Mallory Street project begins property acquisition
The Mallory Street revitalization project of the Urban Renewal
Authority (URA) in Wan Chai has taken a major step forward when
owners of four private property interests within the site boundary
are offered purchase proposals today (Wednesday).
Occupying an area of about 8,400 square feet, the project stands at a site which currently has two rows of "Tong Lau" comprising 10 Grade II listed buildings, of which 6 are owned by the Government. The URA intends to redesign, restore and refurbish six buildings of four-storey at Mallory Street to provide about 20 partitioned units of about 650 square feet each for individual users. This pilot project is a new and unprecedented attempt of the URA to help revitalize the older part of Wan Chai and foster Hong Kong's development of cultural and creative industries.
The remaining four buildings at Burrows Street, which are in a very poor condition, will be demolished to make way for a 3,000-square foot theme garden for public enjoyment. Nevertheless, an effort will be made to retain the facade of the Burrows Street buildings, if technically feasible.
The total development cost of this project is estimated at $130 million, of which acquisition and rehousing cost is about $70 million.
Affected owner-occupiers of domestic properties will be offered $6,351 per square foot of saleable floor area. The acquisition offers are based on the Government's Home Purchase Allowance (HPA) policy. HPA is the difference between the market value of a notional seven-year-old flat in a comparable quality building in a similar locality (commonly known as "seven-year rule") and that of the acquired property. In addition to the market value of the acquired properties, owner-occupiers will receive the full HPA amount whereas owners of tenanted and vacant domestic properties will receive a supplementary allowance up to half of the HPA.
As in previous projects, the URA has appointed seven independent valuation firms for the valuation of the unit rate of the notional seven-year-old flat. The lowest and highest valuations are eliminated before averaging the remaining five as the final unit rate for the offers.
The spokesman said that this broad-based and objective method of valuation has proved to be well accepted by most owners in previous projects.
A URA spokesman said: "The value of a seven-year-old notional flat is meant for calculating the cash compensation offers and does not imply any guarantee for the market supply of seven-year-old flats of similar sizes in the locality currently. Owners have the sole discretion on how to use the cash compensation according to their personal needs and preferences."
For a building in single ownership, it is valued either on its existing use value plus relevant allowances for shops and domestic units in the building or on its redevelopment value plus an ex-gratia allowance of 5%, whichever is higher.
Affected owners will have ample time to consider the URA's offers and to accept them within the next 60 days. In addition to the acquisition offers, owners will receive an incidental cost allowance (ICA), where applicable, as an incentive for them to accept the offers within the 60-day period. This allowance serves as a subsidy for the removal and various other expenses normally incurred in the purchase of a replacement flat. The ICA is reviewed from time to time in accordance with the Government's rate of ex-gratia removal allowance and the Composite Consumer Price Index.
The current ICA for owner-occupied domestic property is $95,000 or $ 1,040 per square metre (about $96.6 per square foot) of saleable floor area, whichever is higher. For domestic property that is tenanted or vacant, the ICA is $72,500.
For non-domestic properties, the acquisition offers will include an ex-gratia allowance on top of the open market value. The allowance for tenanted or vacant non-domestic property is 10 per cent of its market value or one time the government rateable value, whichever is higher. The allowance for owner-occupied non-domestic property is 35 per cent of its market value or four times its rateable value, whichever is higher.
The URA will contact owners concerned and explain to them the URA's acquisition offers. Briefing sessions will be held for tenants on the compensation/rehousing arrangements. Residents can also contact the URA's Neighbourhood Centre in Wan Chai or call the URA hotline at 2588 2333 for any enquiry they may have.
The Authority has also commissioned an urban renewal social service team staffed by professional social workers of the Methodist Centre to provide counseling service and practical assistance to residents who may encounter personal or family problems.