THE PUBLIC PAY

Evening Post, Volume CXL, Issue 59, 7 September 1945, Page 8

THE PUBLIC PAY

HOTEL FINANCE

WELLINGTON EXAMPLES

"These large sums of money have obviously got to come from somewhere, and that money must come ; from the pockets of the public,' said Mr. J. D. Willis, counsel assisting the Royal Commission on Licensing, yes- . terday afternoon after quoting valua- , tion, rent, goodwill, and premiums : involved in hotel transactions over the last few years in and around Wei- i lington. . ; Three of the hotels he named were > owned by Mrs. Amy Dwan. said Mr. > Willis. , ~ : The first hotel he mentioned, the Albion, was valued at £16,000, £2000 of which was the value of improvements, in 1935 By 1940 the valuation was £17,500, incLuding improvements. The search note had shown that this hotel was leased.in 1938 for three years for £77 10s a week, reducible to £67 10s for prompt payment. Goodwill paid was £3000. In 1941 the rental became £335 16s 8d a month, reducible to £282 10s, and £5000 was paid for goodwill. Spreading the goodwill over tne term of the lease, the effective rental became £5136 13s 4d a year. The New Clarendon Hotel was worth £14.550 under the Government valuation, improvements being assessed at £5550. It was leased in 1935 for three years at £1560 rent a year. In 1938 a further three-year lease was drawn, with rent at £1820, reducible to £1560, a premium of £1500 being paid by the lessee to the owner. In 1941 a further lease was executed at the same terms, making the effective rental £2060. The capital value of the Victoria Hotel, Petone. was £7285, improvements being £4585. In 1934 it was leased for three years at £624 a year, £1200 being paid for goodwill. In 1937 a further lease of three years was executed at the same rental, £2500 being paid for goodwill. In 1940 it was leased again for three years at £1560, reducible to £780 for prompt payment and on condition that liquor was bought from the lessor's nominee. On this occasion £3500 was paid for goodwill. In 1943 a lease for £2736, reducible to £1946 on the same conditions, was executed. The Belle Vue Hotel, shown as cwned by Mrs. Eva Dwan, was valued at £5450. improvements being £3200. In 1932 it was leased for fiye years at £650 a year, goodwill paid being £2955. In 1937 the present owner had granted a lease for five years at £1040 a year, the goodwill payment being £3500. In 1942 a further lease was granted, again for five years, at £2080 a year for the first two years, and thereafter at £1560, reducible to £1040. Premiums paid since 1932 had totalled £10.455. and rentals received were £650 for five years, £1040 for the next five years, £2080 for the next two, and £1040 for the next three. VALUATION AND INCOME. "All that "from a property the capital value of which was £5450,"' said Mr. Willis. Another Lower Hutt hotel, the Railway, owned by Leo Thomas Dwan, was valued at £3200, of which £1800 was improvements. It was leased for three years in 1935 at £702 for the first year and £780 a year for the following two. In 1938 it was leased again for five years at £1170 a year, goodwill paid being £2000. In 1944 a further five-year lease was executed | at £2355 a year. After the first 14 j months of that lease, rent for which term was paid before execution, rental was to be paid monthly to the tune of £196 ss, reducible to £130 16s fid if liquor was purchased from the owner's nominee. In the case of the Caledonian Hotel, Wellington, the yaluation was £6580, improvements being £4655. In February, 1929, the then owner granted a lease of the hotel to Mr. T. B. Dwan for five years from May 1, 1930, at £ 1560 a year, with a premium of £4000. On May 10. 1930, the lessee executed a sub-lease for four years as from May. 1, 1930, at £2600 a year, with a premium of £7500. On January 20, 1934. the executor of the lessor sub-leased to the same lessee for a further year at £1650. a premium of £150 being paid. The lessee therefore agreed under the lease to pay £4000 by way of premium and £7800 for rent, and he was to receive under two successive sub-leases £7650 for premiums and £11,960 for rentals, said Mr. Willis. That is, he was entitled to receive from the sublessee £7810 more than he was bound to cay the lessor. The hotel was leased in 1935 for five years at £1508 a year and in 1943 was sold for £25.000. the Government valuation being £6580. Mr. Willis mentioned that in addition to these charges, the lessees in most cases were required to maintain the improvements.