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IOLProperty - South African Property For Sale
Friday Nov 30, 2012

Green light for Natal Command site property development

The Constitutional Court has given the green light to the city's controversial Natal Command site agreement with movie maker Anant Singh.

The prime 21 hectare Natal Command site on the Durban beachfront.

This means the city will have to go ahead with its "sweet" deal with Singh and let him buy the land - valued commercially today at about R400 million - at a steal for R15m.

"The city has been short-changed and ratepayers have lost out," DA councillor Dean Macpherson insisted yesterday.

But other reaction was mainly positive because it means the 21ha prime beachfront site, which has stood barren for nine years, can now be developed.

Singh was adamant that although put together a decade ago, his film studio plan was still viable.

"The city has always supported the project and we absolutely believe it is viable. We had discussions with the city manager in the past few months regarding the way forward and we will now have to look at costs and the whole development in a more current form.

"I have already reached out to the city manager. I called him this morning and I hope to speak to him tonight or tomorrow," an ecstatic Singh told The Mercury yesterday.

He said he could not comment on time frames for the development.

"It's too early to speculate on time frames... we have waited nine years and I don't want to comment on that."

The matter has been tied up in litigation because businessman Sunny Gayadin, who never disclosed his plans for the site, cried foul saying it was not "kosher" and he was willing to pay the city R250m for the site.

Earlier the Pietermaritzburg High Court agreed with Gayadin, Judge Jerome Mnguni ruling that the sale process was "contaminated" and ordered the city to reverse it.

The Supreme Court of Appeal, however, ruled that Gayadin had no legal standing to bring the application - a legal point confirmed by the Constitutional Court yesterday.

The Concourt went further and said it had been unable to find fraud or gross irregularity in the deal, adding that Gayadin's company, Giant Concerts, had been "toying with the process".

Gayadin, who suggested there was irregularity in the judgment, said ratepayers knew there was "something flawed with the deal" which warranted an inquiry.

Macpherson said: "There are a lot of unanswered questions about the process; there needs to be more transparency in the way that the city does transactions with private business."

The city still defends the project and Speaker Logie Naidoo explained yesterday that, unlike in Cape Town, where the province had invested R100m, the city had discounted the land as an incentive to draw private development.

"We did not want it to be like uShaka and Moses Mabhida. We did not want ratepayers' money to be used."

Naidoo added that something iconic was needed for the site.

"I agree with what city manager S'bu Sithole has said previously: we need a mega development that will complement Suncoast Casino, like an iconic theme park and film studio similar to what we see in Hollywood."

Commercial property broker Herman Chalupsky said if the property was zoned strictly as commercial land, it would be worth between R1 500 and R2 000 per m2, but it could not be judged on that.

"On the one hand, the city could put a high price on the land and sell it to build say, a massive Makro. Or you put a low price on the land and build an upmarket facility which will attract people," he said.

Chalupsky said the land portion of any deal was only 20 percent and Singh would now have to put his money where his mouth is, "which is a risk considering the other struggling developments such as the restaurants on the promenade".

"He is taking the risk. Not the council. I think any deal is a good deal with the council because it means something is getting done," he added.

Durban Chamber of Commerce CEO Andrew Layman said the chamber would be overjoyed if the site was used to draw tourists.

"That land has been left vacant for a long time so any movement that is constructive and productive would be welcomed."

He would not comment on the R15m deal but said incentives were used to draw private investors.

"Any city across the world offers incentives to draw investments and they usually get much more money in return."

Sithole could not be reached for comment.

The Mercury

 
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