CITY LEASES.

Dominion, Volume 8, Issue 2401, 5 March 1915, Page 6

CITY LEASES.

VIEWS OF MR. C. P. SKERRETT,

Items on the _ supplementary order paper at last night's meeting of tho Wellington City Council included a letter from Mr. C. P. Skerrett, KC., in reply to the report on city leases by. Mr. C. B. Morison, K.C., who represented the City Corporation in the recent arbitration cases dealing with the Lambton and reclamation leases. Mr. Skerrett's reply was a very' lengthy one, covering more than sis sheets of typewritten foolscap. After, traversing tno arguments in the report, Mr. Skerrett' said: "It is plain that Mr. Morison adheres to the idea that the best method of determining the amount of rental is to take a percentage of from 4 to 4j per cent, upon the freehold value of the land. This is neither a fair way of determining the rental, nor the way in which the Court of Appeal has said the rent was to. he ascertained. _ Such a way takes no account of. the disadvantages of the lease, and the percentage is taken upon a value of the freehold ascertained quite empirically. Moreover, the arbitrators had evidence of leases, fixed by mutual consent with the corporation, that only yield 3} per cent, and 3 1-5 per cent, on the freehold value; and in one case the lease is for 21 years, with 21 years right of renewal, instead of the. usual 14 years period. In a recent a-ward determining the rent for another property, the corporation expressed their satisfaction at the decision of the arbitrator, although the rent yielded only 3.6 per cent, of the freehold value. It is clear that the price which isolated companies or individuals are willing to give for a piece of freehold land bears no relation to the leasing value of similar land in the same locality. It is notorious that extremely high prices have "been obtained in particular cases for freehold property, because the purchaser specially desired to acquire a freehold in that particular part of the city, and as there were only one or two freehold sections available almost any price demanded at that time could have been obtained." Mr. Skerrett then went on to refer to the case of the T. and G. Mutual Insurance Company, whose lease from the corporation was considered by the company to be such an unsatisfactory one that it was deemed not advisable to continue it, notwithstanding the fact that a valuable building stood on the land, and had to be forfeited bv the company. There were, Mr. Skerrett contended, difficulties m connection with the leases ofFered by the corporation, because of certain conditions, and, as long as these conditions were persisted in, they would depreciate the freehold value.