Minister defends Casino Maltese ground rent amid strong criticism

Home Affairs Minister Tonio Borg yesterday defended the government's decision to renew the emphyteusis of the Casino Maltese in Valletta at a ground rent of Lm3,000 from the current £1,400, pointing out that annual rents of Lm25,000 currently paid by underlying shops to the club committee would now be paid to the government.

But the opposition insisted that the government's return was still far too low. Dr Joe Brincat said a figure close to Lm100,000 would have made more sense, while Dr John Attard Montalto said it was unbelievable that a Lm3 million property was being granted for a ground rent of Lm3,000.

The remarks were made during a debate in parliament on a motion for the transfer of government properties, including the Casino Maltese in Valletta.

Dr Borg said it was true that when the motion was first debated by the House Audit Committee last week, MPs were not told, because he was not present, that the rents currently paid by the shops amounted to Lm25,000, although it had been pointed out that the shops would revert to the government.

Dr Borg said the emphyteusis of the Casino Maltese was due to expire in 2006 but it was being replaced now by a new 50-year contract because the management committee wanted to carry out extensive renovations in the historic building.

Since this motion was retroactive to last July 1, the government would be receiving Lm35,000 in rents from the shops and the ground rent for the period until the current emphyteusis was due to expire, and it would henceforth receive Lm28,000 annually since the rent paid by the shops would be paid to the government, along with the club's ground rent.

The shops' tenants would continue to enjoy the tenancy in terms of their current contract. When those contracts expired, the government had the right to take the shops back, but it was Lands Department policy for shops in Valletta that when contracts were about to expire, new rents were negotiated at market prices. When no agreement was reached, a call for tenders was issued, with tenants being given the right of first refusal.

Dr Borg observed that it had been suggested that the government should take back the Casino Maltese building for use as MPs' offices or for use as a museum of political history. The government, however, felt the Casino Maltese had a social role which should be preserved.

Indeed, that view was backed by parliamentary questions in 2001 by Labour front bencher Evarist Bartolo and remarks by Opposition leader Alfred Sant himself.

Mr Bartolo in his questions had asked the government to consider early renewal of the emphyteusis of the Casino Maltese at a rate which was adequate for the management committee to invest in refurbishment and new facilities.

Dr Sant, after meeting Casino president Manuel Mallia and the management committee over lunch, had in an article in It-Torca spoken on the social and cultural role of the club.

The costs the management committee faced on the upkeep of the building were high, with some Lm15,000 needed for the glass roof of the courtyard, Dr Borg observed.

Dr Borg said the ground rent would rise by five per cent every five years and the emphyteusis would expire without automatic renewal after 50 years.

Dr Joe Brincat (MLP) said the Casino Maltese was an extensive historic building in a prime site in Republic Street, Valletta, right between Malta's two important squares - Palace Square and Republic Square.

Despite the minister's explanation, the opposition remained of the view that the ground rent remained far too low, and should be Lm100,000.

Mr Bartolo in his parliamentary question had called for an "adequate" revision of the ground rent. No figures were quoted. Even if one were to adopt the same rates used for social housing, a much bigger figure than Lm3,000 would be arrived at for such an enormous place.

And if one was to consider the rents charged in Republic Street, one would be making fun of people to say that the ground rent proposed by the government was adequate.

Furthermore, he felt that the government was abusing of the term "social purpose." Everything was social, but there was a great distinction, for example, between the Social Action Movement and the Casino Maltese. The latter was a society but it was not social. He personally viewed the club as being somewhat elitist where friends met friends to read the foreign newspapers. Did they have to hold there meetings there?

Had anyone considered how much it would cost the government to find a similar building for use as offices or to house parliament?

One would not even find a basement at Lm3,000 in Republic Street. Even a warehouse in Marsa and Qormi fetched higher prices.

Dr Brincat welcomed the fact that the motion had been amended from that debated last week to ban discrimination.

Mr David Agius (PN) welcomed the fact that in terms of this motion, the government was transferring the old abattoir at Attard to the Attard Scout Group and Girl Guides.

He said that the premises previously used by the scout group should not be given by the AFM, as planned, but should be transferred to the Attard Athletics Club.

Notary Charles Mangion said he had been one of the Casino's guests for the lunch mentioned by Dr Borg, but that did not mean that one's views were changed by being invited to lunch. He also wanted to declare that he had been made a member of the club, although he did not go there often.

Public properties, he said, were national assets and the government should ensure that the value of such properties was respected and their use was in the public interest.

Ten years ago, the government had handed 90 tomna of land at Fort Chambray in Gozo for Lm10,000. Yet that grant had not yielded any benefits to the people and that prime site was the subject of speculation and controversy between the shareholders.

The opposition was not saying that the concession to the Casino Maltese should not be renewed, but proper consideration of the building's value should be considered. The original emphyteusis was granted in 1906 at £1,400, which was a considerably higher sum in the context of circumstances at the time. The government, as custodian of public property. should have retained those criteria and fixed a ground rent which respected the current value of the property. Rents for social housing were higher, and they were raised as soon as the tenants' income rose.

Dr John Attard Montalto said this case was simply unbelievable. The government was giving away a Lm3m prime site palace for a ground rent of just Lm3,000 for use by a private club which had less activity than a band club.

This was happening when the government constantly complained about a lack of suitable premises for its offices and parliament in Valletta and when its financial situation was getting progressively worse.

Even a ground rent of Lm100,000 would not reflect the cost of the property. A residential house on St Barbara Bastion cost more than Lm500,000, a property in Old Bakery Street had cost Lm1 million and the offices occupied by P&O had cost Lm2 million and needed another Lm1 million for their conversion.

The government could have taken back this historic palace and given the Casino Maltese alternative premises elsewhere, much like Joe Gasan had done in the case of the Union Club in Sliema once its emphyteusis expired. Indeed, the Casino Maltese already had other premises in Sliema.

The opposition was often accused of losing its bearings. But, clearly, the government never had them, Dr Attard Montalto said. Given the serious problems the country was facing, and the government's clear inability to handle them, the time had come for the two parties to work together as a national government.

Dr Attard Montalto said the Casino Maltese was but a small example of how the government was incapable of administering public property. Other examples were how Fort St Elmo had been allowed to deteriorate to a despicable state, how City Gate, built by the Borg Olivier government in a fascist style, had a stench of urine, Freedom Square, Valletta's most prominent square, was a car park and, 60 years after the war, the old Royal Opera site remained in ruins.

Dr Attard Montalto said he still had to be convinced that the Casino Maltese needed to continue to occupy its current site in the national interest.

Concluding, Dr Attard Montalto said that since several members of the government where members of the Casino Maltese, he asked the Speaker to rule whether they could vote, once they had a conflict of interest. Such MPs, he said, should be asked to voluntarily withdraw from the vote in the interests of transparency.

He also asked the Speaker to rule whether speakers in the debate so far should have declared their membership of the club.

The premises used by the Casino Maltese were being granted for free. This, Dr Attard Montalto said, was scandalous.

Dr Jose' Herrera (MLP) said he disagreed with some of the personal views expressed by Dr Joe Brincat. It was important for the country to have clubs such as the Casino Maltese, the Marsa Club and the Union Club, in the same way as one should have band clubs. The MLP was not against such clubs, but the ground rent proposed by the government was too low. He also wanted to point out, however, that the Casino Maltese premises were demolished by enemy action in 1942 and rebuilt by the members at their expense. Hardly anything of the original features survived.

The debate continues today.