. [FACT — corrects earlier meeting-reported “$1.5M / up to 5%” figures, which were wrong.] Use Castlemaine only as a capital-instrument reference (community debentures), never as a hospitality analogue.

5.4 International context (evidence base only — not transferable to Australian law)

• Plunkett Foundation (UK) “More Than a Pub”: community-owned pubs report a ~99% long-term survival rate across 400+ projects. [FACT] A striking figure, but a different legal jurisdiction — cite as evidence the model works, not as a CNL precedent.
• Old Crown, Hesket Newmarket (Cumbria): £180,000 purchase, 125 shareholders, £1,500 standard share, tenanted model; turnover grew from £90K to £259K. [FACT] (Always use the full town name; do not confuse with a debunked Birmingham namesake that was never community-owned.)
• George & Dragon, Hudswell (Yorkshire): £240,000 from 160 investors; later CAMRA National Pub of the Year. [FACT]

5.5 What the precedents collectively suggest

• Realistic member-capital raises in comparable Australian towns have run from ~$325K (Broomehill, town of 250) to >$1M (Grong Grong, with diaspora). [FACT] Cygnet’s larger population could support the upper part of this range — but only against a verified capital requirement, which we do not have.
• A grant + member-capital + (modest) debt + volunteer-labour stack is the norm, not member capital alone. [FACT]
• Two structural patterns recur and both are worth Stage 2 legal testing: the split company-owns-building / co-op-operates model (Sea Lake) and the tenanted freehold model (UK). [FACT]

6. Technical & operational feasibility

What is known / favourable:

• The building is a going concern recently refurbished, not a ruin: a ~$250K roof and restoration was completed in 2024, bars were refreshed, a whisky bar added, and the ~10 upstairs rooms were upgraded for the tourist trade. [REPORTED] This is a materially better starting point than the condemned-building cases (Sea Lake).
• Full water/sewer and power services are connected; no flood or landslide hits appeared in screened spatial layers. [FACT]

What is unknown / risk-bearing — all [STAGE 2]:

• No independent building-condition assessment has been commissioned. The only condition input is a local builder’s verbal estimate. This is the single largest source of capital-cost uncertainty in the whole project.
• Renovation scope is undefined. The reported $900K–$1.2M range [REPORTED] does not distinguish “minimum viable reopening” from “full heritage-compliant restoration,” and does not clearly include asbestos remediation, BCA/DDA change-of-use upgrades, or commercial kitchen/refrigeration works — each of which can be a major line item in a heritage building.
• Heritage compliance is a cost multiplier. Whole-of-title curtilage means works need Heritage Council approval; absent a Statement of Significance, a Conservation Management Plan is likely required. Heritage projects routinely exceed standard commercial estimates; industry practice carries 20–30% contingency. [ESTIMATE]
• Planning pathway. Change-of-use, food-premises registration, and (if live music) an acoustic management plan are required; the Huon Valley planning regime and some zoning detail need confirmation.

Operational model note: The split between a professional licensed operator and community governance (per Sea Lake) is the recurring solution to running a regulated venue without relying on volunteers for core trade. Volunteer labour is valuable for working bees and activation, not a substitute for award-paid hospitality staff (see §8).

7. Legal & organisational feasibility

7.1 Co-operative structure

• Governing law: Co-operatives National Law, applied via the Co-operatives National Law (Tasmania) Act 2015; the regulator is the Registrar (Director of Consumer Affairs), via CBOS. [FACT]
• Core features: separate legal entity; one member, one vote; no member may hold more than 20% of shares; minimum five active members to form; rules adopted by a two-thirds vote at a formation meeting. [FACT]
• The pivotal choice — distributing vs non-distributing [CHOICE]:
  • A non-distributing co-op cannot distribute surplus to members (surplus is locked to the community purpose); CBOS notes it is “likely more appropriate for a community organisation,” and most relevant grant programs assume this structure (see §8).
  • A distributing co-op can issue share capital and distribute a capped surplus, but triggers the disclosure-statement regime and is generally ineligible for the NFP-restricted grants.
  • This decision gates capital design, grant strategy, and tax. It must be made with legal advice before any capital raise. The draft co-op rules currently lean toward a community-benefit/reinvestment purpose (non-distributing flavour) but retain broad powers consistent with either — i.e. the choice is genuinely still open.

