Brakes on land for mall

2012-07-17 00:00

TWO local businessmen have put the brakes on the planned R500 million expansion of Pietermaritzburg’s Midlands Mall, in what appears to be a David and Goliath battle.

Sunny Gayadin and Prakash Maistry have gone to the courts claiming that the Msunduzi Municipality sold the land adjacent to the mall to Liberty Group Properties for half what they had offered, while also ignoring their official objection.

Gayadin and Maistry’s Epilite 123 CC yesterday filed papers in the Pietermaritzburg high court, asking the court to review and set aside the sale.

Gayadin and Maistry allege in court papers that the price of R7,5 million for which the property was sold to Liberty Group is “well below market value”, and said they had offered to pay double that amount for the plot.

Gayadin alleges in an affidavit that the process followed by the Msunduzi Municipality in dealing with the sale did not comply with legal principles and was therefore illegal. Among the complaints raised in the papers are that the municipality allegedly signed the sale agreement without first advertising its intention to sell the land.

Epilite 123 CC had also lodged an objection to the sale before the closing date for objections, and also offered to pay twice the amount that Liberty Group had offered.

In statements issued to The Witness by Gayadin and Maistry, the businessmen said they have the backing of a consortium consisting of “several professionals, heavyweight businessmen and property tycoons” who are local citizens and ratepayers.

“Our investment company has the capacity to develop … an ultra modern lifestyle mall which would cost in the region of R500 million and be able to accommodate national tenants at much lower rental rates compared to other malls,” said Maistry.

They had planned to build a three-level mall with underground parking which, based on their calculations, would be able to offer lower rentals than those at the existing mall. “Substantial national tenants” had confirmed their intention to enter into leases. Gayadin said all ratepayers should be given equal opportunity to tender for commercial properties, “but instead selected individuals are granted these opportunities, decided by certain municipal managers and certain government officials”.

Gayadin said the “deal” in this case was no different to the sale of Durban’s Natal Command site by eThekwini Municipality to businessman Anant Singh’s Rinaldo Investments, which is currently the subject of a Constitutional Court challenge by Gayadin’s Giant Concerts CC. “The one glaring issue quoted in our court papers [as] no different to that of the Command site is that the advert in the media calling for objections was placed in the media well after the sale was concluded,” he said.

Plans to expand Liberty Midlands Mall by the Liberty Group Properties were previously delayed when tenants of the Sanctuary Road housing scheme blocked Msunduzi’s plans to sell the land.

At the end of May 2011, Judge Malcolm Wallis granted an order authorising Msunduzi Municipality to proceed with the evictions of the last 14 tenants of the housing scheme, paving the way for the planned extensions to go ahead.

In court papers at that time, Msunduzi’s manager of valuations and land surveys, Jacobus Zwart, said Liberty Group Properties had invested R549,4 million in Pietermaritzburg, which had had significant impact on the growth and development of the city.

The planned “phase three” expansion of the mall was to include offices and a gymnasium, and was said at that time to be worth R500 million.

No date has been set down for the court application hearing yet.


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