Malta Development Association (MDA) head Sandro Chetcuti will not comment further on the Corinthia situation until the government’s next steps are made known.
The Corinthia project has raised many eyebrows, and many sections of society, including the Opposition and the Malta Developers Association, have publicly stated their concern about the project and the proposed land deal.
The Malta Developers Association had last December spoken up about the land valuation in the deal, highlighting their disagreement with the estimated cost. This newsroom heard that the MDA was under pressure to take further action by businessman, and Chetcuti said that there is pressure.
“At this stage, in the name of the MDA, I have spoken enough. I believe my message got across. Government is discussing with us to see what our concerns as the association are, and it would not be prudent if I were to continue speaking about this subject before seeing what the government’s outcome is.”
In a statement last December, the Malta Developers Association said that it “completely disagrees” with the estimated cost of the land in the St George’s Bay area on separate sites being developed by the db Group and the Corinthia Group, warning that it considers the values being mentioned are “far below the market prices prevalent when Deloitte carried out their valuation exercise.”
The MDA, in its statement highlighted that, “When government sells public land to be used for residential purposes at below current market prices, it distorts the property market and abandons the concept of a level playing field for all the players in this market.” The main bone of contention for the MDA was that “government is calculating the value of public land to be used for high-quality residential purposes [as is being proposed by the Corinthia Group] by basing itself on the benchmark already indicated by Deloitte in the case of a development in the same area of St George’s Bay [that of the db Group’s ITS site development].”
However, Chairman of the IHI Group Alfred Pisani had argued in a statement of his own that Corinthia’s payments to the government of €52 million for land in Pembroke to be turned into a six-star luxury complex are an ‘equitable and fair balance’.
The Corinthia chain, which is owned by International Hotel Investments (IHI), will be given similar concessions on the price of land as those given to the DB Group for the development of the City Centre project in Pembroke. On the basis of Deloitte’s calculations, Corinthia will pay a compensation of €51.4 million for the waiver of the restriction on mixed-used development, and a €17 million one-time premium.
The full master plan of the Corinthia development in St George’s Bay is not yet known. However, the first phase of the development would, if approved, include not only the redevelopment of the Corinthia St George’s Bay hotel but also two “luxury serviced residential blocks, the highest proposed to be 15 floors on land located between the current Corinthia and the Radisson Hotel”.
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