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Friday Oct 31, 2014

Initial payment go-ahead for Sea Point's Tramway Road land

After almost two decades, several failed property deals, internal squabbles and countless empty promises, 34 claimants from Tramway Road in Sea Point are set to get an initial payment of R750 000 each from the sale of the prime land they once called home.

The site where The Orchards development was supposed to be built. Claimants are to receive R750 000 each.

But the City of Cape Town's haste to push forward the payment, despite resistance to the sale of the land by several beneficiaries, has been slammed by opposition parties.

Spear Trust bought the Sea Point West land earlier this year for R51 million.

Applications have already been submitted to the council for development of the site.

The net profit from the transaction is being held by ENSAfrica as stipulated in the city's agreement with Tramway Road Trust.

This week, the city approved an application from ENSAfrica to release an interim R25.5m to the Tramway Road Trust for distribution to each of the 34 beneficiaries.

The request was included as a late item on Wednesday's council meeting's agenda, and was pushed through by the Speaker despite concerns from opposition parties that councillors had not been given enough time to consider the report.

Ganief Hendricks, of the Al-Jamah party, said the proposal to pay beneficiaries from the sale of the land was a "blot on all Capetonians" and that the trustees who agreed to sell should hang their heads in shame.

The ANC walked out of the council chamber when it became clear that the DA-led council would push on with the recommendation, despite calls for the matter to be held back until the December meeting.

Xolani Sotashe, of the ANC, said it appeared as if the DA would benefit from the matter being resolved quickly. The party has accused the DA of having a part in stealing the beneficiaries' land.

The Freedom Front Plus, African Christian Democratic Party and Cope withdrew from discussions. The PAC and Al-Jamah voted against the recommendation.

But Ian Neilson, mayoral committee member for finance, said: "It is now time for the matter to conclude." He said the item was put on the agenda at the last minute as the city first needed to investigate the matter and the dispute.

In his letter of request to the city, Leonard Lopes of the Tramway Road Trust said it would take some time for all the affairs of the trust to be finalised.

"You will no doubt appreciate that most of the beneficiaries are elderly and living under serious financial strain and struggling to keep up with basic day-to-day expenses." The initial payment would provide "financial relief ", he argued.

The Tramway Community Trust was formed in 2001 to submit a land claim for families that were removed from Sea Point West when the area was proclaimed for whites only under the Group Areas Act in 1950. A settlement agreement was reached with the Regional Land Claims Commission and the City of Cape Town, and Tramway Park in Sea Point West was handed over to the Trust at no cost.

One of the conditions of the agreement was that the land would return to the council if it was not used for a development that would benefit the beneficiaries.

Numerous plans to develop the land, including a retirement village and upmarket, luxury apartment development called The Orchard, were scuppered by infighting among the trustees and allegations of financial irregularity.

Several trustees subsequently broke away from the rest of the group, and demanded to see financial statements and records of meetings where decisions were taken.

It was alleged that the decision to turn to Investec for a loan was done unilaterally, and without a mandate from all those affected.

The property deal fell flat and the trust, unable to repay Investec the R14m it had borrowed, asked the city to authorise the sale of the land to settle its debts.

Neilson said the city agreed but put steps in place that would protect the beneficiaries from any malpractice.

"There was a potential for parties to make an unfair deal," he said during a council meeting this week.

Neilson said the proceeds of the land sale were used to settle outstanding debts of R4.6m for architectural fees and R1.9mfor attorneys' costs.

Meanwhile eight claimants, referred to in correspondence from ENSAfrica as the "minority claimants", sought an urgent court interdict to stop a special meeting of the trust from going ahead. They contended that there was insufficient notice of the meeting, at which the matter of the interim payment would be discussed.

But the judge set aside the application and the trust's special meeting went ahead without the minority group. It was unanimously agreed that an interim payment would be made and that all beneficiaries, including the minority trustees, would each get R750 000.

Cape Argus


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