Tourism Minister Konrad Mizzi has refused to say what kind of development, in terms of height, for the Corinthia project would be acceptable for the government.

The Parliamentary Environment and Development Planning Committee is discussing the proposed deal with Corinthia for a mega-development which would include a six-star hotel as well as various apartment blocks in St George’s Bay. The request for this discussion was made by a number of NGOs as well as by members of the Partit Demokratiku.

Minister Konrad Mizzi also refused to publish the Corinthia contract and the 2015 Memorandum of Understanding, stating that government has no problem publishing the contract “at the right time”, adding that right now they are still negotiating with the International Hotels Investment Group.

During the debate, Konrad Mizzi let loose that government discussing height parameters with the IHI Group. This raised a number of concerns, including ones regarding whether this would mean the PA would effectively rubber-stamp the project.

PN MP Karol Aquilina highlighted that, if the Corinthia Group have been given 100,000sqm for residential use, then that could lead to three towers each the size of the db Group tower. He asked, since Mizzi is handling the discussion, what government would consider an acceptable height.

Tourism Minister Mizzi did not answer, saying discussions are ongoing. “We have no intention to replace planning process, we are just setting parameters to have serenity in this development.” Asked what he is negotiating, what is acceptable for him, he said that when the agreement is concluded he will provide an update.i

Mizzi, during his presentation,  said that while negotiations are ongoing, the government has listened to stakeholders and is working on the contract. He said that Corinthia is agreeing that there will be no land reclamation and there would not even be a request for it. He said that they also agreed that 50% of the whole footprint will remain tourism related or will be landscaped areas. He said that the increased ground rent mechanism will be triggered by the government of Malta.

Mizzi added that the volume of residential property that may be released on to the market at any point at the same time will be capped to 25,000 sqm. He also said that the government ’s consent will be required for any transfer of unfulfilled development obligations.

He said that there had also been criticism that IHI Group might sell the project or parts of it. He said that there will be a joint project monitoring committee to oversee project deliverables.  “They cannot just sell part of the project,” Mizzi said.

Mizzi also highlighted a number of changes that occurred between the MoU stage and now. Mizzi said that government reduced the ceiling of development of residential and commercial development from 146,000 sqm to 100,000 sqm since the MoU was signed. He said that government is committed not to declassify the foreshore. He said that the €52 million for government to waive the restriction condition is actually more than the €38 million which was set at MoU stage.  He said that the minimum investment in the first phase of the project will be €100 million and minimum overall investment will be €300 million.

PD MP Godfrey Farrugia said that 100% of the footprint of the site is set to be completed for tourism as per the local plan, and not for residential development.  “If we are going to give 50% of a tourism site for other purposes, then tourism will lose in the long run.”

PN MP Jason Azzopardi questioned whether the 2015 MoU included a provision for development beyond the hotel aspect.  He also questioned whether what he read in the media, that there is a clause where the developer can ask government where, if there is a disproportional hardship, to change contractual terms.

Questions were also taken from other N MPs including Marthese Portelli, and a number of NGOs and public persons who were present.

FAA Coordinator Claire Bonello questioned what would happen if the Planning authority refuses the Planning Control application to change the site zoning.

She highlighted that the Bolkenstein Directive prohibits the automatic extension (by way of duration) of scarce land resources such as land by the sea and lakeside zones without a public call for tenders. “In effect, this is the automatic (without tendering) extension of the duration of the concession.so this would be prohibited by EU law,” she said. Mizzi said that they will look into it, but stressed that the foreshore land is not being extended, not even in terms of contract length.

DLH President Maria Grazia Cassar highlighted that developers should be following government proposals and plans, and not the other way around. Arnold Cassola said that when high-end tourists who come to Malta end up faced with so many towers in the area and the loud music from Paceville, “I think they will realise they are not in a six-star environment.”

Andre Callus from Moviment Graffitti said that: “As you previously said, we have not yet reached the point to evaluate the impacts of this project. As such we should not be here discussing the contract. We should first draft a plan to see the impacts of such massive projects, and only then discuss such contracts.” He questioned how such a contract can be considered without a masterplan being in place.

