The cost of compensation for the former owners of the Grand Palace Chinese restaurant on the Esplanade has risen to $7.25 million – and the matter still isn’t settled.
Planning Minister John Day told State Parliament that Wang Nominees, the family company of restaurateurs Fai and Wenny Wang, had recently received a further $2.245 million interim payment on top of the $5 million payment it received from the Government last year.
The payments have flowed after a compensation claim from the Wangs, who had a long term lease over the Florence Hummerston building, which was closed to make way for Elizabeth Quay.
“To the best of my knowledge, negotiations have not yet been concluded,” Mr Day said in response to a question from Labor’s Margaret Quirk.
“A final valuation of the lessee’s business was completed in 2013. A settlement offer was made to the lessees in December. They rejected the settlement offer … however, accepted the amount offered as an advance payment, being $2.245 million – which brings total payments to date to $7.24 million.
“Negotiations are continuing and if necessary, they will be taken to the Supreme Court.
“In fact it may be that proceedings have already commenced in the Supreme Court for a resolution of the issue, which is the usual process when agreement can’t be reached.”
Mr Day refused to detail the size of the offer that was rejected on the basis negotiations were still underway.
“What I do recall is that what was being claimed by the lessees – at least in the early part of the negotiations going back a year or two – was far, far higher than what has been paid at this stage,” he said.
Ms Quirk said the Government was “so hell bent on their pet project” that it failed to assess its full commercial exposure.
“It’s the taxpayer that’s footing the bill,” she said.
The Wangs signed a 10-year lease with three 10-year options with the City of Perth in 2004, which owned the building until it relinquished the land to the Government for Elizabeth Quay.
The lease contained no break provisions and the Wangs had an exclusive option to exercise each of the 10-year options that would take its tenancy through to 2044.
City of Perth records show the council contributed $200,000 in 2003 to a renovation that reportedly cost more than $1 million, with the balance met by the Wangs. The Wangs initially paid $32,760 a year in rent to the council but that had risen to $40,555 a year by 2011.