Scores of jobs and 30 businesses are on the line in a bustling small business centre in Buffalo City after landowner Transnet and BCM agreed to an astounding 35% rates hike.
In a bizarre turn of events, the first deal agreed to – apparently without consultation with the the tenants of Arcadia Industrial Park – was a scorching 80% increase.
In an ominous note to BCM ratepayers, Transnet’s hired property managers wrote to tenants: “This [35%] was based on information received on what the average rates increase was in East London.”
The proposed 80% increase came after Transnet apparently agreed to a new property valuation of the run-down but prime central city property from R29m to R52m in the 2017 valuation.
Some buildings in the park are said to be 120 years old and crumbling.
Les Holbrook, Border-Kei Chamber of Business director, said such huge increases in rates would put businesses under pressure and eventually drive people out of business.
Transnet did not reply to questions sent to them.
BCM spokesperson Samkelo Ngwenya confirmed the land belonged to Transnet.
He said of the valuation: “Transnet had the opportunity to object to this as per procedure. No objection to this property has been lodged.”
Tenant Richard Field, a managing member of Lifestyle Flooring & Décor, said that the increase was a harsh blow to the 30 small businesses in the park.
In a letter seen by the Dispatch, Field told Transnet it should have raised a formal objection to the increased valuation.
“First and foremost it is my opinion that [the park property managers] should have insisted that Transnet raised a formal objection to the increase. This process is relatively simple and involves filling in a form and paying the princely sum of R55. At no stage were the tenants consulted about the increase or how the new values were calculated. The new rates were simply passed on by Transnet to the property managers, who then dumped it onto us, the tenants.
“For Transnet to argue that they have no problem with an 80% rates increase in rates can, for me, only be due to the fact that they are able to pass the increase on. If they were actually going to have to pay the increase they would in my opinion have a very different outlook on this, as I am convinced the property managers would have had as well – should they have been paying,” wrote Field...