The Penang Turf Club is baulking at the idea of paying quit rent at commercial rates after its Batu Gantung land was controversially rezoned from ‘recreational’ land to ‘mixed development’ in June 2007.
The Director of Land and Mines has issued a bill for quit rent for 2008-2010 totalling RM6.1 million (less amounts already paid), which works out to about RM2.4 million a year (or RM2.58/sq metre). The Turf Club had previously been paying RM0.5 million a year in quit rent (or RM0.54/sq metre).
The Turf Club wants the old rate to be used, arguing that the land is still being used for horse racing.
The state government, on the other hand, says the Turf Club can afford to pay the new rates – and it definitely has a point. The club has RM48.5 million in fixed deposit, and it generated a surplus before tax of RM3.9 million in 2009.
Incidentally, the Turf Club plans to develop two parcels of its land and has submitted an application to the Penang Island Municipal Council (MPPP) and another to the Land Office. It has plans to build mansions on one end of its property and rent them out to generate even more income.
If the Turf Club still wants to pay quit rent at the old non-commercial rate, then there is a simple solution: Get the land rezoned back to recreational status and all will be fine. Such a move would also secure the area as a green lung for future generations – and there would still be hope for a public park some time down the road. A win-win solution.
The state government should use that as a carrot to get the land rezoned back to recreational status. The MPPP can also use similar considerations when it comes to billing assessment.
Related posts:
Latest: Penang Turf Club: Having cake and eating… http://anilnetto.com/development-issues/penang-turf-club-having-cake-and-eating-it-too/
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Penang Turf Club: Having cake and eating it too http://bit.ly/awar2J
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Tell the Turf Club to get better lawyers, stupid idea that its being used as a race course so no need to pay based on its status. Idiots!
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I remember an old article of yours on this subject. Doesn’t changing the status of the land greatly affect its value? Does the land appear as an asset on the Turf Club’s books somewhere? It doesn’t seem right that you can buy land from the public at a lower price because it has some restrictions placed on its use and then just have the restrictions lifted later at no cost. I would have thought a windfall tax – at the very least – should accompany a value-enhancing reclassification of land.
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Yes, the market value of the land would have shot up overnight as a result of the rezoning. But I am not sure if the Turf Club has done a formal revaluation of the land and incorporated the new valuation in its accounts. If it hasn’t, the land would still appear in its books at a much lower cost or at previous revaluation (if any).
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I think they already have done the re-valuation since they had a deal with that son-in-law of a previous prime minister, remember?
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Son-in-law? Are you referring to Patrick Lim and Equine/Abad Naluri?
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Lol !
Who’s the ‘partner’ to that “Patrick Lim” guy? Khairy la !
I believe — and this is from memory — that when they (and I mean, both the Turf Club and the Patrick Lim guy) inked the deal, they had someone re-valued that piece of land at Scotland Road to like 800 Million or something (can’t be sure the real figure) and the land Patrick Lim gonna secure for the Turf Club at Batu Kawan was valued around 300 Million (again can’t be sure about the real figure) + the construction fee for a new turf club + all other cost including the kitchen sink and they came up with a figure that the Khairy / Patrick Lim pair will pay the Turf Club a lump sum of RM 300 Million as compensation.
Those figures were widely reported in the news media when Badawi came to town to officiate a ribbon cutting event celebrating the launch of that proposed new “carbon neutral building” that they were going to build.
But Anil, if you really want to be sure, you should call up Tan Sri Tan Kok Peng, he should have the figures.
(Somebody) wants to turn the Turf Club into a housing estate.
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Anil, pls keep us all inform about Teoh’s court case. Its paramount that this case should not be treated like another Kugan’s case. Thai’s expert mat not be coming due to ….. pressure? This is INJUSTICE par none!
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Certainly, the Turf Club can afford to pay the RM6.1 million. It is chicken feed to them. If at all they want to pay the old rate, then the land has got to be regazetted, new land values evaluated and pay accordingly. There should be no compromise on the part of the state Government! Any move to negotiate is deem to be corrupt, as it is clear the turf club land had been rezoned before March 2008 for developments worth billions!
