LOCAL BODIES' LEASES.

Otago Witness, Issue 3006, 25 October 1911, Page 9

LOCAL BODIES' LEASES.

DISSATISFIED LESSEES. • PROTEST AT WELLINGTON. WELLINGTON, October . 17. A meeting of 'City Corporation and the Wellington Harbour Board lessees was held to-day to consider their position under the existing system of lease. There was a large attendance, and the meeting was presided over by Mr H. C. Tewsley. The Chairman explained that revaluations had recently been made by the City Council of portions of their leasehold sections, with results disastrous to the tenants. The leasehold should be one of the best and easiest forms of tenure, especially in Wellington, where such a large amount of land had been reclaimed. People had taken up sections at a time when they had, practically speaking, no value, and they. had created the value. Now they found themselves in such . a position that at the expiry of each 14 years' period they did not know whether it would be possible for them to remain in possession of their . properties. It was felt that if the present method of assessing values from time to time was continued, the result would be confiscation for all those who had erected buildings on leasehold property. They should make representations to the City Council, or, failing that, to Parliament, to have some alteration effected, whereby a more equitable basis.of rental couid be arrived at. He also proposed the formation of a Leaseholders' Association to watch from time to time the state of the leases. Then, when revaluation was due, the whole body could take action, instead of individuals.

Mr L. 0. H. Tripp, of the firm of Chapman, Skerrett, Wylie, and Tripp, said his firm had one of the leases. The leases provided that at the expiration of the term for which they were granted, three valuers should be appointed. They had to deoide only on the ground rent, without regard to the buildings. Several arbitrations had'lately taken place, and the argument by the City Council was that the first value of land must be ascertained, and then the basis of 5 per cent, was taken on that. That method was unfair, and that meant that if the tenant could not afford to pay the increased rent he must walk out and make a present of his building to the City Council. He quoted as an example Messrs Bannatyne and Co.'s building, which had been erected for about 20 years. The lease came up for renewal, and the corporation had said they would bring six witnesses to prove that the corner on which the building was erected was now a shop corner, and was worth £3OO a foot, on which the corporation should receive 5 per cent. Mr F. Townsend mentioned leases in Haivis street. The original sale was at £3O a foot, but it had gone up to £3OO, and the tenants had been paying rates on the latter value. Mr A. H. M ile s said the lessees were groaning under the burden of increased values. He was of opinion that the system now in vogue, of taking exorbitant ground values to begin with, and then taking the high rate of 5 per" cent, on these values, was entirely wrong and unjust to leasees. If the present system continued it would result in ramshackle buildings all over the city. The progress of the city was being hampered by the present leasehold system. Who was going to erect good buildings, knowing that fchey stood a chance of through excessive ground rents at the end of each lease ? The only way the lessees could protect themselves was by putting up inferior-structures Mr E H Dean said the argument that the rental basis should be 5 per cent, of the freehold value of the land was a fallacy The method of taking the full freehold value was grossly unfair, because the freehold was not for sale and could not be bought. Nobody with common sense would dream of paying 5 per cent, rental on the freehold value of land which v:as not purchasable, and which could only be leased for a term of 14 years. In accepting the present form of lease renewable every 14 years at a revaluation to be fixed by arbitration, and in throwing up their right to receive valuation for improvements, coupled with the fact that there was no public competition for the leases, the lessees had placed their necks in a nwfise which in the end would strangle them. From the city's as well Sa the lessees' point of view the latter had a right ii equity to demand —it might have to b« done by

legislation—as a matter of common justice, the right to claim valuation for their improvements, that if lessees so desired the lease should be put up to public competition, to test the report of the arbitrators, and then if they did not wish to pay the rent they should go out and be paid for improvements. If that were not done nobody would take up such leases in future. Mr P. R. Sargood said nobody from elsewhere would come to Wellington and take up one of the leases. What financial institution would advance money on improvements on the present lease system? The Chairman said the Harbour Board would soon be throwing open large areas of reclaimed land,' and if the rentals of leases were based on the present system nobody would touch them- Business firms wishing to establish headquarters or branches here would fight shy of such leases. It was decided to form a Leaseholders Association, and draw up rules to submit to a later meeting. The following were appointed a committee: —Messrs H. C. Tewsley, L. 0. H. Tripp, A. H. Miles, F. Townsend, S. Kirfccaldie, F. Hayba'ttle, and J. Dyer.