November 19, 2001
THE Johannesburg City Council has approved the sale of the Johannesburg City Hall to the Gauteng Provincial Legislature, which already occupies the building, for R20-million.
Included in the R20-million price tag is the Harry Hofmeyer Parking Garage and the Dr Beyers Naude Square between the City Hall and the Public Library.
Gauteng's provincial administration, which owns or rents a number of buildings in the inner city, will invest around R60-million to improve the City Hall. It is felt that this investment will encourage other investments in the city.
The Council will still be able to use the City Hall and must approve any proposed improvements or development projects. The Council has a pre-emptive right to purchase the building back at its sale price and value of improvements, should the Legislature wish to sell.
Johannesburg has earned R26-million from the sale of City Council properties
over the year June 2001 to July 2002.
"This is from the sale of 50 stands of land," says Leila McKenna, executive
director of Propcom (Pty) Ltd (JPC), Johannesburg's corporatised property
development company formed under the iGoli 2002 plan. "A further
R8,8-million is being earned from leasing buildings."
The City of Johannesburg has some 30 000 properties, approximately 20 000 servitudes and a further 100 properties of significant revenue income.
Various parcels of land that have been sold stretch across the greater Johannesburg area: from Langlaagte to the south of the city (R282 000), to Doornfontein east of the city (R1 350 000), to several plots in Sandown in the north (R19 500 000).
Democratic Alliance (DA) council member Victor Penning objected to the City Hall sale at the council meeting last Thursday, saying: "It is a sad day when Johannesburg reaches the stage of selling the City Hall - the inability to afford the maintenance of the building indicates poor management."
Mike Moriarty, leader of the DA in the council, feels the City Council could have done better on the price: "The Council has charged too little for a historic building, although it is probably the best price given the amount of decay the building has suffered, which has been allowed to happen and is the responsibility of the Council."
Dikeledi Ntingane, an ANC council member, agreed that some of the problem was due to poor management. "But considering all the facts, at least the building is not going to a private concern."
Moriarty contends that the Council has lost out on rent of R94 000 a month from the Parking Garage as a result of an administration problem. Ntingane indicated that this matter would be addressed in another report.
The city's property management services were corporatised in mid-2000 as part of the IGoli 2002 plan, which was devised as a strategy to bring Johannesburg back from the brink of collapse in 1997. Johannesburg Propcom (Pty) Ltd (JPC) was formed, with the specific aim of managing and developing the properties of the city.
Propcom aims to maximise the long-term income and investment on relevant properties, while on the other hand disposing of surplus land and completing a land register for the city. The land register records a description of the property, as well as the size of the property and who owns the property.
"So far 7 000-8 000 properties have been processed for the land register,"
says Neil Gopal, senior manager: marketing and new business, of Intersite
Property Management Services, the company that manages Propcom.
Intersite Property Management Services will be actively involved in transferring skills to Propcom over a period of three and a half years.