7.2 The draft co-operative rules (work already done)

The steering group has begun a CNL-format rules table. Notable, and encouraging for compliance:

• Proposed name: “Cygnet Community Co-operative Ltd” (the working draft removed the word “Investment” — the right call, as it reduces any financial-product connotation). [REPORTED]
• Purpose (as drafted by the steering group): to preserve and revitalise community-significant places and enterprises, with the aspiration of keeping them in community ownership and reinvesting surplus into community projects and charitable activities. This is an aspiration in a purpose clause, not a guarantee — community ownership can fail (see §5.2) and cannot be promised in perpetuity. [REPORTED]
• Active-membership rule: a member must supply to, purchase from, or use a service of the co-op at least once each financial year — a clear, quantifiable, SMART rule that fixes a gap earlier drafts had. [REPORTED]
• Board: 5–7 directors, staggered terms, rotational retirement — and crucially no reserved investor board seats, resolving an earlier governance contradiction. [REPORTED]

7.3 The liquor-licence constraint — non-negotiable

Under the Liquor Licensing Act 1990 (Tas), a liquor licence is granted to a natural person, not a company, trust, or co-operative. [FACT] Consequences the model must absorb:

• The licence must be held by a designated individual (e.g. the publican/general manager), not the co-op. This creates a structural dependency: if that person leaves or is found not “fit and proper,” the core revenue stream is exposed until a new licensee is approved. [FACT]
• The Commissioner assesses the licensee and their “associates” — which captures the whole board — for fit-and-proper status; expect police checks and financial scrutiny for directors. [FACT]
• A new licence/transfer must satisfy a “best interests of the community” test — a community-ownership model fits this well, but it must be argued formally. [FACT]
• The exact compliant mechanism (nominee licensee agreement, manager’s licence, club licence, special licence) needs a Tasmanian lawyer’s opinion. [STAGE 2]

7.4 Securities / fundraising boundary

Earlier internal drafts contained fixed-return, capital-return, and security language that crossed into regulated-product territory; this has been removed and must not return. Any member-capital offer must be designed and disclosure-compliant before any public solicitation. [FACT]

7.5 Tax treatment (structure-dependent)

Tax outcomes differ by structure and must be modelled, not assumed:

• Corporate income tax: 25% base rate for entities under $50M turnover (2025–26). [FACT]
• GST: registration mandatory above $75K turnover — a trading pub will exceed this. [FACT]
• Payroll tax: Tasmanian threshold $1.25M; a single-site rural pub is unlikely to trigger it. [FACT]
• Charitable / DGR pathways: a non-distributing, community-purpose co-op may open pathways to concessions or to an associated charitable entity for the community-benefit activities; a distributing co-op generally cannot. This interacts with the §7.1 structure choice and needs accounting and legal advice. [STAGE 2]
• Transfer duty on acquisition: see §8.1. [ESTIMATE]

7.6 Exit, failure, and wind-down

A credible feasibility study must consider failure, not only success:

• If the venture cannot trade viably (the Hotel Theodore mode, §5.2), the co-op faces administration; the building would be realised to meet liabilities, with any secured lender ranking ahead of members.
• Member capital on winding up: under a non-distributing co-op, members receive back at most the original value of their shares — there is no upside, and capital can be lost. [FACT] This must be stated plainly to anyone ever invited to contribute, and is a core reason no return language is permissible.
• Asset treatment: the heritage listing constrains, but does not prevent, resale; a community-benefit purpose clause may direct residual assets, subject to the chosen structure and rules. [STAGE 2]

This is not pessimism — it is the disclosure a lawful community offer requires.

8. Financial feasibility (illustrative ranges only — not a model, not a forecast)

Reading instruction: Nothing in this section is a target or a projection. The figures are illustrative ranges drawn from comparable data and unverified reports, assembled to show where the money questions are, not to answer them. A real financial model is a Stage 2 task requiring a valuation, a building assessment, and lender/grant engagement.

