Good Hope Centre: need to recoup costs

THE CITY of Cape Town notes the opinion piece by Dr Siona O’Connell (March 16) which mentions the availability of the Good Hope Centre.

The city’s strategic assets are not hired out to community groups or the business sector based on discrimination of any kind.

The reality is that the Good Hope Centre (GHC) requires significant expenditure for its maintenance and upgrades. For the 2014/15 financial year, the facility earned only 42 percent of its budgeted revenue. It has been unable to meet its revenue targets for a number of years.

The city has a limited public purse, and to take millions from it for repairs to the GHC will mean that other pressing service delivery commitments will have to be put on hold. The cost of necessary repairs to the facility is estimated at R16 million, and its annual income less than R3m.

Although 101 events were held at the GHC during the 2014/15 financial year, a number of events were either hosted at no cost or at a reduced tariff, based on their nature and impact.

Due to the significant losses being incurred under the current pricing structure, the city explored the possibility of letting the entire facility to a business/es engaged in the film industry based on a market-related monthly rental.

This option would yield the most optimal return. However, the film industry will only consider making the necessary large capital investment in the GHC if the city leases the venue for a minimum of two years and 11 months.

The potential lessee will be responsible for the upkeep, maintenance and security of the property, to the satisfaction of the city, which will significantly reduce the maintenance costs during the term of the lease agreement.

The city will not make a loss, but will benefit financially in the form of a market-related rental, future rates and taxes, and the upgrading of a key strategic asset.