THIRD EDITION THE LIQUOR BILL

Evening Post, Volume XCIV, Issue 83, 5 October 1917, Page 8

THIRD EDITION THE LIQUOR BILL

HOTELKEEPERS' EVIDENCE

QUESTION OF REDUCTION OP RENTALS

The evidence'taken before the Statutes Revision. Committee of the Legislative Council on the Liquor Restriction Bill makes interesting reading. In the opening of the proceedings, Mr. M. Myers, representing the National Council, -. said : —"The only observation I should like to make is a short observation with regard to the amendments proposed by Mr. Gray. He proposes to reduce the rental in every case by onethird. Such a course plainly might be, and indeed would be, in very many cases very inequitable. In some cases the loss caused by the restriction of hours might amount to one-third, in some cases it might amount to more than one-third, and in other cases there might be no loss ■at all, or very little loss. 1 Consequently, therefore, it would be quite unfair, so far as the owners are concerned, to say that each and every owner, regardless of circumstances and the loss sustained', must reduce his rent by one-third, or by any fixed proportion." Following these remarks, Mr. A. Gray, K.C., who ■appeared for the : tenant licensees of licensed houses- not being the owners, said, inter alia-, that they had resolved to submit that a fair proportion would be one-third of the- rent payable under their leases, and a refund of onethird of any premium paid for the purchase of the lease, based upon the .theoretical payment per annum of a proportionate paiifc of that payment treated as rent in advance. The later proposal refers to the premium itself. Take the case of a man who has a lease for five yeaTs of a hotel, for which he has paid a premium of, say, £2500, -with, a rental of anything from £1000 to £2000 per annum. We say that he ought to get a refund, or rattier a rebate, not only of a proportionate part of the rent, but also a refund of a proportionate part of the premium paid, together with a proportionalt^ part of the interest which he has .had to become liable for in. order to pay to the landlord that premium. Take the concrete case of a hotel in Wellington, of. which there is a lease for five years, recently acquired at the rental of £1800 per annum. The lessee paid a premium of £2800 to acquire the lease. Having regard to the faots that thft lesseelicensees will now be deprived of sevensixteenths of their hours in which they have been permitted to sell liquor, and that, according to th« evidence 'that will be submitted, to yon, a very large partin some oases the larger part—of their takings are received during the evening hours from 6 p.m. to ]0 p.m., it is considered that they are justified, in asking, not for a reduction of seven-sixteeatns in rent, but for one-third. In addition to that, they think that, as in most cases a premium is paid to the owner of the hcftel, there should be a proportionate reduction of the premium paid. Here is a concrete instance: A hotel in 'Wellington ' has been leased foi five years at a rental of £1800. A -reduction crone-third would make the rent £1200. The lessee has, paid £2800 to acquire the lease. As his takings are going to be reduced very much in consequence of bhis measure, he thinks, and those who are situated in like case also think, that he is entitled to something in the nature of a rebate or refund of portion of what he has paid for th^ lease, in view of the law then existing, by which he was permitted to sell liquor from 6 a.m. till 10 p.m. Giving | evidence, James M'Parland, Hotel_ Cecil, Wellington, said I:—The freehold of a considerable part of the Hotel Cecil is owned by me arid my brother ac trustees in the estate of my late fathei. We employ a staff of forty-eight, and pay in wages the sum of £100 per week. The annual rates amount to £564 6a Bd. There is a mortgage on .the property of £18,000, ■ bearing interest at 6 per cent, pel" annum, so that the Total annual outgoings in rates and interest are £1644. A. tally of the taking* in my hotel was taken, I understand, at the request of the National Efficiency Board, and it. was found that 45 per cent, of the takings were taken between 6 ,g.m. and 10 p.m. The boarding establishment of our hotel is run at a loss, and at the present- pricfe of food and wages I cannot poesibly carry on my present business. With the reduced hours for sale of liquor I am of opinion that it would not be possible for me, after paying other outgoings, to pay the sum of £30 per week which is necessary for payment of internet and rates. This would make no provision for reduction of the principal sum under the mortgage. Unless some compensation is paid to our estate, or the period-of the war i« very short, it will not be possible for us ■to carry on and meet our otJli-' gationa. ' - Matthew Muir, Post Office Hotel, Wellington, said: — ' , > I am the owner of the freehold and also the licensee of the Post Office Hotel, situate in Grey-street, in the city of Wellington. The purchase price paid for the property in Mardh, 1910, was £25,150. The Government capital valuation of the property, which does not take into consideration the value of the license, is £12,500, the difference between the Government capital valuation and the purchase money being £12,650. The amount at present due by me on a mortgage of the freehold to the trustees in the estate of W. H. Levin (deceased) is £11,850. This bears interest at 5£ per cent, per annum. The rates on my property amount to just over £200, making the total outgoings for rates and interest over £850 per annum. At least one-third of the takings of my hotel are taken between the hours of 6 p.m. and 10 p.m., and with the reduced income I will not be able to meet the obligations in the way of rent and interest, on my property. My hotel is' not suited for the doing of a large boarding business. I have accommodation for nineteen people, besides a staff of twelve. During the last four years my books show the following loss in the house department of my hotel':—l9l3-14; £12 10s 7d; 1914-15, £182 Is 4d; 1915-16, £176 7« sd; 1916-17, £275 5s Bd. This is without charging either rent or wages to the boarding department of the hotel. The reduced hours will not enable me to reduce my staff, and unless some compensation is provided for my loss I will be faced with insolvency.' P. J. Griffin, Greshafn Hotel, Wellington, said : I am the owner of the freehold and also the licensee of the Gresham Hotel, Wellington. I purchased the property about two years ago from the Public Trustee for the sum of £24,000. To bring the place up to date as a licensed hotel, I expended a further sum of £6000, "making £30,000 in all. The closing of the bars at 6 o'clock will reduce the market value of my hotel by at least £10,000. To enable me to purchase this property and ■ effect improvements on it- I had to borrow £15,000 from the National Bank. R. Dwyer, Empire Hotel, Wellington, said : I am the owner of the freehold arid also the licensee of the Empire Hotel, Wellington. After the last poll in 1915 I purchased the freehold of my hotel for £59,800. To convert the place into a first-class modern hotel, I spent a further suni of £16.200 on improvements, repairs, alterations, and furniture—making a total cant of £76,000. To complete* the transaction, I incurred

financial obligations to the extent of £55,800. The record takings for the National Efficiency Board show that 40 per cent, of the takings of my hotel are taken between 6 p.m. and 10 p.m. With the reduced hours the_ hotel will not be worth the amount of the mortgages on it, and I will be ruined financially. With the additional three hours in the morning taken off the hotels^ it can safely be said that their takings will be diminished by 10 per cent.