The scandal surrounding a Valletta property continues to deepen as it emerges that the public land the government gave to Mark Gaffarena was exceedingly undervalued, according to an exercise carried out by Times of Malta.
Last Sunday, this newspaper revealed how the government had bought half the ownership of a property in Old Mint Street for €1.65 million. It paid Mr Gaffarena, who has multiple business interests, through different parcels of land and €516,390 in cash.
This newspaper commissioned independent architects to assess the value of the public land given to Mr Gaffarena – they concluded the parcels of land were worth at least double .
Mr Gaffarena made a profit of €685,000 in less than two months
Several questions have since been raised about the timing of the expropriation and the fact that the government dealt only with Mr Gaffarena.
The ownership of the 445-square-metre property was split into four quarters, each owned by different parties. The government has admitted it never entered into negotiations with any of the other owners.
Instead, Mr Gaffarena had the time to buy the second part and made a profit of €685,000 in less than two months (refer to timeline).
Land in Ta’ Kandja, Siġġiewi: 5,992sqm
Government architects’ value: €165,800.
Independent architects’ value: €685,000.
Discrepancy: €519,200.
The 5,992 square metre site was previously a soft stone quarry in an outside development zone.
The government’s architects considered the value of the land as an agricultural site, which brings its price down considerably.
Yet the land includes three substantial buildings that can be developed into three farmhouses.
New Mepa policies allow existing buildings in ODZ to be converted to dwellings.
The value given by the independent architects is based on the assumption the quarry has no further mineral to exploit – if there is, the value would increase further.
Timeline
December 18, 2007: Mark Gaffarena buys a quarter of the Valletta property for €23,294.
July 28, 2014: Mr Gaffarena offers to sell the government his share in the property.
August 15, 2014: Owners of another quarter write to the government saying use of the property by the Building Industry Consultative Council (BICC) is illegal and threatens eviction. Letter is addressed to BICC chairman and Labour MP Charles Buhagiar – who is an architect for Mr Gaffarena.
October 2014: Mr Gaffarena signs a promise of sale agreement with owners for another quarter of the property.
January 22, 2015: President’s declaration of expropriation of one quarter of the property – the one bought by Mr Gaffarena in 2007 for €23,294.
January 28, 2015: Government pays Mr Gaffarena €822,500 in land and cash.
February 13, 2015: Mr Gaffarena offers to sell the government another quarter of the Valletta property. At this point that quarter is still on a promise of sale agreement.
February 26, 2015: Mr Gaffarena buys the part that was on a promise of sale agreement for €139,762.
April 8, 2015: President’s declaration of expropriation of another quarter of the property.
April 10, 2015: Government compensates Mr Gaffarena with €822,500 in land and cash (Mark Gaffarena makes a profit of nearly €685,000 in less than two months).
Land in Żebbuġ 26,223 sqm
Government architects’ value: €375,000.
Independent architects’ value: €815,000.
Discrepancy: €440,000.
This vast 26,223 square metre area of land was given the lowest value possible, considered for use only as agricultural land. Mr Gaffarena has a track record of planning infringements on land designated for agriculture on which he built commercial establishments that continue to operate, despite enforcement notices from the planning authority (see Qormi).
Two plots in White Rocks
Land measuring 3,735 square metres:
Government architects’ value: €260,000.
Independent architects’ value: €500,000.
Discrepancy: €240,000.
The land is in front of the sea. Although the area is in an outside development zone, the land has an existing building with a footprint of 240 square metres. This building can easily be converted into a residence with surrounding gardens enjoying sea views. New Mepa policies allow existing dwellings in ODZ to be converted to dwellings.
Land measuring 1,663 square metres:
Government architects’ value: €70,000.
Independent architects’ value: €150,000.
Discrepancy: €80,000.
This parcel of land is adjacent to the land above – the independent valuation is based on the fact that it can be annexed to the other. Moreover, the land given to Mr Gaffarena at White Rocks is adjacent to a property he already owns and therefore increases its value (what architects refer to as merger value).
Manuel Dimech St, Sliema
Government architects’ value: €65,000.
Independent architects’ value: €200,000.
Discrepancy: €135,000.
The value by government architects was based on the fact that the property is not freehold. Yet, that is only valid for one more year. Now that Mr Gaffarena has acquired this property it will be worth more than double the price next year.
Good governance requires the government property division to retain property until it can be issued for sale at a higher value.
In 2007, Mr Gaffarena – who was not yet the owner – had filed a development application (PA 2034/07) to demolish the existing building to construct apartments with underlying garages. Mepa refused the permit in 2012.
Land in Tal-Ħandaq, Qormi
Government architects’ value: €192,810.
Independent architects’ value: €410,000.
Discrepancy: €217,190.
Even if the 9,980 square metres site had to be valued only as an agricultural field, the land has been undervalued. A development application for the site was filed by Mr Gaffarena in 2005. It was later withdrawn but development still occurred.
In fact, the site is being used as a club for entertainment purposes without a planning authority permit. An enforcement notice was served on Mr Gaffarena in 2012.
The architect listed on Mepa documents is Building Industry Consultative Council chairman and Labour MP Charles Buhagiar (whose offices are based at the same Valletta property which the government bought from Mr Gaffarena).