Raffles lease could give Labour €600,000 annually

The Labour Party will retain ownership but derive “a competitive commercial return from the lease/emphyteusis or other arrangements”

The two-floor property is a fully-detached building set on a 4,260sq.m plot, with a footprint of 1,100sq.m and a frontage of 175 metres
The two-floor property is a fully-detached building set on a 4,260sq.m plot, with a footprint of 1,100sq.m and a frontage of 175 metres

The Labour Party looks set to make at least €600,000 a year from leasing its Raffles property, near the Pembroke parade ground, securing a steady income for the next 65 years.

The PL announced this week it was offering a 65-year lease for the commercialisation of the property and was accepting expressions of interest (EOIs).

The two-floor property is a fully-detached building set on a 4,260sq.m plot, with a footprint of 1,100sq.m and a frontage of 175 metres.

A conservative lease estimate of €300 to €550 per square metre annually (floorspace at Tigné is leased for €650 per square metre per annum according to bond market financial analyses) would see the Labour Party registering an annual income between €385,000 and €605,000.

For years, the party attempted to find prospective lessors for the historic building, a former British military premises.

Now, in its document accompanying the request for EOIs, the PL asks for “commercial and high-level business concepts for the development and commercialisation of the property”.

The PL will retain ownership but derive “a competitive commercial return from the lease/emphyteusis or other arrangements”.

Dione Borg, a Nationalist Party candidate for the upcoming European Parliament elections, said that since 1979, the PL had always demonstrated its intention to make millions off the commercialisation of this site. “In 2013 this Labour government even went as far to drop the court cases launched by the previous government against the Labour Party, thus ensuring no more obstacles in the road to commercialisation of the properties,” he said.

Borg said this “morally irregular” behaviour had helped give the PL a huge financial advantage when compared to the PN, which has no properties whatsoever it can commercialise.

“The fund-raising marathons by the PL are a farce and a façade,” he said. “This party that so touted a level playing field for parties when promoting party financing legislating, has morphed into a property agency, making millions off ill-procured properties.”

The Raffles building is conditioned by a specific policy in the North Harbour local plan – ‘New Uses for Historic Buildings’ – which allows the Planning Authority to adopt “a flexible approach” in considering appropriate new uses for scheduled historic buildings.

The inside of the Raffles building is totally gutted, but any development will need to retain the existing structure
The inside of the Raffles building is totally gutted, but any development will need to retain the existing structure

Normal planning requirements, such as floor areas, use, parking standards or contribution to the Commuted Parking Payment Scheme funds, may be relaxed at the PA’s discretion. But proposals must retain the original structure and architectural characteristics of the building, incorporate uses that do not have an adverse impact on the building’s fabric or character, and must be neighbour-compatible.

As a Grade I scheduled building, the former Raffles discotheque – once run by businessman Mark Grima, son of the late Labour minister Joe Grima – can still be used as a club, local council premises or office uses, educational purposes, or assembly and leisure. “The reuse of the building as a disco will not be permitted given the likely impact on residents.”

News of the lease has irked Nationalist critics like MEP candidate Dione Borg, who notes that former Nationalist administrations attempted to rescind the lease of the historic building to Labour over non-adherence of the conditions.

Originally the site – the Junior Ranks’ Club forming part of the British military installations in Pembroke – was one of three scheduled buildings granted to the Labour Party on a perpetual lease in 1979. The other two buildings were Australia Hall, built by the Red Cross in 1915 and now sold by Labour to a Fino Group subsidiary; and a smaller site situated roughly between the other two and which had served as the Soldiers’ Cookhouse and Dining Room under the British.

The buildings were granted to the PL by the Labour administration of the day for the expropriation of the party’s Freedom Press building in Marsa to make way for the Malta Shipbuilding complex. The building at the time served as the PL’s headquarters. The party also gained a perpetual lease on the Macina building in Senglea, which became the party’s headquarters up until the 1990s, and has now been sold to a hotel group.

Over the years, the Raffles site attracted the interest of prospective investors: Penza Group owner Carmelo Penza in 1994 expressed interest in the development of a commercial and entertainment centre with an underlying car park. In 1996, Wallace Fino was granted a planning permit for the development of a child development centre, but no further progress was made.

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