A little more than a year after the cash-strapped Amathole District Municipality (ADM) vacated its lavish Chiselhurst, East London, head offices because of affordability issues, it is back in the market searching for new premises to lease.
The Chiselhurst premises were rented for R36m a year.
The ailing district municipality, after seeing through its previous lease agreement in February 2023, had promised to return to its old offices at East London’s Cambridge and Caxton streets to save costs.
But that was not to be, even though at the time mayor Anele Ntsangani had revealed that they were planning to renovate their old buildings in the East London CBD to the tune of R30m.
After vacating the Chiselhurst offices they had occupied since 2014 at a rental of R4m, ADM officials and councillors moved to another rented building in Quigney, where they are paying R867 000 a month rent, while renovation plans were said to be ongoing at their old offices.
However, ADM is now again searching for 8,000 to 10,000 square metre offices to rent in East London, excluding parking space, for its 429 employees and councillors based at head office, for the next three years.
These include 408 officials, seven full-time councillors and 14 employees from the district’s development agency, Aspire, according to a bid document on its website.
ADM has a total staff complement of 1,400 employees and 47 councillors, but not all are based at head office in East London.
This is despite the district having been warned by MPs early in 2023 not to rent exorbitant office space, saying this “will continue eating up your meagre coffers”.
The struggling district authority had at some point struggled to pay staff salaries and other benefits, but had managed a rental fee of R3m a month, or more than R820m between 2014 and 2023 for their Chiselhurst offices.
Municipal spokesperson Sisa Msiwa on Wednesday confirmed that ADM was again on the lookout for new office space, saying they were planning to occupy such space by February 2025, when the lease with their current landlord in Quigney expired.
ADM this week placed an advert in newspapers calling for bidders who can provide them with office space to avail themselves.
Asked why they were now looking for new offices while they still occupied those in Quigney, Msiwa said: “It’s a standard and proactive stance for the municipality to seek accommodation ahead of the current contract expiring in February 2025.
“The municipality sought new accommodation, meanwhile, plans were afoot to renovate the Cambridge Street building.
“Council, however, later resolved to hand over the building to its economic development agency, Aspire, to take over.”
Msiwa confirmed that the struggling municipality was had previously been paying rental of between R4m and R4.2m for their Chiselhurst offices.
Early in 2023, it was reported that long-term plans for ADM to construct its own headquarters in either Chintsa or Stutterheim to avoid continuing having to pay millions in rent, seem to have fallen flat.
In May 2021, the district municipality announced it was relocating to the scenic Great Kei coastal hamlet of Chintsa, 30km from East London.
At the time, the municipality said land had already been identified in Chintsa.
That announcement had major implications for ADM staff and followed then finance minister Tito Mboweni’s call to officials to save money.
Mboweni at the time said the municipality’s financial challenges were “largely self-inflicted”, including the offices it could not afford.
In 2015, ADM had been expected to finally move to new headquarters in Stutterheim after the council instructed then municipal manager Chris Magwangqana to approach the National Treasury for funds.
A council report tabled on July 22 2015 indicated that the municipality had to move not only because its current offices were outside its geographical jurisdiction, but also because many of its rented offices were scattered among different buildings.
However, while addressing the national parliament in February 2023, Ntsangani said the municipality could not afford to build new offices.
Though Ntsangani at the time shot down council proposals to relocate to Chintsa, he said there were still plans to move ADM’s headquarters to one of its local municipalities at some stage.
“But the challenge now is that we need to raise sufficient funds before we can construct our own building.
“We just cannot take a loan to build — we want to save and use our own money,” he said at the time.
Msiwa said this week that the long-standing resolution by the council on acquisition of land for permanent office development in one of its local municipalities, Great Kei, “still remains”.
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