8.1 Acquisition (illustrative)

• Reported purchase figures: $1.3M–$1.6M [REPORTED — unverified; no independent valuation exists]. A wider $1.0M–$2.0M band is reasonable for sensitivity testing only. [ESTIMATE]
• Stamp/transfer duty: ~$62K–$65K on a ~$1.5M purchase [ESTIMATE — Tasmanian Duties Act scale; confirm via SRO calculator once price known].
• Land tax applies progressively above $124,999 unimproved value (top marginal 1.5%). [FACT]

8.2 Capital works (illustrative)

• Reported renovation range: $900K–$1.2M [REPORTED — scope undefined].
• Heritage contingency at industry-standard 20–30%: ~$180K–$360K on that base [ESTIMATE].
• Because the building was recently refurbished, a “minimum viable reopening” scope could be far lower than full restoration — but no one has scoped it. This is the biggest single unknown. [STAGE 2]

8.3 The capital stack — what’s actually available

Structural insight: Most grants in the relevant tier assume a non-distributing (NFP) structure. The distributing-vs-non-distributing choice (§7.1) is therefore a gate on the whole capital strategy, not just a governance preference — it could be the difference of several hundred thousand dollars in accessible grant capital. [ESTIMATE — pattern across the programs reviewed; per-grant eligibility needs legal confirmation]

8.4 Revenue streams (qualitative)

A feasibility study must name its revenue lines even before it can size them. For the Bottom Pub the plausible streams are:

• Bar / beverage — public and lounge bars, bottle shop, Tasmanian whisky bar; typically the largest line and the most weather- and season-sensitive.
• Food — counter meals and café trade; margin-sensitive and labour-intensive.
• Accommodation — ~10 upstairs rooms, benchmarked against the Huon–Far South ADR ~$154–$175 / RevPAR ~$131–$175 (§4); the most tourism-dependent line.
• Functions and events — weddings, community events, live music and cultural programming; a plausible point of difference for a community venue.
• Ancillary — local-produce retail, merchandise, and tour/courtesy tie-ins (all contemplated in the draft co-op powers).

None of these can be sized without site-specific trading history and a demand study; the mix matters, because accommodation and events lift margin but carry the most demand risk, while bar and food are the base load. [STAGE 2]

8.5 Operating cost structure (qualitative + benchmark)

• Staffing is the largest recurring cost and is non-negotiably award-based (Hospitality Industry (General) Award): penalty rates apply on weekends/public holidays, which coincide with peak revenue days. Volunteers cannot substitute for paid roster staff. [FACT]
• Mandatory recurring costs routinely under-counted: public liability insurance (heritage-loaded), workers’ compensation, directors’-and-officers’ insurance (material, because directors are licence “associates”), building/contents insurance (heritage-loaded), RSA and food-safety certification, APRA AMCOS + PPCA music licences, council rates, food-premises registration (~$300–$700/yr), annual liquor-licence fee, utilities. Most are [STAGE 2] — no quotes obtained.
• The ATO benchmark (expenses 84–91% of turnover) is the disciplining reality check for any future model. [FACT]

8.6 Illustrative sensitivity (not a target)

At the upper end — top-of-range acquisition + full-scope renovation + 30% heritage contingency — the combined capital requirement could exceed $3M. [ESTIMATE — illustrative sensitivity only; explicitly not a capital target.] At a “minimum viable reopening” scope on a recently-refurbished building, it could be materially less. The honest position is a wide, unresolved range until §12’s professional inputs land.

9. Management & operating model

• Governance/operations split. The recurring successful pattern (Sea Lake, and implied in the draft rules) is an elected community board for stewardship plus a professional publican/general manager for day-to-day trade and the licence. [FACT / CHOICE]
• Skills on hand. The engagement data shows real volunteer depth in hospitality and finance — the two best-covered streams across the EOI and financial-survey skills fields — with heritage/architecture/planning and comms/marketing as identified gaps, notable given the heritage-listed building. [FACT — live D1 skills inventory, 24 Jun 2026; keyword-derived, directional] This is a genuine Stage 2 asset but not a substitute for paid management, and the two gaps warrant a targeted skills call-out.
• Capability gaps to fill (Stage 2): a costed staffing model, a nominated or recruitable licensee pathway, and a board-recruitment and director-vetting plan (given fit-and-proper requirements). [STAGE 2]
• Volunteer-burnout risk. Over-reliance on volunteer enthusiasm — which fluctuates — is a known failure vector and must be designed around, not assumed away. [FACT — see Hotel Theodore, §5.2]

10. Risk assessment

11. Community support

Drawn from the live project database (D1, 24 June 2026) — not a single meeting snapshot:

