uMhlathuze city won’t relent on club rentals
'For many years sport clubs have been paying close to nothing compared to their profit turnover'
AS sport and recreation clubs, especially those with waterfront properties, contemplate their future, the City of uMhlathuze is standing firm in its resolve to end the ‘free reign’ some have enjoyed.
Aimed at ending the abuse of using heavily-subsidised municipal land for commercial and monetary gain, the city has issued new rental scales which may ultimately cause a number of clubs – essential to the local tourism asset – to close their doors.
Retail shops, garages, workshops and camping sites are located at a number of clubs, benefitting from low or zero rentals.
The clampdown is also designed to free properties for future waterfront development, though based on the lack of activity at previous land expropriated for development, this could be very far down the time line.
ALSO READ: Sport clubs’ rental rates under fire
Club committees are scurrying for legal advice at present and while some agree that change is inevitable and even necessary, one was angered over the alleged lack of communication as well as the tone and terminology used in written correspondence.
The full statement from City Communications Manager Mdu Ncalane appears below.
The response to a query regarding the properties named in the 6th paragraph, is that it refers to ‘some portion of that land’.
Careful consideration
‘The City of uMhlathuze has noted the recent media reports and the outcry and resistance by some sports club directors over the issue of the commercial rates.
The Council has, at its meeting held on 8 December 2017, resolved on imposing commercial rental rates to all applicable sports clubs in Richards Bay after careful consideration of their commercial activities and business viability.
ALSO READ: uMhlathuze sport clubs reject new municipal leases
‘It should be noted that all sports club leases expired in 2015 and since then, they have been on month-to-month leases with the City of uMhlathuze, while new agreements were being drawn up. The final resolution was taken by the Council to implement new rental rates which are market related and applicable.
‘The city embarked on an extensive auditing process on all sports clubs and was exposed to all business activities and income-generating activities of all the clubs, which revealed that some clubs have huge profit turnovers, which is not in line with the lease agreements they signed.
‘It should be noted that for many years the sports clubs have been paying close to nothing compared to their profit turnover and basically profiting for free at the expense of money that could have gone to some basic services over the years.
‘The Council also resolved to reserve some portions of land for its own basic service development, hence some sports clubs had to release that portion of land back to the City of uMhlathuze.
‘The Council also decided that according to Section 14 of the Municipal Finance Management Act 56 of 2003, on reasonable grounds, the assets listed below are needed to provide the minimum level of basic municipal services for proposed developments at the Waterfront area: Meerensee Boat Club, Richards Bay Ski Boat Club, Zululand Yacht Club, Zululand Undersea Club, Richards Bay Sea Scouts and Zululand Multi Sport Club.
‘The clubs were subsequently informed accordingly of all these Council resolutions and upon that consultation, new leases were drawn up and served to clubs for their consideration and approval, with new commercial rental rates.
‘Some clubs have requested to be given some time to discuss the new rental rates with their boards of directors and management, which the city will respond to in due course
‘The City of uMhlathuze also wants to put it categorically that these resolutions were agreed upon in a full Council meeting held on 8 December 2017, before some other Councillors of the opposition parties walked out of the meeting after being defeated in a debate over the funding of the Richards Bay Football Club.’
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