Sub-council 16 has unanimously recommended the starting of a public participation process to grant long-term rights by public competition for the property in which Green Point’s McDonalds is based.
The City-owned property is Erf 2188 in Fritz Sonnenberg Road.
The property in question was originally leased to Flying High Restaurants (Pty) Ltd, who ran the Seagulls Restaurant on the premises.
The lease was entered into in July 1987 for a period of 25 years with an option to renew for a further period of 4 years and 11 months.
When the restaurant went into liquidation in 2000, the lease was handed over to Newinvest 12 (Pty) Ltd, who are still the lessee. The lessee exercised their option to renew the lease for the additional 4 years and 11 months, therefore, the lease expired in June 2017.
The lessee further applied for a two years and 11 months’ lease extension from June 2017 to May 2020 which was granted. The lessee is subletting the premises to McDonalds, which is operating a 24-hour fast food outlet.
The sub-council heard that this arrangement is not optimally viable for the City and the lapse of the lease gives an opportunity for the City to go out on a public tender to seek a new tenant.
It was stated that the property is a significant value asset with a valuation of R10 500 000 and leasing the property on a long-term lease will not only maximise the rental potential by awarding the lease to the higher bidder who meets the requirements of the facility but also relieves the municipal entity of the burden of securing the property and maintaining it.
The finance doctorate said the current tenant had a specific arrangement to allow for access during events at the Cape Town Stadium and the same will have to be arranged with a new tenant. The lessee was to be made aware of the fact that major events at the stadium could be disruptive and noisy.
Sub-council manager, Gershwin Fouldien, said the property management department will deal with the advertising of the matter.