Mod shopping mall for city under scan
By K.B. Ganapathy
The Mysore City Corporation with 65 members in its Council passed a very important resolution last month on 10.10.2005 on the subject No. 164, with financial implications running into more than many crores of rupees every year.
The resolution pertains to the proposed commercial complex in the heart of the city adjacent to K.R. Circle, known as Makkaji Chowk with a land extent of 4.19 acres.
The General Council of the Mysore Mahanagara Palike (Mysore City Corporation – MCC), resolved on 10.10.2005, to lease the Makkaji Chowk land to Maverick Holdings and Investment Pvt. Ltd., (promoters of Garuda Shopping Mall in Bangalore) for 40 years, on a quarterly payment of rent of Rs. 75,37,500 (Rupees seventy five lakh thirty seven thousand five hundred only) with an increase of three percent annually.
This is to enable the said company to put up a commercial complex and manage it on the basis of BOOT — Build, Own, Operate and Transfer. That means the MCC will get its premier, most valuable property of the city back to its ownership after 40 years, hopefully. And knowing what happens to all the leased property, specially of the Government and quasi Government bodies, this Makkaji Chowk land of our City Corporation and property would be lost forever and most of us who are witness to this lease (more appropriately a deal) may not be here to see, what happens after 40 years.
Surprisingly, neither the social activists nor the NGOs have taken objection to the resolution dated 10.10.2005 passed on subject No. 164.
It is quite pertinent so recall here that the MUDA had auctioned just this year, on August 18, 2005, a commercial site measuring 5.3 acres for Rs. 20,52,99,999 (Rupees twenty crore fifty two lakh ninety nine thousand, nine hundred ninety nine) at an open auction about 4 kms away from Makkaji Chowk near the Race Course. Compared to that, the price of the land measuring 4.10 acres of Makkaji Chowk should he manifold and it is left to anybody’s imagination. According to a land developer, even at a conservative estimate of Rs. 4,000 per sq.ft, the 4 acres 19 guntas at Makkaji Chowk would be valued at Rs. 73,74,40,000 (Rupees seventy three core seventy four lakh forty thousand). However, it is said, in the open market, if auctioned, it will fetch about Rs. 200 crore TODAY.
Now compare this with the income MCC will get as a result of the MCC Council meeting resolution dated 10.10.2005. By the purported lease, the income that would be generated per year by the MCC is a mere pittance of Rs. 3,01,50,000 (Rupees three crore, one lakh, fifty thousand only) and for 40 years of the lease period it would be about Rs. 120 crores.
Well, the question is, why did the general body of MCC Council agree to give the land on lease for 40 years and for such a small quarterly rent? Lack of vision? Lack of business sense? Lack of concern for the finances of MCC? Lack of love for our city and its voters? Or was it just a faux pas?
Is it not in the interest of the Corporation and in turn the 10 lakh people of the city to auction this land and thereafter derive recurring income year after year for all time to come by way of tax on the capital value of the property, which will be over Rs. 5 crores per year, after the purchaser builds the building?
This is the best option avail- able to the MCC — it would get about Rs. 200 crores from the auction and also property tax of over Rs. 5 crores every year that would be revised upwards periodically. May be from the legal point MCC must auction it only for the specific purpose for which the Makkaji Chowk lands were acquired.
Even otherwise, if the amount realised from the sale is deposited in the bank at the lowest rate of interest, the interest earned alone will be about Rs. 12 crores, which is more than the income of Rs. 3,01,50,000 per year generated by leasing it out to Maverick Holdings and Investment Pvt. Ltd., as mentioned above.
According to B. Siddaraju, former Deputy Mayor and the only Corporator, who has objected to the resolution, the proposal to lease the property as per the resolution passed by the MCC on 10.10.2005, probably is going to be a financial disaster to Mysore Mahanagara Palike.
He has also alleged that it has been done to favour the political bosses, in his complaint to the Principal Secretary, Urban Development Department, M.S. Building, Bangalore, submitted on 25.10.2005.
It may be mentioned that the matter relating to Makkaji Chowk is a 45-year-old itch, for the then Municipality and later the Corporation to clean up this dilapidated and rundown down-town area. Many stalwarts among politicians and bureaucrats tried to acquire the Makkaji Chowk land from its more than 155 shop owners and tenants in order to develop the area as a modern commercial complex with no success at all.
According to M. Shivakumar, one of the Corporators, the proceedings for the requisition of shops in Makkaji Chowk was started in the year 1963 and in 1971, the properties were sought to be acquired by the MUDA on payment of compensation. From then on, the drama of going to the Court by certain persons like owners, tenants and land developers holding Power of Attorney started. And some even obtained Stay Orders.
Siddaraju, in his complaint to the Principal Secretary of Urban Development Department, has raised two pertinent points:
1. The land acquired by the MCC at Makkaji Chowk cannot be used for any other purpose other than for which it was acquired. According to the Corporation Commissioner, as submitted before the Council, the land was acquired for the purpose of constructing market building/commercial complex and cinema halls.
2. The land so acquired for such avowed objectives cannot be alienated by giving it on lease, as in this case, or sold. In such an eventuality, it should be turned to the original owners.
As such, it cannot even auction that land, according to some advocates. That means the MCC should itself take up the project for which the land was acquired and own it. But going by the past record and knowing our MCC officers and engineers, it would be a financial disaster if the Corporation itself undertakes this job! There would be a long delay and another scam. Do you remember the Mayura Complex near Ballal Circle and another complex opposite Ranjit theatre? Half-constructed buildings here stand as mute witness to our Corporation’s incompetence, corruption and apathy. And I do not know how many more such incomplete buildings are there in the city.
It seems that if the Government does not handle this case properly, it is going to land in the Courts where it will languish probably for another 45 years.
This is one more example to a show that development does not happen in our city because there is no political will and our politicians and bureaucrats have their own contingency plan (agenda). They seem to think that if the cost of development does not fit into their contingency plan, then the development project should be put on hold!
This post was published on June 12, 2023 7:40 pm