CITY of Windhoek executives are against a proposal by a private company that cheaply bought a N$10 million plot from council in 2016 to sell it on to a state-owned agency - warning that it could set a dangerous precedent.
The City of Windhoek sold the land, measuring 10 hectares (roughly 10 football fields), to Street House Entertainment for N$10 million to set up an amusement and recreational park at Rocky Crest Extension 8.
Now, Street House owner Roland Jacobs wants to sell the land to the Road Fund Administration (RFA), who plan to set up a driver testing and licensing centre that would be run by the Roads Authority near Rocky Crest.
However, Jacobs needs permission from the municipality to sell the land, since he bought it to set up a recreational centre, such as a water park.
City executives are worried that Street House Entertainment and its owner changed their goal from the initial plan.
Council documents indicate that the city's chief engineer said: "the proposal from Street House Entertainment is not acceptable as it is not a special project anymore, and they will take money out of the property bought from council for less than what is market related".
Jacobs, who ran Street House clothing stores across the country, believes that he needs to recoup what was spent on the project. He also said that the municipality dragged this matter out for over 10 years, and blamed them for their indecisiveness.
Jacobs said the economic environment has now changed from what he envisaged 15 years ago.
The matter was discussed at the city council two weeks ago.
Jacobs declined to comment when approached by The Namibian yesterday.
An April 2022 document showed council was set to reject the application by Street House Entertainment to sell the land for the Natis project.
City of Windhoek spokesperson Harold Akwenye said that the rejection was not adopted at the last council meeting because councillors wanted more of an explanation, before making a final decision.
Documents published by the municipality provide an overview of how this project has transitioned from a recreational centre to housing, and now a driving school centre.
SPECIAL PROJECT
Documents show that Street House proposed an amusement and recreational park project in 2006, which was provisionally approved in 2012, by the Windhoek City Council.
Street House claimed that the project would cost over N$415 million, which includes land costs (N$10 million), town planning, environmental assessment (N$2,5 million), bulk services (N$15 million) and a recreational park which would cost around N$400 million.
The deeds of transfer and sale agreement were subsequently signed in 2013 and 2016 under the "special projects policy" of council. However, the agreements included conditions that prohibited Street House from selling the land to a third party without the consent of the city council.
Another clause allowed the city to punish Street House with a payment of 20% if it attempted to sell the land without erecting buildings on it.
Council documents indicate that Street House Entertainment complied with the town planning requirement of having the land subdivided but failed to install bulk services as agreed.
In 2019, four years after signing the land deal, Street House approached the city council to ask the municipality to revise their development plan to recreational (50%) and residential (50%)
The company blamed the recession of the Namibian economy and the drought.
Street House proposed a plan to include new targets, such as keeping the recreational park (turning the water park to a dry park) and building houses at Rocky Crest.
"The idea is to create 223 stands with an average of 150 square metres, and to construct two bedroom free-standing units averaging 57 square metres," the presentation said.
ABOUT-TURN
The housing plan was approved by the then environment commissioner, Theo Nghitila, however, Street House again made another u-turn.
Street House, through their lawyer André Swanepoel from Dr Weder, Kauta and Hoveka, wrote to the City of Windhoek in October 2020, asking the municipality to relax several clauses of the land agreement.
In that letter, Street House blamed the economic downturn, Covid-19 and a N$24 million bond taken out with Bank Windhoek by Street House, among others.
The lawyers said Street House was looking at investors to take over the project.
The city council offered Street House an opportunity to present their case in October 2020. Minutes from that meeting show that councillors were worried that the city would get a raw deal.
One of the officials who were against relaxing the rules was the then economic executive Fillemon Hambuda.
"Hambuda stated that councillors are continuously referring to the Hilton Hotel land sale," minutes from that meeting state.
The City of Windhoek sold a 2,4 hectare plot to the United Africa Group - owned by Martha Namundjebo-Tilahun and her husband Haddis Tilahun - for N$10 million in 2004. United Africa Group sold a portion of that land eight years later for N$100 million to companies such as FNB, Nedbank and the Social Security Commission.
"Lessons have been learned which will not be repeated," Hambuda said at that meeting.
NEW INVESTOR PROPOSED
Swanapoel wrote to the municipality in June 2021, informing the council that Street House wants to sell the land to the RFA.
The RFA wants to buy the land and pass it on to the Roads Authority, who want to turn the area into a Natis one-stop centre.
The place would offer the registration and licensing of vehicles, the annual renewal of vehicle licences, as well as the testing and issuing of learners licences.
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Natis is currently situated in the Northern Industrial area and in the city centre.
"Currently, over 63% or 252 000 out of 400 000 vehicles in Namibia are in Windhoek, while 80% of learners drivers reside in the capital," RFA CEO John Ali Ipinge said in a letter.
City heads of departments are against the application to allow Street House to be the middleman in the sale of the land.
For instance, the property department said the division does not support the waiving of the restrictive resale conditions.
"The property was allocated on private treaty because of the nature of the proposed development as special."
The department warned that waiving the restrictive resale conditions not only defeats the purpose of allocation but also set a precedent for other applications.
"Council should be cognisant of the fact that this will create a precedent on applications acquiring land under the special policy project, just to later change course and use this as an example why their restrictive resale conditions should be waived."
The land delivery department suggested that the land allocated to Street House should be used for housing.
The city's chief regional planner said the application to sell land to the RFA is not supported, based on the fact that this is no longer a special project.
"The intended development by the RFA and Roads Authority for a one-stop Natis centre can be supported upon submission of a proper motivation with intended development plans and layouts."
