Bidders were also allowed to propose residential units but this was not among the main objectives set by the government, according to the tender document seen for first time.
The government did not set a minimum price for a concession on land occupied by the Institute for Tourism Studies when it issued a call for developers, The Sunday Times of Malta can confirm.
The tender document, seen by this newspaper, left it up to the bidders to come up with an offer for a one-time upfront payment and ground rent for the large site in St George’s Bay.
Controversy had erupted back in May when this newspaper reported that government was going to dispose of the ITS site on the cheap as it negotiated with the Seabank Group, the only bidder.
Seabank had denied reports that its offer amounted to €6.5 million, with company CEO Arthur Gauci insisting it was much higher. However, the company never disclosed its offer.
The Paceville master plan’s estimate of the value of land around St George’s Bay suggested a price tag of €8,500 per square metre for seafront properties. This would result in tens of millions for the ITS site, although the final value is likely to be lower since some of the site is not considered sea front and part of it will be granted on a 99-year lease.
The tender document cost €10,000 to pick up and this is the first time its details are being made public after this newspaper saw a copy. The bidding process is being handled by Projects Malta, an agency that falls within the remit of Minister Without Portfolio Konrad Mizzi.
The only condition related to price in the tender was rather vague – it called for the ground rent to be “commensurate and reflective of the market value of the site and the nature and extent of the proposed development”.
An upward revision of the ground rent would occur every five years depending on the inflation rate.
The tender document also left it up to the prospective bidders to make an offer for the upfront payment to the government once development permits were obtained. However, it also left it up to negotiations during the evaluation stage to set a time limit for making this payment.
Mr Gauci had said the tender document did not set a minimum concession fee when interviewed by this newspaper last June.
The tender document confirms this and it also shows the three sites earmarked by the government to be included in the concession.
The ITS building and its grounds is the largest area, at 18,567 square metres. The next big area is the open air public car park in front of ITS measuring 5,536 square metres. According to the tender document, the concession would also include a parcel of land measuring 237 square metres on the seafront, next to the Corinthia Marina hotel.
While the tender document was for the “design, build and operation of an upmarket mixed tourism and leisure project”, it included a list of specific objectives such as the construction of a five-star hotel or higher.
Residential property, which forms a major part of the Seabank project, was not listed among the specific objectives but under a different clause that stated the “site may also include a number of residential units”.
The clause did not stipulate any limit on the residential percentage coverage of the project.
However, it did include an extensive paragraph explaining how prospective buyers of residential apartments could convert the temporary ground rent payable on their unit to a perpetual emphyteusis. Even here, the rate per square metre upon which this conversion will take place was left to the bidder to indicate.
According to the development brief drawn up by Seabank for real estate agents to take bookings on prospective apartments, the residential component of the project is expected to amount to 22 per cent of the developed area.
The hotel and related amenities, including a casino, are expected to cover 23 per cent while the shopping mall another 11 per cent. Parking facilities will amount to 30 per cent of the area with open terraces and technical areas making up the rest.
According to the specific objectives in the tender, the project has to include a five-star hotel or higher, operated under a “world recognised brand of hotels”. Seabank’s project includes a five-star Hard Rock hotel.
The project must also include leisure and entertainment facilities, food and beverage and retail outlets.
Creation of employment opportunities and a new niche tourism market were also listed as key objectives.
The concession shall be for 99 years on temporary emphyteusis.
Mr Gauci had fended off criticism over the size of the residential portion of the project – two high-rise residential towers – insisting that commercial rates for the land in such a prime site would not be viable without residential units.
“If we were to pay commercial rates for the land, a hotel on its own would never be viable… The numbers just don’t add up,”he had told The Sunday Times of Malta.
The government subsequently appointed Deloitte to carry out a valuation of the land, which report does not seem to have been concluded yet.
Negotiations between the government and Seabank are ongoing.
Seabank’s project
The following details are taken from the brief distributed by Seabank to real estate agents. The area is floor space, which means it caters for the number of floors each component will cover and not just the land area occupied by the building.
• Hotel: 60,074 square metres – 23 per cent;
• Shopping mall: 28,141 square metres – 11 per cent;
• Residential units: 55,918 square metres – 22 per cent;
• Parking facilities: 76,872 square metres – 30 per cent;
• Terraces: 29,472 square metres – 30 per cent;
• Other areas: 6,092 square metres – 2.4 per cent.
kurt.sansone@timesofmalta.com