• Reach. 43 unique web expressions of interest (the 17 May meeting reported 68, including non-web sign-ups), 217 mailing-list subscribers, and a 125-response financial-interest survey (120 unique respondents). [FACT — live D1, 24 Jun 2026] ~12 people offered to join the steering committee, consistent with the ~9–15 active-volunteer signal in the data. [FACT]
• Depth of interest is no longer “untested.” In the financial survey, 106 of 125 respondents expressed positive interest in contributing (67 yes-definitely, 39 yes-probably) and ~98 are local (Cygnet or Huon Valley). [the survey-expressed contribution bands are removed from the public copy — see the treatment note] [FACT — live D1, 24 Jun 2026]
• Critical guardrail. These are expressions of interest in a survey — not pledges, not committed capital, and not evidence of available funds. They must always be described that way, and the real conversion from “I’m interested” to “I have contributed capital” can only be tested later, with a designed and legally-reviewed instrument. [FACT] But the leading indicator is now strong and measured, not assumed — a materially better evidence base than “68 want to be kept informed.”
• Benchmark for what’s needed: Broomehill converted 75 of ~250 residents into shareholders (~30% of the town); Grong Grong reached 169 shareholders by including diaspora. [FACT] Against those, a local base of ~98 financially-interested respondents in and around Cygnet is a credible foundation for a future raise — though the per-capita ask still depends on a capital requirement the project has not yet verified (§8).

12. Feasibility gaps & Stage 2 work plan

A completed feasibility study requires these professional inputs. They are sequenced so each unlocks the next.

Tier 1 — unlock the numbers (do first):

1. Independent commercial valuation of the property. [STAGE 2]
2. Building-condition + heritage-works assessment (structural engineer + heritage architect + BCA/DDA surveyor), defining “minimum viable reopening” vs “full restoration,” including asbestos. [STAGE 2] (Resolves the project’s largest unknown.)
3. Legal options paper (co-op solicitor): distributing vs non-distributing; CNL-compliant rules; the liquor-licence-holding mechanism; member-capital instrument and disclosure obligations; treatment of the title caveats and adjacent parcel. [STAGE 2]

Tier 2 — build the model (after Tier 1): 4. Costed financial model — capital stack and operating P&L/cash-flow using the valuation, the works scope, and award-based staffing; conservative, benchmark-disciplined. [STAGE 2] 5. Active grant prospecting against the §8.3 list, conditioned on the structure decision. [STAGE 2] 6. Lender engagement (Bank Australia / SEFA) once a model exists. [STAGE 2]

Tier 3 — test the community (later): 7. Insurance quotes (PL, D&O, workers’ comp, heritage building). [STAGE 2] 8. Member-capital appetite test — a properly-framed, legally-reviewed gauge of willingness to contribute, distinct from the EOI. [STAGE 2]

Funding the study itself: the Tasmanian Community Fund (Community Action stream, 2026 round closing 21 Aug 2026) is a plausible source for feasibility/consultation costs, provided an eligible incorporated entity exists to apply. The round dates are [FACT]; applicant eligibility and fit are [STAGE 2].

13. Preliminary conclusion (qualified)

On the evidence assembled, the model has clear mainland precedent: community co-operative ownership of a rural Australian pub is proven and repeatable. Community interest is now measured, not assumed — a 120-respondent financial survey with 106 expressing positive contribution interest and ~98 local (§11) is a genuinely strong leading indicator, even though it is survey interest rather than committed capital. The steering group has already done credible, compliance-aware groundwork (notably the draft rules), and has lodged a conditional EOI to stay in the current sale process. Whether the model converts into a Cygnet acquisition — given the unverified capital requirement, the undecided legal structure, and the licence constraint — is the open question this draft cannot finally answer.

But this is not yet a completed finding of feasibility, for reasons no amount of desktop research can resolve: the capital requirement is genuinely unknown without a valuation and building assessment; the legal structure is undecided and gates everything; and the licence cannot sit with the co-op. The responsible conclusion is therefore:

Continue — and pursue both tracks. Push the near-term opening the group has already created — the lodged EOI and a possible exclusivity/deposit arrangement — to its honest conclusion, subject to legal confirmation; and in parallel commission the Tier 1 professional inputs in §12 so a real feasibility study can decide viability. Keep public communication Stage-1: no implied funded purchase, no promised return. The 2 July sale is a long shot, but it is a live one the group is actively in — treat it that way, not as already lost.

This draft’s value is that it tells the steering group exactly what to commission next, gives whoever does the formal study a structured, sourced starting point, and is grounded in the project’s own live engagement data rather than a stale snapshot.

