For discussion
on 24 March 1964
MEMORANDUM FOR EXECUTIVE COUNCIL
KCR (64)1pg-unex B
Copy 19
RENTS CHARGEABLE IN RESPECT OF RENEWAL OF CERTAIN ·
PIER LEASES
A
The purpose of this memorandum is to seek the advice of Honourable Members in respect of certain pier leases (47 in number) which are due to be renewed on 1 January 1965. At Annex A is a list of the piers, together with details of areas and present rents payable.
B
2
It may be of assistance to Honourable Members to know that, prior to 1899, such piers as were in existence were let on various conditions, but in that year it was decided to grant pier leases for a term of 50 years terminating on 31 December 1949, and all leases granted after 1899 were so drawn as to expire on the same date. In the early
The
years after the war consideration was given to the question of the terms of "renewal" of these leases, as a result of which on 13 August 1947 Council approved a general policy (as embodies in the release at Annex B) which envisaged, subject to the satisfaction of certain criteria, the grant of new leases to existing lessees for a period of 15 years with the option to renew for a further period of 15 years "which shall subsequently be renewed for yet another term of 15 years subject to mutual agreement between Government and the lessee". The new leases were to be free of premium and subject (inter alia) to the payment of a rental calculated by reference to a basic maximum of 25 cents a square foot a year. maximum was to be applicable "only to such piers as enjoy to the fullest extent all the advantages of locality, shelter and natural depth of water". (There is little evidence to indicate how the figure of 25 cents was arrived at although there is some indication that it was thought at the time to be on the low side). As envisaged in the 1947 policy statement, new leases were not granted in certain cases e.g. where it was expected that the area occupied by the pier would be required for some development project (e.g. a reclamation). The 47 leases now under consideration represent the balance of those that were granted in respect of which the question of renewal now arises; the actual rents paid vary from 25 cents down to 18 cents (a precise breakdown is 5 at 25 cents, 15 at 23 cents, 11 at 22 cents, 8 at 21 cents, 5 at 20 cents, 1 at 19 cents and 2 at 18 cents).
3
The present leases provide, inter alia, for renewal for a further 15 years "at such re-assessed rent as shall be fairly and impartially fixed by the Governor as the fair and reasonable rental value of the said piers at the expiration of the term" but without premium. The assessment of what might be a "fair and reasonable rental value" of the piers has proved difficult, since they are attached to "parent" lots owned by the companies concerned and used in connection with the general activities of the companies. It might have been possible, for example, for the rateable value to have been used as a guide, but it so happens that, in all but one or two cases, these piers are included in an overall assessment of the companies'
/operations