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URA issues acquisition offers for First Street/Second Street Project

The Urban Renewal Authority (URA) issues offer letters to owners affected by the First Street/Second Street redevelopment project today (Thursday) to acquire their properties by private agreement. Affected owner-occupiers of domestic properties will be offered $3,137 per square foot on a saleable area basis.

The URA Board approved the purchase offers during a regular meeting today.

A URA spokesman said that approximately $468 million would be used to acquire all the 293 interests involved in this project. Overall, the project is estimated to cost a total of $1,134 million including costs of acquisition, re-housing, interest and development.

According to a URA occupancy survey conducted earlier, the project at Sai Ying Pun, one of the earliest residential districts on Hong Kong Island, will affect about 300 households comprising about 750 persons.

"The owners will have ample time to consider our offers and to accept them within the next 60 days," he said.

Purchase offers of the URA are based on Government's Home Purchase Allowance (HPA) policy that links the level of compensation to the open market value of a notional seven-year-old replacement domestic flat in a similar locality for owner-occupiers.

The purchase offers also include an incidental cost allowance, where applicable, as an incentive to encourage owners to sell their domestic properties to the Authority within the 60-day period. This allowance serves as a subsidy for the removal and various expenses normally incurred in the purchase of a replacement flat.

With reference to Government's current rate of ex-gratia removal allowance, the URA's incidental cost allowance for owner-occupied domestic property will be $1,030 per square metre (or about $96 per square foot) of the saleable area or, in any event, not less than a lump sum of $96,000. For domestic property that is either tenanted or left vacant, the lump sum allowance is $73,250. The incidental cost allowance is kept under constant review and adjusted for each individual project.

"We have begun sending out the offer letters to individual owners today. The letters contain all the details of the offers, the valuation method and the incidental cost allowance," the spokesman said.

In addition, the URA will organise a series of briefings for both domestic and non-domestic owners shortly on details of the offers and the acquisition procedure. URA staff will give personal attention to each individual case of affected owner and tenant. A hotline service (telephone no. 2588 2333) will be provided to answer any enquiry that the residents may have.

The URA appreciates that some residents may experience personal or family difficulties during the process of acquisition and removal. Therefore, an urban renewal social service team operated by St. James' Settlement has been designated to provide counselling service and practical assistance to these residents.

Covering a site area of about 3,511 square metres, the project will be a residential development with some retail accommodations to be completed in about six years' time. Improvements will include an open space area of 700 square metres and a residential care home for the elderly of 2,200 square metres.

An initial artist's impression of the project after redevelopment is available at
http://www.ura.org.hk/usrAtt/512000/first_st_ai.jpg