Raffles lease in St Andrew’s lands Labour Party a cool €220,000 yearly

The former Raffles discotheque in St Andrew’s will be transformed into a 24-hour child care facility and land the Labour Party €220,000 yearly in rental income.

The dilapidated historic building is owned by the PL and was granted on a 26-year concession to a CE Education and Catering in April last year for a yearly ground rent of €220,000. The ground rent is revised upwards every five years by 15%.

CE Education and Catering, a fully owned subsidiary of CE Holdings based in Mosta, is obliged according to the deed to restore the existing buildings, build a child care centre and a restaurant.

The deed obliges the company to provide a programme that covers “all aspects of child development, including indoor playing area for children and toddlers”.

It also envisages the construction of an indoor restaurant spread over 375sq.m and a multi-purpose high end venue and lounge area over 983sq.m. Two kiosks on the perimeter of the site may also be included in the plans.

It is the company’s responsibility to obtain all relevant planning permits for the project. A development application is currently pending in front of the Planning Authority and the case officer is recommending approval.

The deed prohibits the company from using the site or any part of it as a discotheque or any form of entertainment apart from that indicated in the request for proposals.

Who are CE Holdings?

CE Holdings, the parent company, is equally owned by Mario Brincat, Mark Camilleri and Darren Alfred Vassallo La Rosa and has a share capital of €600,000.

It holds a minuscule shareholding of 0.13% in Gozo Malta Fixed Link Ltd, which was one of four bidders that showed interest in developing the Gozo-Malta tunnel. Gozo Malta Fixed Link includes amongst its shareholders, Luke Chetcuti of Hugo’s fame.

CE Education and Catering was granted a temporary and revisable sub-emphyteutical concession on 1 April 2021, documents filed with the public registry show.

The agreed lease payment includes the sum of €13,393 owed to the government, which constitutes the original ground rent when the property was transferred to the PL in 1979.

Raffles has a superficial area of 4,269sq.m but the built-up areas cover 1,110sq.m.

The Raffles agreement followed a request for expression of interest for lease and commercialisation of the site that was issued in February 2019 as the PL sought to maximise the revenue potential of its properties.

Commercialising party property

Raffles was a popular disco in the 1980s run by brothers Simon and Mark Grima. The historic building was known as the British Admiralty House and formed part of the sprawling British army barracks in Pembroke before the land was passed on to the Maltese government in the late 1970s ahead of the British military’s withdrawal from Malta.

Raffles and Australia Hall in St Andrew’s had been transferred to the Labour Party by the Labour government in 1979 as compensation for the expropriation of the Freedom Press in Marsa, which the party owned, to make way for the Malta Shipbuilding.

Australia Hall was sold in July 2014 to A.H. Development, a subsidiary of the Fino Group, for just €582,000. The PL had said that the final price took into consideration unspecified outstanding debts with the buyers.

But the sale is still subject to court proceedings after the party opposed a tax assessment by the Inland Revenue Department for an additional payment of €14,426 in capital gains tax. The tax authorities originally valued Australia Hall in excess of €5 million but the PL contested the price tag and this was revised downwards to €2 million.

Last year, the PL issued an expression of interest for the disused Rialto Cinema building in Bormla. The party wants to remain the owner of the site but expects a return through a lease agreement with the winning bidder. The party had said it wanted the proposed commercial activities to be “viable” and of “a high level”.

The winning bidder had to be selected by December last year. The theatre was used during the election campaign for press conferences given by Robert Abela.

The commercialisation of these buildings ensures the party receives a steady stream of income to finance its operations.

Parties in debt

Earlier this year, MaltaToday reported that One Productions, the Labour media house, owed utility billing company ARMS a total of €1.25 million in pending dues. The Nationalist Party’s Media.Link owed ARMS €3.5 million.

Since then, PN leader Bernard Grech has publicly admitted the party has a total debt of €32 million and will be constrained to sell some of its locality clubs to bring the situation under control.

Grech also took a dig at the PL over its ownership of large properties, which he said were gifted to the party by past Labour governments.