Property acquisition for Pak Tai Street/San Shan Road project to start soon
The Urban Renewal Authority (URA) today (Tuesday) announced that it would soon make acquisition offers to owners of the Pak Tai Street/San Shan Road project in Ma Tau Kok. Eligible owner-occupiers of domestic properties affected by the project would be offered $8,939 per square foot of saleable area, which is the market value of a notional seven-year-old flat.
The acquisition offer for the project was endorsed by the Land, Rehousing and Compensation Committee of the URA after careful deliberations.
The Pak Tai Street/San Shan Road project is implemented in accordance with the new Urban Renewal Strategy (URS) which includes the flat-for-flat (FFF) option as an alternative to cash compensation to the domestic owner-occupiers subsequent to the project authorisation. Owners can consider taking cash compensation or using it to buy a new flat in-situ in the new development or in the Kai Tak development.
The fixed unit prices for the FFF option will also be included in the offer letters which will be issued to property owners by end February 2012. They will have 60 days to consider and accept the offers. This is the first FFF option offered after the promulgation of the URS on 24 February 2011.
A spokesperson for the URA stressed that the FFF option is only an alternative choice and the amount of cash compensation and ex-gratia payment offered to a domestic owner-occupier will not be increased or enhanced by joining the FFF arrangement. Neither is it a direct exchange of an old flat for a new one, he added. In considering the option, the domestic owner-occupier can obtain independent professional surveyor's advice on the fixed unit sales prices, for which the URA will reimburse a professional fee not exceeding $8,000 provided the owner accepts the acquisition offer with the option within the 60-day offer period and upon completion of purchase by the URA of the affected property interest.
The acquisition offers for domestic properties are calculated in accordance with the Government's Home Purchase Allowance policy (HPA) in which HPA is the difference between the market value of the acquired property and that of a notional seven-year-old flat of similar size in a similar locality. In addition to the market value of the acquired properties, eligible owner-occupiers will receive the full HPA amount whereas eligible owners holding wholly tenanted or vacant domestic properties will receive a supplementary allowance (SA) up to half of the HPA.
In line with the established mechanism, the URA has appointed seven independent valuation firms for the valuation of the unit rate of the notional seven-year-old flat. The whole process is virtually transparent, open and fair.
Domestic owners will also receive an incidental cost allowance (ICA) as an incentive for them to accept the offers within the 60-day period. The current ICA for owner-occupied domestic property is $121,500. For domestic property that is wholly tenanted or vacant, the ICA is $94,800.
For non-domestic properties, the acquisition offers to eligible owners will include an ex-gratia allowance on top of the 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 market value of each non-domestic property is based on the higher valuation of two independent valuation firms appointed by the URA.
Eligible owners and tenants who operate business in the affected shops will enjoy an additional Ex-gratia Business Allowance (EGBA) payable at the rate of 0.1 time rateable value for each year of continuous occupation of the premises up to a maximum of 30 years, subject to a minimum amount of $70,000 and a maximum of $500,000.
Based on the URA's policy, landlords will not get any additional compensation for terminating the tenancies with their tenants since their eligibility to compensation is based on their tenanted status on the date of freezing survey; nor will they be entitled to the option in the event of obtaining possession from their existing tenants after the date of freezing survey.
Upon completion of the property acquisition, the URA will make ex-gratia payment or rehousing arrangement for the tenants concerned, if eligible.
Being the fifth redevelopment project the URA has implemented in the district to date, the project area is situated at a corner site abutting Pak Tai Street in Ma Tau Kok, covering an area of about 1,280 square metres. Built in 1957, the 12 street numbers of buildings within the project area are in a generally poor condition. The buildings are of eight storeys with no lifts and there are unauthorised rooftop structures.
The Pak Tai Street/San Shan Road project affects a total of 108 property interests, including 96 domestic units and 12 shops affected, according to the freezing survey conducted by the URA on 25 March 2011.
The URA's initial proposal is to redevelop the site to provide about 130 residential units with flat sizes of around 35 square metres to 65 square metres, with completion tentatively scheduled for 2018/2019.
The project was implemented by way of a development project in accordance with Section 26 of the Urban Renewal Authority Ordinance (URAO) and was published in the Gazette on 25 March 2011 under Section 23 of the URAO. On 13 January 2012, the Secretary for Development gave authorisation to the URA under Section 24 (4) (a) of the URAO to proceed with the project, following a two-month consultation period, during which an objection was received and deliberated. The said objection has been dismissed and no appeal has been received from the only objector.
The URA will organise a series of briefings for the affected owners, residents and shop operators to explain to them the acquisition and compensation and rehousing arrangements. An urban renewal social service team staffed by social workers of Salvation Army, which was appointed by the Urban Renewal Fund Limited will provide counselling and practical assistance that the residents may need. The contact number of the social service team is 2117 8672.
(ENDS)