Let us see what the present administration is made of, as there are many towkays here!
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I’m all in favour of re-zoning PTC land for horse racing and keeeping the green lung as heritage land forever.
No way should there be a loophole left for turning this land into a concrete jungle a la KLCC and Twin Towesr!
dpp
We are all of 1 race, the Human Race
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Someone else who have had land converted from say agriculture to commercial zone, eg, should have paid a conversion premium. If PTC hadn’t needed to do this earlier or had paid a small premium, it would be a bit fishy?
Else if PTC had already paid a substantial conversion premium, the state government in a future compromise would have to return that amount and reduce the quit rent – which means reduced incentive for compromise from the state’s point of view.
But if the quit rent is not reduced, then there is a real pressure for PTC to go for all-out development. That would be justifiable from the shareholders’ point of view. With commercial zoning, the state would have to agree to reasonable development so as not to infringe of private property rights.
The RM3.9 mil pretax earnings is small, compared to the large RM1.9mil increase (RM2.4-o.5) in quit rent. The new quit rent is definitely a pressure to develop. Resolve this or we lose the green lung.
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Yes, high quit rent could spur the Turf Club to go all out to ‘develop’ the land.
But how to develop when it still needs a racecourse for horse racing? As you pointed out, its surplus is not that high. The longer the state govt stands firm, and if the Turf Club still wants to continue horse racing despite lower attendances at horse-racing than before, it have to apply for re-zoning if it doesn’t want to shoulder the burden of high quit rent and assessment.
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The PTC does not have to honor anything regarding “horse racing”, you know?
As far as the shareholders go, getting (handsome returns) comes first, turning that green lung into a concrete jungle becomes a very tempting idea.
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Anil,
I totally agree with you that if the Penang Turf Club (PTC) has converted the land status to commercial than they should pay the commercial rate. Is the PTC committee pretending to be stupid or they think that the Penang Government and MPPP are stupid?
The Penangites had fought hard against the development of PGCC due to the greed of some of PTC committee members to convert its land for commercial development. If many poorer Penangites still has to pay their annual rates, I do not see why PTC is not willing to pay when they have the money.
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Pg Turf Club conspired with previous BN govt 2rezone land,now stuck with hefty quit rent bill which they refuse to pay. http://bit.ly/9Me0cx
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I converted my residential house to a commercial status.
Upon approval to a commercial status, I had to pay higher rates, such as assessment rates, quit rent, etc. I did not make any noise.
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They should get rid of this turf club and rezone it to public parks. Forcibly take over this land and pay for the takeover instead of building a PICC.
Do you really believe that that is their real income?… What happens to the betting profits… or are they happy with collecting gate fees etc….
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“They should get rid of this turf club and rezone it to public parks.”
You mean Eminent Domain?
Even with ED the government still need to pay Market Price for the land, you know?
And with that piece of land already being rezoned, the price tag has shot up.
Dunno how much that piece of land is worth now, but I wouldn’t be surprised if it’s over RM 600 Million.
Open land on Penang Island is very scarce. The PTC land is the only non-cemetery open land left belong to the private hand in the North East District, and the price for it gonna be very very high.
“Do you really believe that that is their real income?”
Doesn’t matter.
They are a private club, their income is their own private matter, no government can go interfere with it.
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Under Gerakan, this would be easy to settle. Continue to hoodwink the rakyat, and give “special discount” to Turf Club to pay at the old rate and still give them the right of mixed development to developed bungalows. Win-Win for Turf Club, Gerakan-BN government. Losers = Rakyats. The Turf Club must be reminded, you reap what you sow. Now PAY TAX!!!
