Developers are eagerly awaiting a valuation of the land where the Institute of Tourism Studies is located, as it could set the benchmark for other sites in St George’s Bay where major development projects are planned.

The independent valuation is being carried out by audit firm Deloitte, which was commissioned by the government as it negotiates a deal to hand over the public land to a private company.

Industry sources who spoke to The Sunday Times of Malta on condition of anonymity said the valuation would likely set the benchmark for other pieces of land in the area where major development is proposed.

The government is in negotiations with the Seabank Group, which was the only company to submit a bid after a tender was issued for redevelopment of the ITS site into a mixed-use complex.

The group wants to build two residential towers, a Hard Rock hotel, offices and a commercial and retail complex.

The government had announced it was commissioning an independent valuation after controversy erupted over strong rumours that put Seabank’s offer at €6.5 million. The company said it was offering much more but did not disclose the amount.

But developers were caught by surprise when the Paceville master plan released last month included the price of €8,500 per square metre for seafront properties in St George’s Bay. The price tag referred to the proposed expropriation of part of the Corinthia Marina hotel and the garden that forms part of the nearby ITS site for the creation of a public open square.

The government has so far failed to clarify whether the price suggested by the master plan is being used as a benchmark in the ITS sale negotiations.

“It is incomprehensible how the master plan quoted a price, which is said to have come from the government, when the independent valuation sought by the government of the ITS site has not yet been concluded,” one source within the industry said.

It is incomprehensible how the master plan quoted a price, which is said to have come from the government, when the independent valuation sought by the government of the ITS site has not yet been concluded

This newspaper last Sunday asked whether the government would value the whole ITS site at €212 million – €8,500 multiplied by 25,000 square metres. No replies were forthcoming two weeks after the questions were sent to the Office of the Prime Minister.

However, another source said the site’s valuation had to factor in different variables that could contribute to a lower figure.

“Not all of the ITS site could be considered seafront and therefore different zones would have to be valued at different prices. Furthermore, while the land area covered by the residential towers could be an outright sale at the market value, the rest of the site is likely to be leased for 99 years, which would carry a lower price tag.”

The Deloitte report is expected to enter into these complexities, which is why developers have been waiting eagerly to see at what price the government is going to dispose of public land in a prime area.

Of particular interest would be the impact of the ITS valuation on the Corinthia site and, further afield, the White Rocks site.

The Corinthia Group’s subsidiary, International Hotel Investments, plans to redevelop the land at the mouth of St George’s Bay, which houses the San Ġorġ, Marina and Radisson hotels, into a six-star residential and hotel complex.

The land occupied by Corinthia had originally been granted to the private sector, by parliamentary resolution, for the construction of hotels. With IHI intending to build high-end residential apartments, the terms of the original concession would have to be changed through another parliamentary resolution.

Industry sources have maintained that any change to the original deed should be accompanied by a premium, given that Corinthia intends to build residential units on the 77,000 square metre site.

However, back in June, when questioned by this newspaper, the government failed to say whether a premium would be charged for a change of use of the Corinthia site.

The other project which could be impacted by the Deloitte valuation is the White Rocks tender. Earlier this month, the Economy Ministry confirmed that White Rocks Development Company, a consortium made up of a number of Maltese and foreign companies, was the preferred bidder.

Negotiations are still under way over the concession of the seaside site that sprawls across 450,000 square metres. According to the request for proposals, the development must cater for an “upmarket tourism” project that includes an “upmarket hotel”. The project is also expected to include a residential component.

So far, The Malta Independent has quoted a price tag of €22 million offered by the preferred bidder for the land concession, but Economy Minister Chris Cardona insisted the amount was much higher.

kurt.sansone@timesofmalta.com

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