Briguglio asked if a social impact assessment took place and for details. If not, he asked if one will be conducted.

The Tourism Minister attempted to answer the above questions.

Mizzi said that this tourism project does not come without business risk as attracting people willing to pay €500 a night is quite challenging. H

He said that there is still a major demand for office space, and foreign investors are looking for quality office space.

He said that a broader regeneration of the zone is something tourists coming to Malta are asking for. “The balance of the process will be able to be debated when it reaches planning stage.”

He said that the PA has no obligation to approve the project if a contract is signed between the IHI and government. He spoke of the need to review the local plan for the St George’s Bay area given the latest developments.  PD Leader Godfrey Ferrugia said that since government knows the contract goes against the local plan, then government is ready to sign a contract which allows for 50% of the site not to be for tourism purposes, adding that in order to change the local plan an entire process needs to be taken and passed through Parliament.

Minister Mizzi, continuing to answer the questions, he said that the Corinthia Group have expressed their intention not to have as many as 12 towers, and said that the 100,000 sqm is the gross floor area that can be developed, irrespective of the heights.

On the land value, he said that the €52 million is being paid for the lifting of a restrictive condition and extending the timeline to 99 years. He said that if needed more detail can be provided in the NAO committee.

If the PA does not approve the development, the current tourism development will remain and the first part of the non-refundable payment will still be paid, he said

On height limitations, he said they will be impose by the planning process, and said that government is discussing the height issues on site.

Marthese Portelli asked whether government’s discussion on this material will affect the PA or the local plans..

 “We are considering discussions on different parameters, around what is desirable from an aesthetic point of view.  PA and ERA will have the final decisions on height, as well as the amount which can be used for residential development and on the project phasing,” Mizzi said.

Godfrey Farrugia commented and said that government should be negotiating according to the current local plan, not against it.

Konrad Mizzi stressed that what they are doing is purely discussing what is desirable in terms of parameters from government’s side. He said that if the PA decides to only approve something lower height wise, the developer would need to abide by that, but said that the developer would not be able to apply for anything higher than what would have been agreed to by the government.

Environment Minister Jose Herrera stressed that this will not mean that the PA or ERA would need to abide by what is agreed in the government contract, adding that they would need to follow their respective laws and policies.

A discussion took place on whether the committee will have another debate on this issue.  The Opposition proposed to adjourn this debate till next week.  The Chairman said that this discussion will continue in front of this committee if there are changes to the local plan,  as the debate on the contract will take place in the NAO committee and in Parliament.  Both sides requested a ruling from the Speaker with PL wanting one on their proposal, and the ₩PN wanting a ruling on why they were not allowed to vote on their proposal

 

Background

The Parliamentary Environment and Development Planning Committee is today discussing the proposed deal with Corinthia, for the mega-development which would include a six-star hotel as well as various apartment blocks in St George’s Bay. The request for this discussion was made by a number of NGOs as well as the Nationalist Party.

International Hotel Investments (IHI) currently holds a lease on the land in question, where it owns three hotels - but it wants to redevelop the area to hold a six-star hotel as well as have the lease extended to 99 years, and for MPs to remove the currently imposed restriction on tourism development.  

The proposal has raised many eyebrows, with some arguing that government, in their proposed deal, made the deal at too low a price, giving the land for €52 million.

The full master plan of the Corinthia development in St George’s Bay is not yet known. However, the first phase of the development would if approved, include not only the redevelopment of the Corinthia St George’s Bay hotel but also two “luxury serviced residential blocks, the highest proposed to be 15 floors on land located between the current Corinthia and the Radisson Hote

Other issues, like one related to automatic land reclamation allowed in the contract, seem to have been addressed government who said this will be removed. However, it is pertinent to note that Corinthia had said that while such an allowance had been in the contract, it was not going to conduct any land reclamation. 

The government said that the deal will go through parliament once a conclusion is reached and that it will "naturally fully respect its EU obligations".  They also said that "as a matter of standard practice", the government is addressing in "an appropriate manner" the points raised by the various stakeholders.