Con­cor­dia cen­t­re can­ned?

Knysna-Plett Herald - - Voorblad - Ya­seen Gaf­far & Il­se S­choon­raad

The highly an­ti­ci­pa­ted R40-mil­li­on s­hop­ping cen­t­re de­ve­lop­ment in Con­cor­dia in Knys­na is han­ging in the ba­lan­ce. This co­mes af­ter Knys­na Mu­ni­ci­pa­li­ty ap­pro­ved the de­ve­lop­ment of the cen­t­re sub­ject to a ser­vi­ce agreement that does not sit well with the de­ve­lo­per, Va­riflex Tra­ding.

The mu­ni­ci­pa­li­ty has re­fu­sed to wai­ve the de­ve­lop­ment char­ges (aug­men­ta­ti­on fee) for bulk ser­vi­ces or the first three y­e­ars’ rates and taxes as pro­mi­sed by the pre­vi­ous ad­mi­nis­tra­ti­on.

Coun­cil com­pro­mi­ses

At its meet­ing on Thursday 29 March, Knys­na coun­cil com­pro­mi­sed in as much that t­hey would al­low the de­ve­lop­ment char­ges to be paid in in­stal­ments o­ver 24 mont­hs and agreed to re­ba­tes on rates and ser­vi­ces o­ver the first three y­e­ars: 100% re­ba­te in y­e­ar one, 75% in y­e­ar two and 50% in the t­hi­rd. Af­ter this full rates would be pa­y­a­ble.

The mat­ter has been drag­ging on for y­e­ars fol­lo­wing agreements with the pre­vi­ous ad­mi­nis­tra­ti­on at Knys­na Mu­ni­ci­pa­li­ty, who at the ti­me ap­pro­ved no aug­men­ta­ti­on fees and “f­ree” ser­vi­ces for a pe­ri­od of three y­e­ars. But CFO M­bu­le­lo Me­ma­ni ma­de it cle­ar that the agreement with the pre­vi­ous ad­mi­nis­tra­ti­on is in­va­lid.

“The mu­ni­ci­pal ma­na­ger at the ti­me [Grant Eas­ton] had no aut­ho­ri­ty to ma­ke such agreements. On­ly coun­cil can de­ci­de, and in any ca­se, it is this mu­ni­ci­pa­li­ty’s po­li­cy to re­quest aug­men­ta­ti­on fees and char­ge rates for ser­vi­ces,” he said.

‘Bu­reau­cra­cy too cos­t­ly’

But, ac­cor­ding to John Rim­bault, a di­rec­tor of Va­riflex Tra­ding, the de­ve­lop­ment is no lon­ger fi­nan­ci­al­ly vi­a­ble and t­hey are look­ing at sel­ling the land. “The char­ges will eat a­way at the al­re­a­dy me­ag­re pro­fit we stand to ma­ke. Any de­ve­lop­ment has sub­stan­ti­al fi­nan­ci­al ris­ks, ho­we­ver, in the ca­se of Con­cor­dia, the­se ris­ks are ex­ag­ge­ra­ted. As it is a lo­win­co­me a­rea, we can on­ly a­chie­ve li­mi­ted ren­tal le­vels in the s­hop­ping cen­t­re. We ha­ve writ­ten to the ma­na­ger of In­te­gra­ted Hu­man Sett­le­ments, Ma­wet­hu Penxa, and of­fe­red the land to the mu­ni­ci­pa­li­ty. Ap­pa­rent­ly t­hey are in di­re need of land for hou­sing. The cen­t­re ne­go­ti­a­ti­ons ha­ve ta­ken y­e­ars, but it seems that bu­reau­cra­cy is just too cos­t­ly for e­co­no­mic gro­wth.”

Cen­t­re ‘will do won­ders’

Va­riflex CEO Ian Rau­ben­hei­mer is mo­re po­si­ti­ve, ho­we­ver. “We are still keen to go a­he­ad with the de­ve­lop­ment and would lo­ve to meet with the of­fi­ci­als and all the ro­le play­ers to dis­cuss our op­ti­ons. We ha­ve not re­cei­ved for­mal writ­ten con­fir­ma­ti­on fol­lo­wing the coun­cil de­ci­si­on. I am su­re we can co­me to so­me form of mu­tu­al­ly be­ne­fi­ci­al agreement. This de­ve­lop­ment will do won­ders for the com­mu­ni­ty of Con­cor­dia and sur­rounds.”

Con­cor­dia ward coun­cil­lor Ve­li­le Waxa said the be­ne­fits of a s­hop­ping cen­t­re for the com­mu­ni­ty of Con­cor­dia and G­re­a­ter Knys­na a­rea will be im­men­se, as it will ge­ne­ra­te hund­reds of jobs in the co­ming y­e­ars and boost the local e­co­nomy. It would al­so sa­ve st­rug­gling re­si­dents the taxi fa­re of going to shop in the Knys­na CBD.

S­hop­ri­te had al­re­a­dy com­mit­ted to be the key te­nant at the cen­t­re that was due to o­pen in No­vem­ber.

Wai­ving fees ‘not po­li­cy’

At the coun­cil meet­ing all par­ties the­re u­na­ni­mous­ly agreed that no fees could be wai­ved as this was not po­li­cy. “Aug­men­ta­ti­on fees are u­su­al­ly paid up­front, but this mu­ni­ci­pa­li­ty wants to be le­nient to en­coura­ge and sup­port de­ve­lop­ment. It is for this re­a­son that we ha­ve sug­ge­sted that aug­men­ta­ti­on fees be paid in in­stal­ments o­ver a pe­ri­od of 24 mont­hs,” ma­yor E­le­a­no­re Bouw-Spies said.

ANC coun­cil­lor Au­brey Tswen­ga agreed, saying, “We need this de­ve­lop­ment for our com­mu­ni­ty. The de­ve­lo­pers must pay aug­men­ta­ti­on fees and hit the ground run­ning.”

Fi­nan­ci­al im­pli­ca­ti­ons for mu­ni

It was sta­ted in the coun­cil a­gen­da that “it should be no­ted that the Knys­na Mu­ni­ci­pa­li­ty: S­tan­dard Mu­ni­ci­pal Land Use Plan­ning By-Law pro­vi­des in C­hap­ter VIII, that an ap­pli­cant must pay de­ve­lop­ment char­ges (aug­men­ta­ti­on and con­necti­on fees) to the mu­ni­ci­pa­li­ty in re­spect of the pro­vi­si­on and in­stal­la­ti­on of ex­ter­nal en­gi­neer­ing ser­vi­ces.”

Coun­cil­lors we­re al­so ad­vi­sed that the­re would be fi­nan­ci­al im­pli­ca­ti­ons for the mu­ni­ci­pa­li­ty should the aug­men­ta­ti­on fees be com­ple­te­ly wai­ved.

The ci­vil aug­men­ta­ti­on fees a­mount to a­round R980 000. This would in­cre­a­se an­nu­al­ly as coun­cil ap­pro­ves new ta­riffs, and would al­so in­cre­a­se with the in­clu­si­on of e­lec­tri­ci­ty.

The de­ve­lo­pers we­re to meet on Wed­nes­day 4 A­pril, to co­me to a fi­nal de­ci­si­on a­bout the de­ve­lop­ment.

P­ho­to: Ya­seen Gaf­far

Ian Rau­ben­hei­mer, one of the de­ve­lo­pers of the Con­cor­dia S­hop­ping Cen­t­re, stands at the si­te w­he­re the cen­t­re is pro­po­sed to be de­ve­lo­ped.

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