Mallory Street project begins property acquisition
The Mallory Street revitalization project of the Urban Renewal
Authority (URA) in Wan Chai has taken a major step forward when
owners of four private property interests within the site boundary
are offered purchase proposals today (Wednesday).
Occupying an area of about 8,400 square feet, the project stands
at a site which currently has two rows of "Tong Lau" comprising 10
Grade II listed buildings, of which 6 are owned by the Government.
The URA intends to redesign, restore and refurbish six buildings of
four-storey at Mallory Street to provide about 20 partitioned units
of about 650 square feet each for individual users. This pilot
project is a new and unprecedented attempt of the URA to help
revitalize the older part of Wan Chai and foster Hong Kong's
development of cultural and creative industries.
The remaining four buildings at Burrows Street, which are in a
very poor condition, will be demolished to make way for a
3,000-square foot theme garden for public enjoyment. Nevertheless,
an effort will be made to retain the facade of the Burrows Street
buildings, if technically feasible.
The total development cost of this project is estimated at $130
million, of which acquisition and rehousing cost is about $70
million.
Affected owner-occupiers of domestic properties will be offered
$6,351 per square foot of saleable floor area. The acquisition
offers are based on the Government's Home Purchase Allowance (HPA)
policy. HPA is the difference between the market value of a
notional seven-year-old flat in a comparable quality building in a
similar locality (commonly known as "seven-year rule") and that of
the acquired property. In addition to the market value of the
acquired properties, owner-occupiers will receive the full HPA
amount whereas owners of tenanted and vacant domestic properties
will receive a supplementary allowance up to half of the HPA.
As in previous projects, the URA has appointed seven independent
valuation firms for the valuation of the unit rate of the notional
seven-year-old flat. The lowest and highest valuations are
eliminated before averaging the remaining five as the final unit
rate for the offers.
The spokesman said that this broad-based and objective method of
valuation has proved to be well accepted by most owners in previous
projects.
A URA spokesman said: "The value of a seven-year-old notional flat
is meant for calculating the cash compensation offers and does not
imply any guarantee for the market supply of seven-year-old flats
of similar sizes in the locality currently. Owners have the
sole discretion on how to use the cash compensation according to
their personal needs and preferences."
For a building in single ownership, it is valued either on its
existing use value plus relevant allowances for shops and domestic
units in the building or on its redevelopment value plus an
ex-gratia allowance of 5%, whichever is higher.
Affected owners will have ample time to consider the URA's offers
and to accept them within the next 60 days. In addition to
the acquisition offers, owners will receive an incidental cost
allowance (ICA), where applicable, as an incentive for them to
accept the offers within the 60-day period. This allowance serves
as a subsidy for the removal and various other expenses normally
incurred in the purchase of a replacement flat. The ICA is
reviewed from time to time in accordance with the Government's rate
of ex-gratia removal allowance and the Composite Consumer Price
Index.
The current ICA for owner-occupied domestic property is $95,000 or
$ 1,040 per square metre (about $96.6 per square foot) of saleable
floor area, whichever is higher. For domestic property that is
tenanted or vacant, the ICA is $72,500.
For non-domestic properties, the acquisition offers will include
an ex-gratia allowance on top of the open market value. The
allowance for tenanted or vacant non-domestic property is 10 per
cent of its market value or one time the government rateable value,
whichever is higher. The allowance for owner-occupied
non-domestic property is 35 per cent of its market value or four
times its rateable value, whichever is higher.
The URA will contact owners concerned and explain to them the
URA's acquisition offers. Briefing sessions will be held for
tenants on the compensation/rehousing arrangements. Residents
can also contact the URA's Neighbourhood Centre in Wan Chai or call
the URA hotline at 2588 2333 for any enquiry they may have.
The Authority has also commissioned an urban renewal social
service team staffed by professional social workers of the
Methodist Centre to provide counseling service and practical
assistance to residents who may encounter personal or family
problems.
END