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Matthew Vella
Spinola Development, the company which owns the Portomaso apartments, has redeemed the lease of the land at the luxury St Julians development for a total of Lm800,000.
Granted 31 acres of land back in 1964 for 150 years, the company paid an annual rent of Lm1,000. It has now has paid the government more than double it would have to pay in 2114 for the absolute ownership of the land.
The company is now asking the owners of its 150 or so apartments whether they are interested in redeeming their temporary leases ahead of 2114. No price has yet been set by the company.
A spokesperson for the Prime Minister confirmed that with 109 years left until the expiration of the emphyteusis, the amount that would have to be paid for the transfer of the land would have been Lm109,000.
Maurice Tabone, sales and marketing director, said the company wanted to consolidate its asset base: “The law might change so it made sense that we buy it, even since a tender was issued and someone else might bid for it. It was in our interest to redeem the emphyteusis.”
He acknowledged that the price paid was significant. “It is closer to a million if you had to include stamp duty, other legal fees and interest,” Tabone said.
The company, which has told residents it would be willing to redeem the emphyteusis for the remaining 109 years, has not established the price it will be offering.
“We sent clients a letter informing them we had purchased the freehold, and that ground rent was payable to Spinola Development, and proposed that in the near future whoever was interested could redeem the emphyteusis,” Tabone said.
Owners of the apartments whose prices range from Lm80,000 to over Lm320,000, currently pay a ground rent of Lm1 every year – it would cost Lm180 in 2114 for the transfer of absolute ownership to the dwellers.
Several have written back to the company saying they are interested in becoming full owners of their apartments, but are asking to know the price beforehand.
“We haven’t set the formula yet… Naturally, one would have to be reasonable about it,” Tabone said.
Residents forming part of the Portomaso Apartments Residents Committee (PARC) have said they had repeatedly written to the government enquiring whether they could redeem the temporary lease but there was never any acknowledgment from the government.
A call for tender was published on 16 August 2005 in the government gazette.
Maurice Tabone said the company had been in discussions with the Lands Department to establish a method for Portomaso’s dwellers to pay their ground rents directly to the government.
“There was a problem on how the ground rent on the area should be split between all the different homeowners. The discussion that took place was that it would have been too cumbersome or the Lands Department to issue so many individual receipts for a ground rent costing Lm1 a year for an apartment and 20c for a garage. The department then decided to issue a call for tender.”
Portomaso residents were aware of the tender but could not get organised to submit a tender. A spokesperson for the Prime Minister said anyone could have applied for the tender. “Unfortunately, there was only one bidder,” the spokesperson said.
The Office of the Prime Minister denied any meeting between Spinola Development with the Prime Minister or the Home Affairs Minister prior to the issue of the call for tenders.
Spinola Development has already paid Lm400,000 on contract, and will pay the remaining balance over the next two years.
The notary public for the sale and transfer of the land was deputy leader and Labour MP Charles Mangion.
mvella@mediatoday.com.mt
The development of the Hilton Hotel took off in 1964 when the Maltese government granted 31 acres of land to Spinola Development Co Ltd for 150 years, against payment of Lm34,000 and an annual rent of Lm1,000.
The conditions for the granting of the land included that the land had to be used exclusively for tourist development and that a hotel for 400 guests had to be built.
In March 1995, the company submitted an outline application to the Planning Authority for a redevelopment project for a 325-bedroom hotel, 38 cabanas on foreshore, 60 marina apartments, 241 other apartments, a business centre, retail outlets, a conference centre, yacht marina berths and 1,350 parking spaces.
The project was highly criticised by the Planning Authority’s Environmental Management Unit and the development generated protest from a dedicated lobby group called Front Kontra l-Hilton.
In June 1995, the PA approved the outline permit, and on 23 May 1996, planning permission was granted amid protests by groups such as the Front Kontra l-Hilton, an alliance of Friends of the Earth and Moviment Graffitti, which would culminate in a hunger strike by three activists calling for the government to launch an inquiry into the Hilton project.
In February 1997, an Ombudsman’s report into the award of planning permission concluded that “the substantial changes to the original grant conditions, though they may not be in breach of the law, constitute a case of bad administration without due consideration to the national interest.”
Among other findings, the Ombudsman found that various agreement between the developers and the PA were carried out verbally rather than formally and that the government “failed to us its negotiating powers to maximise the benefits to be derived from the deal”.
The Ombudsman also stated that the changes to the original conditions regulating the granting of land were so substantial, that in the public interest and in the interest of good administration, the government “had a moral obligation to refer the proposed concessions for the scrutiny of the Parliament.” |
