DA looks at selling HQ and staff cuts
● The DA is considering selling its headquarters in Bruma, Johannesburg, as the party faces a serious cash crunch ahead of the local government elections.
Party CEO Simon Dickinson confirmed that the DA is contemplating putting Nkululeko House, which was unveiled to much fanfare three years ago, on the market.
The DA has also informed employees of another possible round of retrenchments. This follows retrenchments in May last year.
The Sunday Times has seen an internal memorandum signed by Dickinson and finance chair Dion George informing both staff and party leaders of a looming restructuring process.
The letter singles out the “devastating effect that Covid-19 has had on lives and livelihoods with subsequent damage to our economy” as a reason for the dire finances.
“We have the Party Political Funding Act coming into place on 1st April 2021. We anticipate that our donors will continue to support the DA in our fight to achieve better outcomes for South Africa, however it is likely that it will become generally harder for us, and for smaller parties, to raise funds in the future, especially with the new limitations set in place,” the letter reads.
Although disputing that the party is facing a shortfall to fund the coming elections, Dickinson said the DA is seriously considering the sale of Nkululeko House.
The DA purchased the building after it took control of both the cities of Tshwane and Johannesburg in the 2016 local government elections. The building was officially opened in 2018 with the hope that the DA would win Gauteng in the national government elections in 2019.
Instead, the party lost voter support. Now, with party leader John Steenhuisen and federal council chair Helen Zille at the helm, there is speculation that the DA no longer has the intention of expanding outside of the Western Cape, where it currently governs. Steenhuisen has since denied this.
Dickinson said the Covid pandemic made the DA realise that it does not need as many properties as it currently owns and it is contemplating the sale of its head offices.
“We can live with the option where we stay in Nkululeko House or we can either rent the empty space that is not being used any more or sell the building.”
He said the party had discussed this at its federal council meeting on Friday.
A DA leader who asked to not to be named said the party was willing to sell the building below market value.
“The DA spent around R43m for Nkululeko House but now they are willing to settle for R22m because of desperation. The DA has never been in a position where cash reserves are less than R50m. Previously, more than R100m was spent for elections — if elections take place in November this year, then it is going to be a problem,” the insider said.
Steenhuisen said in an interview with the Sunday Times the party relied on private donations and that due to tough economic conditions the fundraising space was constrained.
“Also, what we’ve had to do is embark on a process — like media companies, like private enterprises — of restructuring to ensure that we bring our operational costs into our fixed income.”
Steenhuisen said the DA did not “ever want to enter into a situation like [ANC headquarters] Luthuli House”, which on “almost a monthly basis cannot pay salaries”.
He said the DA’s focus “is on restructuring to ensure that our financial sustainability continues”.
“The worst is not being able to pay your bill, getting your website confiscated because you have not paid your account.”
He said that the party was looking at whether it needed big offices all over the country given the new normal of virtual meetings and whether it was worth it to fly people around the country to attend federal council meetings.
“I never want to see on the front page of your newspaper that the DA has not been able to pay salaries,” he added.