CITY LEASES

Evening Post, Volume CXIII, Issue 86, 12 April 1927, Page 4

CITY LEASES

ON FAIE RENTALS

TWENTY-ONE YEAR TERMS

BEPLY TO COUNCILLOR M'KEEN

Councillor J. Burns, chairman of the Legislation and Leaseholds Committee of the City Council, while speaking at Wadestown last evening, made a sharp reply to statements made by Councillor R. M'Keen, M.P., who had contended that the city was not getting a fair deal in the matter of its leasehold properties.

Councillor Burns replied that a very fair and reasonable return was at present obtained, and, in answer to Councillor M'Keen's advocacy qf putting leases up to public auction, 'said that, in the first place, the council had no power to do so, and, secondly, would not do so, and thus break legal and moral contracts with the lessees. The rentals received .at the present time, said Councillor Burns, were far from being as Councillor <M'Keen had stated—highly satisfactory, to the council and to the lessees, too. There were* several . main . classes of leases: (a) Straight-out leases of anything from 50 to 60 years, at the end of which period . the building property: reverted to the council; (b) fourteen-year perpetual renewable leases, which in the main had been extended, with statutory authority, from 14 to 21-year periods: (c) the auction leases to which Councillor M'Keen referred; a lease, said Councillor Burns, not at all popular'with lessees; (d) short-dated.terminating leases, usually not extending, over periods of i more than five years. TYPICAL INCREASES. The committee responsible and the council as a whole were quite alive to the property, interests of citizens, and without rack-renting they had been able to secure better returns from city properties than had ever held in the past. That the percentage return had considerably increased was shown plainly by a return of typical leases dealt ■with by the present council. The cases were not chosen because they were: the best, but because they were typical:— .

"Councillor. M'Keen contends that these leases should have been put up for public- ..auction," said Councillor Burns, "instead of their being renewed at small rentals for periods of twentyone years, by which means he (Councillor M'Keen) believed the city would receive twice fes much as was being received at the present time. The answer .to that ,'is that most of. thes.e leases .could not. be put'up..-to'.public 'auction /without■ breaking legal:and moral contracts between the council, and the lesoes. .-...■. REASONS FOB EXTENSION. . "There was, moreover, very good reason, for: the extension ■of the ■ periods fi-ont fourteen, to .-twraty-one' years," said Councillor Burns. "In the first place,.it is recognised that it is difficult to obtain adequate rentals for fourteen year periods, the term being too short. Secondly, it is very difficult to arrange finance for a fourteen, year period, as. the .security is at full. vjalue during tho first year only. Tho rate has boon fixed at 4J per cent, on tho valuation determined by the City Valuer and the Government Valuer, and this, I submit, is a fair rental, and that viow is also expressed by the majority of those qualified to speak on. a;matter of this nature." . ; .

Councillor Burn 3 added that about fifteen of thb leases fell duo during the term of the present council, and in order that the councillors should be satisfied that the best possible rental would be secured, the then City Valuer (the late Mr. James Ames) was instructed to value the properties. In addition the Legislation and Leaseholds Committee took the precaution of asking the Government Valuer to report upon the properties, ."and it was a remarkable fact, that,, though tho properties involved over, a quarter of a .million pounds, there was a difference "of only £3000 or £4000 between the two valuations. That being so, the committee and the council were satisfled that a sound... basis had been rbaehed. - ■-„.■■. . "MOST DAMAGING BTATEMENT." tVhilo short-dated: leases ~ could be put up for public auction with, very satisfactory results, said- Councillor Burns, the longer, leases wore on a different footing altogether, and were lessees of city.property .to gain the impression that these long leases were to be so treated they would regard • thgm in" a very different light altogether, it wak tho long torm which made such leases of value to those.7*who- secured thenr, but Councillor M'Keen's' statement had certainly had the good effect of making it clear .to lessees what would happen to their contracts were representatives of the party to which he belonged to gain a majority of the seats at the council table. ■ His statement was one which . would tend to create- distrust in the minds of. the lessees and reflected upon the honour of the council in the carrying out of the obligations entered upon. : "It is the most damaging statement that has been made.in connection with the city leaseholds," said Councillor -Burn's,, ''but 1 feel that no member of the. commit tee,, outside the Labour members, would be a party to any act of confiscation, which is what the carrying out ofi the policy advocated by Councillor; M' Keen would amount to. ' "A NEW CITY VALUER." "Every day,'? continued Councillor Burns, "we meet in the street new City Engineers, men who can tell the appointed engineer where he is wrong and how. he can put things right, new Town Clorks, who can tell the appointed clerk what a pitiful failure he is in everything" that matters, and now we have a super-City Valuer. >in Councillor M'Keen, who can put the conclusions of both the late City Valuer and the Government Valuer right in a few words. .If it is a fact that Councillor M'Keen's ability in this matter can compare with that of the late Mr. Ames and the Government Valuer, whose advice wo followed so closely, then I regret to say that he has not as a member of the Legislation and Leaseholds Committee up to the present shown any evidence of it. On the occasion of each election members of the Labour Party endeavour, to make capital out of the city leases question, but they have not as yet. shown a spark of originality in the way of making useful suggestions as to how the position could be improved. The City Council has now power to put the long-term leases lip to -public auction, and if it were not for the fact that long leases were obtainable many j>£. the properties would simply be loci-

Ed up; no business concern would want to have anything to do with them. "And now as to the statement that the rentals are too low: the fact is that there are in the centre of the city vacant sections, owned by the city and available at moderate rental, for which the council has been unable to get an offer. Councillor M'Keen says the rentals are too low, but the business man seems to think "that those Centals are too high; at any rate, sections have lain idle for years." -

. . . Previous. . • ta S e ' Bental. Rental. Inc. Panama street 177 1.7 ■ 285 0 0 Cl Panama street 106 15 0.. 356 5 0 'S6 Panama street 97 10 0 332 10 0 240 Lambton quay 468 0 0 13)0 0 0 44 Lambton quay 442 0 0 726 15 0 230 Lambton quay 216 13 4 726 15 0 V3S Larabton quay 275 .«. 8 983 5 0 258 Brandon street 430 10 0 1996 3 9 57 Brandon street 840 ob' Brandon street.l2B 12 6 332 10 0 159 Featherston and Brandon .. 162 0 0 360 0 0 134 Brandon .... 93 16 0 427 0 0 200 BAndon 48 1 0 Ffatlierston . 200 0 0 475 0 0 137 Victoria .... 300. 0 0 .349 0 0 .1G Featherston . 293 2 0 706 11 3 141 Victoria .... 420 0 0 570 0 0 35 Victoria .... Sl2 10 0 415 12 • 6 33 Willcston ..190 0 0 285 0 0 50 Willis strcoi 174 0 0 82 3 0 53 Willis streot 890 0 X» 1439 5 0 Gl - Ffiflt.hnrstr.n _'IRI 'r* n ' A97 in n' Tifl