City Gate shop tenants get €1.7m

Tenants of shops in Freedom Square, Valletta who opted for financial compensation rather than accepting alternative pre-mises have received a total of €1.7 million, The Times has learnt.

The Parliamentary Secretary for Land, Jason Azzopardi confirmed that 13 of the 19 shop owners preferred financial compensation. These received between €75,000 and €200,000 each.

The six tenants who agreed to move into the alternative premises offered to them, mainly at the City Gate Shopping Arcade, did not qualify for financial compensation.

The businessmen were forced out to make way for the Renzo Piano City Gate project.

Dr Azzopardi said that, although it was not legally bound to compensate or offer alternative premises, the government still felt it was "desirable" to do so in order to safeguard the livelihood of those employed in the outlets there.

"The government had no legal obligations to compensate or offer alternative premises but we opted not to use the same yardstick used in the private sector. We went that extra mile to show we care and are sensible to their situation and that of their employees. We could have adopted a purely legalistic, detached attitude but preferred the more humane approach," he said.

Some of the shops had been in operation since City Gate was last built in 1964.

Dr Azzopardi explained that it took 10 months of laborious preparations, analysis and negotiations and more than 100 meetings to strike a deal with each shop owner by the April 1 deadline.

The process started at the beginning of June 2009 when the Renzo Piano project took off. Government Property Division officials painstakingly checked every government property in Valletta that was either vacant or leased but not in use. The process alone took four months to complete.

Marathon meetings with the tenants were held and Dr Azzopardi singled out Reginald Fava, representing tenants on behalf of the Chamber of Commerce, Enterprise and Industry, and Vince Farrugia, representing tenants on behalf of the Chamber of Small and Medium Enterprise - GRTU, thanking them for their cooperation.

Asked how the compensation was calculated, Dr Azzopardi said a formula was worked out based on the audited accounts submitted by the individual shop owners.

He refused to divulge the compensation granted to each shop owner on grounds of ethics and confidentiality but when pressed said the compensation ranged between €75,000 and €200,000.

Dr Azzopardi said four of the shop owners who did not opt for compensation accepted to be relocated to the City Gate Arcade, which is expected to be upgraded and embellished, and one shop owner will be moving to Old Theatre Street.

The popular Ġilardu Kiosk, a newsagent that has been there since after World War II, will be relocated to another side of the square and will be incorporated into the new City Gate project.

All shop owners signed a declaration not to use the relocation or closure as a premise to sack any of their employees, Dr Azzopardi said.

Valletta's new-look entrance will do away with the arcades and the shops on one side of Freedom Square. The outlets operating from the ruins of the old opera house have also moved out and either received compensation or moved to a new location in Valletta.

So far, between €60 and €80 million have been set aside for the project, excluding the upgrading of the grubby bus terminus.