14. Sources & confidence register

14.1 Internal sources (project corpus)

• Property/title: internal/property_status_check.md; internal/title_search_2026-05-19/analysis.md.
• Heritage/building: internal/heritage_desktop_research.md; docs/website_content/heritage_and_building_briefing.md.
• History: internal/research/commercial_hotel_history.md.
• Finance/assumptions: internal/finance_assumptions_book.md; internal/assumptions-register.md; internal/capital_model_safety_report.md.
• Legal/governance: docs/website_content/{legal_and_licensing,governance,financial_and_asic}_briefing.md; internal/research/comprehensive_gap_analysis.md; internal/legal_handoff/.
• Case studies (validated): internal/research/case_study_cleaned.md; docs/website_content/australian_community_pub_case_studies.md.
• Grants: docs/research/grant_landscape.md.
• Draft co-op rules: steering group “CoOp Fed Table inputs” working document (Co-operative Federation format).
• EOI / engagement data: internal/eoi_skills_inventory_2026-06-24.md (live D1 aggregate, 24 Jun 2026 — 43 EOIs, 120 financial-survey respondents, 106 positive, ~98 local); internal/eoi-role-matrix.md; EOI database (D1 bottompub-eoi).

14.2 External sources (verified URLs)

• Co-operative Federation of Australia — feasibility study guidance: https://fed.coop/co-operatives-in-australia-a-manual/part-two-forming-a-co-operative/can-it-work-the-feasibility-study-and-business-plan/
• CBOS — co-operatives (formation, structure, disclosure): https://www.cbos.tas.gov.au/topics/licensing-and-registration/co-operatives
• Co-operatives National Law (Tasmania) Act 2015: https://www.legislation.tas.gov.au/view/html/inforce/current/act-2015-006
• Treasury Tasmania — liquor licences (“granted to a person, not a company or club”): https://www.treasury.tas.gov.au/liquor-and-gaming/liquor/licences
• Liquor Licensing Act 1990 (Tas): https://www.legislation.tas.gov.au/view/html/inforce/current/act-1990-044
• Grong Grong (Royal Hotel): https://theshout.com.au/australian-hotelier/nsw-country-pub-becomes-a-cooperative/ ; https://aboutregional.com.au/heres-cheers-to-grong-grong-and-the-locals-who-bought-their-own-pub/391025/
• Sea Lake (Royal Hotel co-op): https://coopfarming.coop/stories/community-co-op-revitalises-condemned-pub/
• Lockington Community Hotel: https://www.lockingtonhotel.com.au/about
• BCCM (Co-operative Capital Units / capital framework): https://bccm.coop/ ; https://bccm.coop/co-operative-capital-units-ccus-empowering-australian-co-operatives-with-flexible-funding-solutions/
• Plunkett (UK) community pubs survival rate: https://www.morningadvertiser.co.uk/Article/2026/04/21/community-owned-pubs-delivering-strong-survival-rates/
• ATO small-business benchmarks (pubs, taverns, bars): https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/small-business-benchmarks/in-detail/pubs-taverns-and-bars
• Tasmanian hospitality sector: https://www.business.tas.gov.au/industries-in-tasmania/hospitality
• Tourism Tasmania snapshot (YE Dec 2024): https://www.tourismtasmania.com.au/siteassets/documents/visitor-snapshots/2025-04-tasmanian-tourism-snapshot-ye-december-2024.pdf
• New Norfolk population (ABS 2021): https://www.abs.gov.au/census/find-census-data/quickstats/2021/UCL614002
• Heritage Tasmania — Built Heritage Grants Scheme: https://heritage.tas.gov.au/built-heritage-grants-scheme
• Growing Regions Program: https://www.infrastructure.gov.au/territories-regions/regional-australia/regional-and-community-programs/growing-regions-program
• Tasmanian Community Fund: https://www.tascomfund.org/
• SEFA: https://sefa.com.au/

14.3 Items needing primary-source confirmation before public/legal use

• Exact section of the Liquor Licensing Act 1990 establishing the natural-person rule (confirmed on the live Treasury page; section reference not yet pulled from the Act).
• Whether a non-distributing co-op triggers the disclosure-statement regime (confirm against CNL).
• ATO benchmark figures (read off the ATO page, not a secondary source).
• Southern Tasmania tourism economic-impact figures (base year; PDF not directly fetchable).
• Reported acquisition and renovation figures (no independent valuation or building assessment exists).

End of draft v0.1. Next step: QA pass (Codex / Gemini / Hermes), then steering-group review and human sign-off. This document must not be published or moved into the public site or the /admin/ vault while it contains illustrative financial figures, per the CLAUDE.md human sign-off gate for forecast models.