Sandton City disputes claims that it owes City of Joburg R158m

Management at one of SA’s largest super-regional malls, Sandton City, have refuted the City of Joburg’s (CoJ) claims that the centre owes the city R158 million in unpaid rates and taxes, saying that its accounts are all up to date.

This comes after the centre, which is jointly owned by insurance giant Liberty Holdings, listed property counter Liberty Two Degrees and private property group Pareto, was served with a ‘pre-termination notice’ of services from CoJ at the weekend.

Sandton City’s management, however, noted in a statement to Moneyweb that it has a dispute regarding its property rates valuation with the city.

“The owners of Sandton City are aware of the social media comments relating to the drive embarked on by the City of Johannesburg to terminate services to properties that are in any arrears,” the statement reads.

“Sandton City’s municipal accounts are all up to date except that there is currently a dispute with the City of Johannesburg regarding the rates and taxes for the centre,” it adds.

The shopping mall which hosts luxury stores like Cartier, Louis Vuitton and Versace, says that it is currently engaged in talks with CoJ to determine the correct value of the centre’s rates.

“Sandton City and the City of Johannesburg  have agreed to holdover legal proceedings instituted by the City of Johannesburg in respect of  outstanding rates and taxes pending the finalisation of the Valuation Appeal Board hearing to determine the correct valuation of Sandton City for rates purposes,” centre management points out it the statement.

According to CoJ, out of the R38 billion in unpaid municipal rates, taxes and levies owed to the city by residents, businesses and government departments, Sandton City’s municipal bill represents the largest amount.

CoJ mayoral spokesperson Mabine Seabe confirmed to Moneyweb that the city issued the centre with a pre-termination notice on Saturday (February 12), which allows Sandton City two weeks to dispute its debt or alternatively, make payment arrangements.

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“Last week Saturday they [Sandton City] would have received a pre-termination notice and the pre-termination notice has a period of 14 days and within that 14 days [Sandton City] has an opportunity to dispute the amount that the city is requesting or make a payment arrangement,” he explained.

Seabe also confirmed that the city has begun engagements with the centre to resolve the dispute.

CoJ’s operation #BuyaMthetho

The CoJ announced its debt collection campaign called operation Buya Mthetho (which loosely translated means restoring the rule of law) on Friday February 4, 2022.

The operation according to the city is focused on “aggressively collecting monies owed to the city by government at all levels, residents, and businesses.”

On Wednesday, the city tackled delinquent ratepayers in Sandton and its surrounding areas.

9 buildings will be visited today in the City’s efforts to recover some of the biggest municipal debts. There’s over R38b in municipal debt that is owed to the City, the biggest debt belonging to Sandton City of R158m #BuyaMthetho #IcareIpay #JoburgCares ^NJ pic.twitter.com/Tybum5Q35X

— City of Joburg (@CityofJoburgZA) February 16, 2022

According to CoJ, poor payment behaviour by its ratepayers is partly to blame for some of the city’s service delivery issues.  The decision to embark on this ‘name and shame’ campaign was thus fuelled by the city’s need for funding to effectively, fix its ‘broken’ parts.

“The City of Johannesburg makes no apologies for wanting to build a city that is among other things well-run, safe, and business-friendly,” executive mayor Mpho Phalatse said in statement.

“But the reality is that doing so costs money, even if the best people are elected or appointed to do so.”

Phalatse added that CoJ’s agencies like Joburg Water, City Power and Pikitup need more money, adding that to fix service delivery issues like potholes, it needs its ratepayers to pay up.

Read: Why Joburg’s roads are in such a state

“To put this in context, residents, business, and government owe the city around R38 billion in unpaid municipal rates, taxes, and levies, which is just over half of the 2021/22 budget that comes in at over R73billion,” Phalatse said.

“So, when I ask you to imagine a city that delivers, works, is safe and offers great opportunities, I am asking you to imagine what is judiciously possible.”

CoJ says it still remains unclear how much of the outstanding debt has been settled by ratepayers post Wednesday’s debt collection drive, adding that this remains an ongoing operation for the city.

“I’m unable at this point to [indicate] how much of that [debt] has been settled since yesterday. This is an ongoing operation and of course, as time goes, only then will we be able to reconcile our accounts and be able to give an update as to how much has been settled,” Seabe told Moneyweb.

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