G.S. 84
7
(a)
(b)
RESTRICTED
- 3
XCR(79)229
whereas Government had understood and memorandum XCR (78)35 had represented that the recreational facilities would be open to the general public, albeit on a paying basis, the Company now sees this as being impracticable; and
the Company does not think that the scheme will be profitable, and is unwilling to pay a high premium.
The Company believes that if the recreational facilities were made available to the general public, they would become over- crowded and would attract the kind of customer who would be incompatible with its own tenants in the adjoining developments. It accordingly proposes to run a kind of recreation club, the membership of which would be restricted to those who live or work in the flats and offices in the Company's adjoining developments. It argues that some 40, 000 persons will be living and work- ing in its nearby developments representing a significant proportion of the local population, which would otherwise have to rely entirely on recreational facilities provided at public expense. This proposal is consistent with the view expressed in this Council in its earlier discussions that the develop- ment should be seen in relation to its effect on the adjoining development. Furthermore, the provision of these amenities is not without general benefit as the Company has indicated that it would be prepared to permit the use of formal sporting facilities on the pier by the Recreation and Sport Service from Monday to Friday between 7:30 a.m. and 10.00 a.m. at a purely nominal fee of $1 p. a. (subject to review after 3 years). The management of the facilities would, however, remain under the Company's control.
Regrant Premium
8
Without local precedent it has been extremely difficult to ascribe a land value to the development proposed. In the absence of any means of precisely estimating the value this advantage, consideration has been given to adopting the standard pier lease formula. The approved policy for the grant of pier leases is that the term should be the same as the parent lot, and the premium should be equal to 75% of the unformed value of the seabed. The adjacent area (Kowloon Marine Lot No 11) is in commercial/residential status and on this basis the premium for Pier No 6 would be $48, 3 million for a lease-term of 21 years.
9
This basis of assessment is not, strictly speaking, directly related to the principle emphasised by Unofficial Members in this Council, as it assumes that the Company's profits from the development of the pier would be the same as if the pier were to be developed with conventional commercial premises. It would nevertheless produce a substantial premium if the Company was willing to pay it.
RESTRICTED