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Editions

MAB gives up on precinct fees

01 Oct 2013

MAB gives up on precinct fees Image

By Bethany Williams

MAB will no longer require NewQuay traders to pay precinct management fees, in a move that is being considered a win for operators.

In 2011, a group of traders took MAB to the Victorian Civil and Administrative Tribunal (VCAT) seeking a refund of what they considered to be excessive precinct management fees, which delivered little to no value.

The traders were required to sign up for 10 years of precinct management and promotional levies when purchasing their properties.

According to the traders’ lawyer, Frank Guastalegname the terms of the agreement also meant MAB could renew the agreements upon expiry without discussing it with the owners.

Under the Precinct and Asset Management Agreements (PAMA), fees paid by traders covered marketing activities, property management (including collection of rents, leasing, rent reviews and property maintenance) and maintenance of shared services.

In 2010, MAB appointed Jones Lang LaSalle (JLL) as NewQuay precinct manager responsible for overseeing the delivery of these services.

According to Mr Guastalegname, in the last budget owners were charged $540,000 in levies, of which only $140,000 was spent on precinct management services.

Mr Guastelgname said the remaining $400,000 was spent on commissions and wages.

Although the case is ongoing, Mr Guastalegname said he would like to think the decision to dissolve the agreements was related to the VCAT action.

According to MAB chief operating officer David Hall, a number of owners had not paid their PAMA levies, resulting in JLL not being able to pay for the services it was contracted to deliver.

“As this would not be fair on the owners who continue to pay their PAMA levy invoices, we believe that it would be more equitable for each tenancy to be managed on a stand-alone basis in the future,” Mr Hall said.

“NewQuay retail owners are now putting in place arrangements to manage their properties independently.”

“However, the City of Melbourne will continue to manage general maintenance and cleaning of the public areas at NewQuay and MAB continues to support and contribute to Destination Docklands to manage marketing and drive visitation,” Mr Hall said.

Jones Lang LaSalle ceased operations as the NewQuay precinct manager on September 30.

Although traders no longer have to pay precinct management fees, VCAT action relating to fees already paid continues.

Despite traders launching VCAT action 2011 the case is yet to be heard.

A VCAT directions hearing will be held next month to determine a hearing date for the case.

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