City slams claims of botched Foreshore auction

THE City of Cape Town has rubbished claims made by social justice advocacy group Ndifuna Ukwazi of a botched auction of the sale of Site B in the Foreshore to Growthpoint Properties.

“The claims by Ndifuna Ukwazi with respect to the sale of Site B, Foreshore, to Growthpoint Properties are not correct. The City did not sell the property at the incorrect bulk amount.

“On May 22, 1996, the provincial government approved the amendment of the rezoning conditions to increase the maximum floor area of the combined Blocks A and B (Block AB) from 41 000m² to 69 000m²,” deputy mayor Ian Neilson said.

Last week Ndifuna Ukwazi obtained documents which raised serious questions about top City officials implicated in a so-called botched auction of the prime piece of land. The City gave notice in local newspapers of an application by Growthpoint Properties Limited to develop Site B, 3 932m² of prime land on the foreshore.

Growthpoint plans to develop a 100m skyscraper that “aims to be a world-class, timeless, innovative, sustainable building, which will serve to inspire future buildings”.

What caught the organisation’s eye in the City’s notice was that Growthpoint is asserting that it already has the rights to build 46 000m² of bulk on the land. “The balance of the floating bulk on Blocks A and B is therefore approximately 46 000m² and is available in the area described as Block AB, which includes the site of the Icon building.

When Block B1 was bought by Growthpoint, they only purchased 17 500m² of that bulk.

Thus, there is a remaining unallocated 28 500m² floating bulk available over the original Site AB, that is owned by the City.” Neilson said it’s incorrect to assume that Growthpoint has automatic access to the floating bulk.

They are required to make applications in terms of the Planning By-law and the Municipal Asset Transfer Regulations if they want to develop their property beyond the 17 500m² bulk.

Ndifuna Ukwazi said there is a significant loss of income: “At R86.5 million for 17 500m², Growthpoint ostensibly paid R4 942 per bulk m², which would have been a fair price for prime land in the inner city and surrounds.

“Over the past few years, inner city land has sold for between R4 000 and R5 000 per m² and sometimes much higher. However in reality, with 46 000m² bulk rights, Growthpoint paid closer to R1 880 per bulk m², which is less than half the price. In effect, Growthpoint captured some of the most valuable land in our city. Had Growthpoint paid a market price, we estimate the land could have sold for between R185m and R240m, leaving the City out of pocket by at least R100m, and possibly more,” it said.