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….enough is enough…..revert back the PTC to its former glorious status that is the much touted ‘green lung’ of penang in inhabited area……maintained it as a swath(a broad band)of grass, small scrub, plant ornamental trees, indegenious trees like meranti, cengal,Ipoh(poison dart), the ‘cannon ball’ tree(you can see this type of tree in ipoh peoples’ park), berlian and other tall trees that can be sourced locally in malaysia, sabah and sarawak……the island paradise of Penang is already a crowded area for more housing developement, that only enriches a few people concerned, more or less enrich the already very rich people , like you say, a certain man you mentioned by name …..relocated, take back the land of the turf club if possible…….. man like him, whom you mentioned, who (wants to make even) MORE money than they need, before they die, can also ‘relocate/advance’ their entreprenuel… skills in seberang perai……the race course should also go over there (relocate to seberang prai, batu kawan?)to ease the terrible weekend congestion, this CAN be done, because our honourable chief minister, LGE can allocated the land there…….also built a large modern columbrian for the western road cemetry, to reclaim the precious land its cemetry occupies…..when all these problems ARE solved……take a ‘good LOOK’ at how singapore manages to LURE tourists with its magnificent thought up/well planned attractions like their orchid/botanical farm(Raffle’s park?)(i know we have a botanical park at the end of western road, BUT that is already deemed too small!) jurong BIRD park with its impressive tall cascading waterfall(i know we already have a bird park managed by gin ooi in prai, but that is private and not big enough to attract MORE local/foreign tourists) and other gardens….it would be a good idea to incoporate all other parks, like butterfly, fish rearing projects like the breeding of our famous blue/red kelah of our malaysian rivers, herb gardens, cactus parks, orchid park, recreational sites, create a sizeable well maintained zoo depicting ONLY our local both day and nocturnal animals that would be interesting to LURE foreign tourists, hugh well mantained areas for camping renting , ample homestays, large suitable lakes for fishermen’s ‘fly/lure’ fishing, etc., etc….much needed penang dollars could be derived from such projects instead of building up MORE commercial projects, that ultimately created MORE concrete jungle that minimise/exacerbate further our breathing (difficulties) with so many depleted/depleting green lungs, trees, grass that are very much needed to GENERATE oxegen for our lungs to breath……….of course some leaders will say, if we DONT build or sell ‘concrete jungles’ quickly to GENERATE quick income for the Peanang city council, we WILL not get enough money for their yearly budget to run the penang city council……if the building industry is deemed necessary to quickly generate money, the penang authorities and developers could look further into developing ‘undeveloped’ areas, further down pulau balik areas to diverse/spread out already the already ‘bottomed out’ areas in George Town………lastly, like they say, look at the bigger/larger picture/we CANNOT see the forest in the trees?????????????!!!!!!!!!!!!!!p.s. i hope LGE reads this, hopefully he can gain inspiration to solve all his woes……..
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I wonder why the PR government should bring out the argument that PTC have the money to pay the new tax.
Don’t they know that most of PTC land serve a dual purpose, ie. a golf course for its members and a race track.
There is hardly any land left for mixed development as long as the 18 hole golf course stands.
The burden of an increased quit rent will have to be borne by golf section members.
If the state government had rezoned the land from one purpose (recreational) to another (mixed development), then the state is obliged to buy those lands at market rate if the owner (ie. the Turf Club)does not want to develop those lands in their possession according to the intention (ie. for mixed development) of the state.
If this happens, and PTC stands firm, it can bankrupt the state coffer if the land is to be retained a green lung for Penang.
Otherwise, the state will have to rezone the land back to its original status.
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….i forgot to mention….our beloved peanang once used to have a TENGKU ABDUL RAHMAN sea aquarium complex on the way to Bayan Lepas……this COULD also be revived., well planned, to attract more local visitors and tourist to earn the much needed dollar for the Penang City Council…….
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Dear Anil,
You don’t need to publish this if you don’t want to.
Please read the article at the following link:
http://ideas.org.my/2010/04/the-freedom-to-commemorate/
This is a very serious matter, as they (the Muslim fundies) are encroaching into everything, even the way we commemorate our fallen heroes !
I encourage you to link that article to your blog so that many others get to understand what is going on in our country.
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The Pg Turf Club is an exclusive membership club and not everyone can join unless you are rich or influential. Other than members the rest going there are gamblers. So why the preferential treatment for the Club
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