Councils protest €500,000 reduction in planning gain paid by developer

13 councils in Central Malta warn that environmental projects in their localities will be deprived of necessary funds if the PA does not act fast to safeguard planning gain mechanism after Environment and Planning Review Tribunal slashed rate established in 2017 by 400%

The councils were reacting to a decision to drastically slash a planning gain for a St George's Bay development
The councils were reacting to a decision to drastically slash a planning gain for a St George's Bay development

A total of 13 councils hailing from central Malta are calling on the Planning Authority to ensure that the rate obliging big developers to pay a planning gain of €25 per square meter of commercial development is  “protected and respected” and eventually enshrined in the planning act.

The Central Regional Council was reacting to a decision by the Environment and Planning Review Tribunal to slash a plannning gain of €623,325 for a St George's Bay development to just €116,187 following an appeal by developer Anton Camilleri.

But in its decision the EPRT reverted back to a rate of €4.66 per square metre which applied to projects approved before August 2017.

In his appeal Camilleri argued that the imposition of the new planning gain created a situation of “inequity” between projects approved a few months before his project.

Read also: St George’s Bay developer to pay €500,000 less to environment fund

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 councils 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”.

They also warned that the decision will “adversely effect the Councils and residents that they represent”, as it will deprive them of funds which are financed by planning gains.

Michael Fenech Adami, the President of the regional council called for common sense to prevail to ensure that the quality of lives of citizens is safeguarded.

The planning gain imposed on Camilleri’s project was based on a formula multiplying each square metre earmarked for residential and commercial development (24,933 sq.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 Center project in St George’s Bay, the permit for which has since been revoked.

But in its decision the EPRT reverted back to a rate of €4.66 per square metre which applied to projects approved before August 2017.

The Central Regional Council is composed of the localities of Attard, Balzan, Birkirkara, Gżira, Iklin, Lija, Msida, Pieta', San Ġwann, Santa Venera, Sliema, St Julian's and Ta' Xbiex.

More in National