NewQuay traders in fees revolt
31 May 2011
NewQuay’s traders are in open revolt against MAB Corporation and are taking legal action against the giant developer over what they consider to be excessive precinct management fees.
The 30 or so traders say they have received little or no value from the millions of dollars that MAB has levied on them over the past seven years and they are taking action in the Victorian Civil and Administrative Tribunal (VCAT).
They want a refund if the money has been misspent and they want their contracts revoked.
MAB says it can account for every cent spent on the precinct and it welcomes the VCAT action as an opportunity to clear the air.
The traders took action last November and were before VCAT on April 13. At this hearing, VCAT gave them until June 1 to file their claim. The case has been adjourned until July 13.
Retail owners in NewQuay signed up for 10 years of precinct management fees and promotional levy when they bought their properties.
But, with a shrinking number of car parking spaces in the precinct and difficult trading conditions, they say they can’t afford the levy and some have stopped paying.
They claim that MAB won’t reveal details of where the almost $1 million in annual fees is spent and they suspect that MAB is spending the money on its own administration and marketing of apartments.
The traders claim that MAB has refused to detail $400,000 in annual administrative costs, $300,000 in marketing, $100,000 in security, $80,000 in cleaning as well as maintenance and repairs.
They say their contracts stipulate that they should have access to spending details but MAB has said they are not entitled to the information.
MAB denies it has not been fully transparent but says that, as it has now outsourced the precinct management function to Jones Lang LaSalle, technically it is no longer responsible.
A MAB spokesperson said the precinct spending was independently audited every year. He said once the VCAT action had been resolved, MAB was considering handing back the precinct management function.
“We are wondering what is the best way to deal with this,” the spokesperson said. “Is it appropriate to hand it over to the retailers? Or would it be detrimental to the precinct.”
The traders say their contracts indicate that they should be charged $34 per square metre annually, but that the charges are closer to $90 per square metre.
This, they say, makes doing business at NewQuay more expensive than at Chadstone shopping centre – and they are not provided with anywhere near the same facilities to attract customers.
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