CRR IV FEIR ~ 26042010 [FINAL].pdf - Environmental Projects

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EIA FOR THE PROPOSED LANGEZANDT QUAYS DEVELOPMENT IN STRUISBAAI HARBOUR: CRR 3.1.128 3.1.129 Justine Sweet (97) Justine Sweet (97) The development proponent has failed to demonstrate the sustainability and feasibility of the proposed hotel. It is submitted that there is little need for a further hotel in Struisbaai and a development which incorporates a hotel is simply not sustainable (financially or otherwise). Previously, a hotel in Struisbaai failed. Further, we point out that, despite being the developer of another proposed boutique hotel in the area, [in fact, no more than 1.5 km from the site] namely at Langezandt, the development proponent has failed to mention or consider such boutique hotel. We have also been advised that a new hotel has been approved on the old Struisbaai Hotel site which would also affect the alleged feasibility of the applicant's proposed development. Significantly, we understand that although application was made for a building outside of the SDF requirements, the Department failed to approve it and that development may be constructed to a maximum height of 10m [as advised by the chairman of the Struisbaai Residents Association]. These facts are, it is submitted, material facts which ought to have been considered and disclosed [in this regard, we refer to the requirement in regulation 23(2) which requires that a development applicant place all relevant facts before the Department] and which almost certainly affect the economic feasibility of the proposed hotel. The impact of the proposed hotel on guest house operators (and their employees) has also not been adequately considered. Disagree. With reference to Section 6.1.3, Annexure P, Annexure R and Annexure U of the FEIR the proposed development has been assessed to be both financially viable (specifically Alternative 6) and confirmation has been received from CAM confirming their ability to provide services. Disagree. Please refer to Section 5.2.3 of the FEIR. Process Process I:\ENV\PROJECTS\401807~Struisbaai\Public Participation\Comments & Response\EIR\CRR IV FEIR ~ 26042010 [FINAL].doc 158 of 193
EIA FOR THE PROPOSED LANGEZANDT QUAYS DEVELOPMENT IN STRUISBAAI HARBOUR: CRR The feasibility study included in the draft EIR is, in our view, wholly inadequate. In this regard, we confirm that the EAP has commissioned a further feasibility study (and must assume, based on this fact, that the EAP holds a similar view). For what it is worth, the feasibility study fails to demonstrate an understanding of the principles of economic viability analysis (feasibility study) [these comments as well as those directly below are courtesy of Lori Colussi, a professional quantity surveyor at De Leeuw, Cape Town of the De Leeuw Group]. It is lacking in, amongst other things, the following respects: There is no development programme to understand whether values are future or present; There is no description of product; There is no basis stated for land value (square metre bulk rate); There is no proper analysis of the construction costs. On a cursory analysis, these costs reflect that they are not realistic; Please refer to Section 2.4.6, Annexure P and There is no reference to local authority or Annexure R of the FEIR. An independent other approvals of any nature; There is no feasibility assessment was undertaken by reference to value added tax; Reference Turner & Townsend and confirmed that the has been made to "other costs" being proponent‟s feasibility statement (Annexure P calculated at 20% of development costs. of the DEIR/FEIR) was deemed reasonable 3.1.130 Justine Sweet (97) Process This fails to indicate a proper understanding and acceptable i.e. Basement + 3 Floors. This of the relevant costs or items; and alternative would yield a 24.08% profit margin Numerous additional costs are excluded whereas the proponents calculation was (although there is an indicated intent to 24.16%. It is therefore reasonable to accept allow for such costs at 20%). These costs this figure as accurate. include, amongst other things, geotechnical investigations, land surveyors fees, legal costs, funding costs, escalation in construction costs, professional fees, local authority costs such as plan scrutiny fees, interim taxes, bulk service charges, marketing and pre-opening costs, furnishings, fixtures and equipment, financing costs, occupational health and safety compliance, etc. In summary, the feasibility study does not provide sufficient information to properly analyse or identify the risk to the proponent developer. I:\ENV\PROJECTS\401807~Struisbaai\Public Participation\Comments & Response\EIR\CRR IV FEIR Ordinarily ~ 26042010 [FINAL].doc a feasibility study should be 159 of 193
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