Mall sold before it is built?
Developers of the R40-million Concordia shopping centre are ready to sell off the project following Knysna Municipality’s “delay” in signing off an agreement with them.
This, and what seems to be conflicting promises made by two consecutive municipal administrations, have left the developers caught between two bureaucratic chairs.
The centre was initially planned to open this month (November 2018) but to date, little to no construction has taken place aside from levelling the ground and the erection of signs.
According to a council resolution in April 2018, the applicant is responsible to pay development charges in instalments over 24 months and rebates on services for the first three years.
“We’ve had discussions with the municipality but nothing has been signed off yet. We’ve negotiated reduced augmentation rates and are eager to start this development. But as things stand we are yet to receive the agreement in writing,” said Variflex CEO Ian Raubenheimer, who spoke on behalf of the developers.
‘No progress for almost a year’
“We are waiting for feedback from the municipality. But it’s been almost a year now and no progress has been made with regards to the development. We are considering pulling out,” Raubenheimer said, adding that developers are in negotiations with two prospective buyers who have expressed interest in taking over the development. “The main issue is that nothing happens with this municipality. We know that the municipal manager has received the paperwork, but we are still waiting for any sort of feedback.”
Earlier this year the municipality refused to waive the development charges (augmentation fees) for bulk services or the first three years’ rates and taxes as promised by the previous administration.
As a compromise, Knysna council said 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 apply. At the time, councillors agreed unanimously that the benefits of a shopping centre for the community of Concordia and Greater Knysna area will be immense, as it would not only generate hundreds of jobs in the coming years but also boost the local economy.
Benefit for struggling residents
It would also save struggling residents the taxi fare of going to shop in the Knysna CBD, as stores such as Shoprite had already committed to be key tenants at the centre.
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. Councillor Peter Myers, who sits as chairperson of the Technical Services as well as Planning & Integrated Human Settlement committees, stated that any decision regarding development charges for Concordia Mall would have to be discussed at a council meeting.
“An agreement between the developers and officials of the municipality can’t bind council to uphold that decision. It would have to come before council,” he said, adding that it is unlikely that this matter will still be decided by council this year as it has not yet been listed for discussion on the agenda. The last council meeting for the year is scheduled for 29 November.
Variflex CEO Ian Raubenheimer at the site where Concordia Mall was to be constructed. Developers are yet to reach an agreement with the municipality regarding augmentation fees.