Plans by Fortina Hotel owners to turn a large prime area on the Sliema front into a mixed-development project including offices and apartments will be opposed by the PN Opposition.
Nationalist Party MPs Beppe Fenech Adamni and Ryan Callus said on Wednesday that the Opposition does not agree with the government’s valuation of the property, which was based on a small portion of the land and not on the whole multi-million project.
Speaking during a session of parliament’s National Audit Office Accounts committee, the MPs also said the Opposition does not agree with conditions the government had reached with the Zammit Tabona family, which owns the Sliema site.
The site was originally sold on the condition that it would only be used for tourism purposes, but the government has struck a deal allowing the owners to convert a portion of it into offices, apartments and shops.
In exchange, owners will pay €1 million up front and €7.1 million after 10 years interest-free, when the project is completed.
A total of 85 per cent of the buildable area is already taken up by hotel facilities, the Fortina group said.
PN MP Beppe Fenech Adami accused the government of “acting as a bank for private businessmen, using taxpayers’ money".
The group has said that the €8.1 million works out to €6,480 per square metre, a figure it believes to be far in excess of market value given that it already owns the land in question.
With the parliamentary committee failing to agree on the deal, the government will now take the resolution to parliament’s plenary to debate and vote on the motion.
The developers are expected to issue a special hypothec on a number of still-to-be-constructed apartments on the Sliema front to act as a guarantee for the multimillion-euro project.
According to the draft deed, each time the Zammit Tabonas would want to sell or transfer one of the luxury apartments, they will need the permission of the Lands Authority and have to pay part of their due balance of the remaining €7.1 million.
Leading estate agents told Times of Malta that, at current market prices, a 200-square-metre apartment in Tigné is currently fetching over €1.5 million. The owners of the Fortina Hotel had acquired some 4,000 square metres of public land, through three different contracts signed in the 1990s and early 2000s for €1.4 million.
The public land was transferred to the Zammit Tabonas at a ‘low’ price since it was only to be used as a hotel extension and exclusively for tourism purposes.
However, since 2017, the Fortina owners had been seeking to remove the government restrictions on their land so that while keeping a hotel, they could also build hundreds of square metres of offices, residential apartments and retail outlets for speculation.
“Lifting of clauses concerned only 1,250 square metres of a landlocked plot”- Fortina Group
Following negotiations, the government agreed to lift all its rights for €8.1 million, giving the Zammit Tabonas the right to develop their land according to new permits issued in 2018. The change of use on the former public land needs the approval of a specific resolution by Parliament.
A db Group precedent?
Times of Malta is informed that the Fortina owners initially refused to pay the €8.1 million, as calculated by government architects, arguing that they wanted a similar deal to the one conceded by the government to the db Group over the ITS site.
It is understood that following further talks, the government ceded to the developers’ requests.
Asked to state whether they had conducted their own separate valuation of the land, Fortina CEO Edward Zammit Tabona refused to reply.
However, in a statement issued on Tuesday, a Fortina spokesman admitted differences with the government over the negotiated price.
“Although Fortina considered this premium to be far in excess of market value, especially considering similar agreements that have been approved by Parliament in the past, the group decided to meet this request.
“The premium upon which we agreed works out at €6,480 per square metre of buildable area, which is an enormous sum of money especially when one considers that we already have full ownership of the land in question,” the spokesman said.
Fortina added that the lifting of the restrictive clauses concerned only 1,250 square metres “of a landlocked plot”.