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Feasibility & costs briefing

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Feasibility & costs briefing

What an actual Stage-2 feasibility study would scope, what it would cost, and the recurring overheads the original proposal didn’t carry.

Last reviewed: 2026-05-10. Sources cited inline. See docs/research/citations.md for the full reference list and verification status.

This briefing is the financial-realism counterpart to the legal & licensing, financial & ASIC, governance, and heritage & building briefings. The aim is to make “commission feasibility work” a concrete, scoped step rather than a placeholder bullet point.

It is not a feasibility study. It is what a feasibility study would have to contain to be credible.

1. The five workstreams a Stage-2 feasibility study has to cover

A credible feasibility study moves the project from “unknown unknowns” to known unknowns — quantified, scenario-tested, and decision-ready. Five workstreams:

Building condition & heritage

Independent structural engineer’s report, BCA / DDA compliance schedule, Heritage Tasmania works pathway. Deliverable: a written assessment of what the building is actually like, what it would cost to bring it to assembly / Class 6 hospitality compliance, and what Heritage Council approvals each element of work would need. (See the heritage & building briefing for the legal regime.)

Market assessment

Local catchment analysis, Huon Valley demand for pub-style accommodation, dining, events. Tourism flow data — Tourism Tasmania publishes regional snapshots showing the Huon–Far South region with Average Daily Rate (ADR) of approximately $154–$175 and RevPAR of approximately $131–$175 for accommodation. (Source: Tourism Tasmania regional tourism snapshots; specific URL pending verification.) The model has to live within those numbers, not above them.

Capital stack & financial projections

The full cost stack — purchase price, capex for compliance and restoration, working capital, contingency — and how it would be funded across grants, member shares, debt, and social finance. Detail on the funding side is in the capital pathways briefing. The financial model is the deliverable; sensitivity is the test.

Operating model

Roster, wage map, supply chain, opening-hours model, food-and-beverage cost ratios, accommodation operating model. The operating model has to comply with the Hospitality Industry (General) Award 2020 (MA000009) — minimum hourly rates, weekend and public-holiday penalty rates, allowances. (Source: Fair Work Commission — Modern Awards database.)

Governance & legal-structure costs

Co-op formation, drafting CNL-compliant rules, Registrar approval, Disclosure Statement preparation, initial liquor and food licensing, accountant and lawyer engagement for the formation phase. None of these are free; the feasibility budget has to itemise them.

2. The consultants a feasibility study needs

Because the Commercial Hotel is on the Tasmanian Heritage Register (Place ID 3472), standard commercial-renovation estimates are not enough. The feasibility budget has to engage consultants with heritage-specific competence:

Heritage architect with experience navigating the Heritage Council Discretionary Permit pathway under Part 6 of the Historic Cultural Heritage Act 1995 (Tas).
Structural engineer competent on 1880s brick-and-roof construction.
BCA / DDA compliance surveyor to scope the change-of-use upgrades (fire safety, accessibility, structural).
Hospitality feasibility consultant to do the operating-model and break-even analysis.
Building condition reporter — separate from the structural engineer; produces the building-condition document a buyer would need.
Independent valuer — a market-value report from a registered valuer with regional Tasmanian commercial-hospitality experience.

Specific rate cards for these consultants in regional Tasmania are not published as a single schedule. The feasibility budget has to obtain quotes during scoping. This briefing flags the categories rather than fabricating numbers.

3. Recurring compliance and insurance costs the original proposal didn’t carry

The original financial model did not line-item the following recurring costs. A real operating budget has to:

Public liability insurance for licensed premises — typical sums insured $10M–$20M for hospitality. Premiums driven by venue type, hours, capacity, claims history.
Workers’ compensation under WorkCover Tasmania — premium based on remuneration and industry classification rate. Hospitality has its own WIC code; small-employer discounts may apply.
Directors’ and officers’ (D&O) liability insurance — material because every director on a co-op board is also an “associate” of the licensee under s.3A of the Liquor Licensing Act 1990 (Tas) and is in scope of the fit-and-proper test. (See the governance briefing, section 6.)
Building and contents insurance — heritage-listed properties carry a premium loading; replacement cost has to allow for the bespoke materials and approved methods that come with a THR listing.
RSA (Responsible Service of Alcohol) training for the licensee and every staff member who serves alcohol. Refresher cycles apply. (See the legal & licensing briefing, section 2.)
Food Safety Supervisor certification under the Food Act 2003 (Tas) — at least one nominated supervisor on the food-trading roster.
Annual liquor licence fees — payable to the Liquor and Gaming Branch of Treasury Tasmania; figures are in the published fee schedule (changes year on year).
Food premises registration — with Huon Valley Council under the Tasmanian food regulatory framework.
Music licensing — APRA AMCOS for songwriter / publisher rights and PPCA for sound recording / performer rights, separately, for any music played publicly (live, recorded, or background).

These are not catastrophic individually. In aggregate they’re material — and a feasibility budget that omits them isn’t a feasibility budget.

4. The ‘go / no-go’ decision criteria

The outcome of a feasibility study isn’t a paragraph; it’s a recommendation. The recommendation has to survive sensitivity analysis. A credible study tests:

Revenue stress — 5%, 10%, and 15% reductions on base-case turnover, applied independently to bar, food, accommodation, and events. Where does the model break?
Cost shocks — 5% and 10% increases to wages, energy, and food cost-of-sales, applied independently.
Timeline drift — 3-month, 6-month, and 12-month delays from target opening to actual opening (because heritage projects routinely overrun).
Interest-rate sensitivity — 1% and 2% increases on any commercial debt, applied to the full term.
Volunteer capacity — model the impact of any “soft” labour assumptions failing, given Fair Work constraints (see Reality check tile 09).
Catastrophic external shocks — bushfire impact on the Huon Valley tourism flow (memory of the 2018–19 fires is still fresh), pandemic-style trading restrictions, prolonged drought affecting agricultural-supplier relationships.

The model has to remain solvent through at least the first three of these, ideally all six. If it doesn’t, the feasibility recommendation is “don’t proceed at this scale” — and that’s a useful answer, not a failure.

5. Frameworks worth using rather than reinventing

Three published frameworks are recognised practice for community-pub feasibility:

BCCM — Community Investment for Australian Co-operatives: A Handbook (PDF). The Australian peak body’s manual on capital stack planning, legal structure, CNL disclosure, and member-investor architecture.
Plunkett UK — How to set up a Community Pub (toolkit and supporting publications). The UK reference for community-pub formation and feasibility, with hundreds of operating examples to draw from. (See plunkett.co.uk for the current resource set.)
Australian government project-development frameworks (e.g. Victorian Government’s Project Development and Due Diligence Guidelines, ADAPTING analogous frameworks from Tas Government infrastructure project guidance) — useful templates for scoping a preliminary business case at P50 and P90 confidence levels.

The steering group does not need to invent a feasibility methodology. It needs to apply one of these.

6. What this briefing does not say

This briefing does not say: here is the feasibility study. It hasn’t been commissioned. The numbers haven’t been generated. The scenarios haven’t been run. No consultant has been engaged.

What it says is: when the feasibility step is reached, this is what it has to do, this is what it has to cost out, and this is what it has to test against. A community asked to back the project at Stage 2 deserves to know that the work was real, not a tick-box.