Potential investors are up in arms over what they say is the injustice of an “intentionally misleading” request for proposals advertised for the development of the site housing the Institute for Tourism Studies.
Several key figures in the industry claim the government’s call for development proposals for the prime site at St George’s Bay was designed to favour the Seabank consortium, which was in fact the sole bidder.
They have made their views known to the Prime Minister, highlighting the discrepancy between the advertised request for proposals and the details they know to be contained in the tender document, which carried a price tag of €10,000.
“There is a huge difference between calling for proposals for the development and operation of a hotel and leisure activities, and calling for the development and sale of residential units,” one potential investor said.
The Sunday Times of Malta revealed last week that Seabank was putting up for sale high-end residential apartments in two towers planned on the site through Remax. The company does not yet have the legal title to the land, which still belongs to the public.
Sources close to the Office of the Prime Minister told the newspaper that Silvio Debono, the owner of Seabank, has offered €6.5 million. Seabank later said they had offered more, without giving an amount. Yet, conservative estimates of the value of this prime piece of land leading down to the sea is between €80-€100 million.
Seabank has said negotiations with the government over the price of the public land are ongoing. CEO Arthur Gauci said their offer was the rate paid by, among others, the current owners of the Villa Rosa site.
He sent a document to The Sunday Times of Malta that was presented as the contract of sale for the Villa Rosa site and encouraged this newspaper to publish it.
The Sunday Times of Malta conducted its own investigation into the contracts related to the Villa Rosa area and discovered that what Seabank had passed on were only three sheets of paper of a much more extensive list of contracts, which would have misled readers on the real value of the adjacent land. The document Seabank passed on showed the value at just over €15 million. Yet, the price paid for the Villa Rosa site was in fact close to €35 million, according to registered documents available on the land.
Villa Rosa was also bought from a private entity; it was not public land. Moreover, the price for the initial contract on the land was set in 2007 and the contract signed in 2009 – a period of recession. The value of land then was not comparable to today’s prices, sources from real estate agencies confirmed.
This newspaper’s research also showed that the company recently purchased 195 square metres of land in the same road as the planned Seabank project and paid over €4 million for it. This again reflects the “paltry” offer made by Seabank for 25,000 square metres of land, as described by potential investors.
Entrepreneurs who have invested millions in the construction and tourism sector are not sitting back and accepting this deal. This newspaper is informed they have made their objections clear to the Office of the Prime Minister.
It is for this reason that Seabank is being pressed to increase the offer for the land, sources close to the OPM said.
Apart from losses on the value of the land, the public is forking out another €56 million for the relocation of the ITS campus to Smart City so the land can be freed to accommodate the Seabank project.
Students and lecturers at ITS are also opposing the move. During a meeting with the Malta Union of Teachers last week, there was almost unanimous negative feedback on the move to Smart City among lecturers. Most of them confirmed that students are already complaining that it is too far away from hotels and restaurants where they work as part of their studies.
“While lecturers understand that St. George’s Bay is a prime area for development, they strongly feel that the decision to relocate to Smart City was taken for purely commercial reasons and the education aspect has been totally ignored by Projects Malta, who simply wanted to develop the still-empty Smart City,” one lecturer told this newspaper on condition of anonymity.
Opposition to the terms of the deal has already been voiced by architects, real estate agents, the Malta Developers Association, the Nationalist Party, independent MP Marlene Farrugia and deputy chairman of Alternattiva Demokratika Carmel Cacopardo, among others.
The government has already signed a memorandum of understanding with Seabank for the project.
This newspaper asked Seabank to provide a copy of the agreement and the tender, among other questions sent. The company replied it “was not in a position to entertain [the] questions” because Seabank had involved its lawyer on this newspaper’s reports on the issue.