PA to appeal €500,000 ‘planning gain’ discount to St George’s Bay developer

The Planning Authority is appealing a decision by its appeals tribunal to slash a planning gain of €623,325 for a St George’s Bay development, to just €116,187

The planning gain, which is used to fund environmental projects in the localities impacted by the development, was levied on the Villa Rosa development
The planning gain, which is used to fund environmental projects in the localities impacted by the development, was levied on the Villa Rosa development

The Planning Authority is appealing a decision by its appeals tribunal to slash a planning gain of €623,325 for a St George’s Bay development, to just €116,187 on an appeal by developer Anton Camilleri.

The planning gain, which is used to fund environmental projects in the localities impacted by the development, was levied on the Villa Rosa development.

The decision sent shockwaves among local councils who fear that the precedent created by the Environment and Planning Review Tribunal’s (EPRT) decision would deprive them of funds.

This is because in its decision the EPRT reverted the monetary value of planning gains imposed by the Planning Authority board when approving major projects, back to a rate of €4.66 per square metre which applied to projects approved before August of the year 2017.

In his appeal Camilleri argued that the imposition of a higher planning gain as fixed by the PA board, created a situation of “inequity” between projects approved just a few months before his project.

In its decision the EPRT concluded that the 400% increase in the planning gain constituted a very “radical” change which required a more “in-depth study”.

The Central Regional Council, which represents 13 councils in Malta’s central region, rebutted that the “inequity” existed when this rate was set at a miserly sum of €4.66, a rate which never changed since 2008 and “therefore does not reflect the increase in today’s property value”.

The planning gain imposed on Camilleri’s project was based on a formula multiplying each square metre earmarked for residential and commercial development (24,933sq.m) by €25.

The PA board established the formula in August 2017 during the processing of an application for an additional five storeys on the 14 East tower in Gzira.

On that occasion board chairman Vince Cassar argued that “to ensure the new rate is applied to all future high-rise developments it should be stipulated as a fixed rate per square metre”.

A rate of €25 per square metre was proposed and approved.

Subsequently the PA’s planning directorate started to base its formula for major projects, including low-rise ones, on this formula.

The same formula was used to establish the planning gain for other major projects, including the Farsons project in Mriehel and DB’s City Centre project in St George’s Bay, the permit for which has since been revoked.

Commenting on his Facebook page, Labour MP Robert Abela – whose firm is directly tasked by the PA to handle its legal caseload – declared that while he believed in the need to “be close to business”, he had no qualms on presenting the appeal because it is important “to keep a certain distance from the business community when the national and community interest demands it… even in cases where such decisions may hurt.”

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