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Property owner defends $37m NIB real estate deal
The owner of the Apsara Restaurant, located around the Queen’s Park Savannah, says in the past three years the National Insurance Board has earned over $4 M in rent from the property which it acquired at a cost of $37m in 2014.
And he believes that someone at the NIB should be investigated for allegedly defrauding the Board of Inland Revenue after a valuation for stamp duty put the property valued at $33 M at a mere $16m.
Questions about the price paid by the NIB for the building were raised in Parliament in December by Health Minister Terrence Deyalsingh when trade unions and the Employers’ Consultative Association appeared before a Joint Select Committee of Parliament to discuss the NIB’s ninth actuarial report.
Deyalsingh said an independent valuation of the building $16.5 M, “but NIB paid the owners $37 M, so they overpaid for the properties by $20.5 M.”
The restaurants are owned by Sharif Mohammed and Marie Kavanagh who pay a $96,000 monthly lease for the property.
Mohammed told the T&T Guardian that the $96,000 rental fee is until 2018, “and then there is a 30 per cent increase for another six years bringing the rent to $125,000 a month.”
He defended the $37 M paid for the building by the NIB. He said an evaluation of the building done in the middle of 2013 by “a reputable international surveyor valued the property at almost $33 M.”
He said in the course of negotiations for the NIB to purchase the building he submitted a proposal to the NIB that he intended to spend between $10 and $15 M to improve and upgrade the property. That deal, he said, was closed in “April 2014.”
Mohammed said NIB had a “quantity surveyor each week to evaluate the work I was doing. The $5 M was spent, but I spent $15 M more on the property and it is there to be seen.”
Asked where the $16m valuation came in, Mohammed said: “This is what was spread by politicians so it looked as though I got an extra $20 M for a property that only worth $16 M.”
But he admitted that a valuation was done in 2014 “in the middle of renovations,” which valued the property at $16.5.
Asked about the huge discrepancy between that valuation and the $33 M which he had gotten from an independent surveyor, Mohammed said in July 2014 the NIB “sent a valuator to value the property and when I asked the valuator why it is she was evaluating the property because the deal was closed and I had already been paid, she said it was for stamp duty purposes.
“I understand the land alone was valued and not the property itself. So they came up with a valuation for stamp duty for $16.5 M and ignored the total value of the property which was $33 M.”
NIB officials could not be reached to comment on the claims.
When asked about it in Parliament the representative from the ECA Keston Nancoo said while the NIB had a balance of three representatives from employers, government and trade unions, the Government held the chair.”
Mohammed described it as one of the best deals the NIB had made because they were getting a return on their investment.
“They have received $4 million in rent and with appreciation, the property is now worth $50 M,” he said.
“They spent $37 M and got $4 M in rent to date and it’s going to increase in 2018 so who got the better deal?” he asked.