The Lagos State Government on Wednesday terminated the concession agreement for the redevelopment of Falomo Shopping Centre in Ikoyi, stating that the agreement was detrimental to the interest of its residents.
The state government added that one of its agencies, the Lagos State Development and Property Corporation (LSDPC), entered into the agreement in July 2013 to redevelop the shopping centre with Afriland Properties Plc, a member of Heirs Holdings Group founded by Mr. Tony Elumelu.
The state governor, Mr. Akinwunmi Ambode, disclosed the decision in a statement to terminate the concession agreement with Afriland Properties Plc with a portfolio size of over N10 billion.
Giving a reason for terminating the concession, the Lagos governor cited the terms and conditions of the agreement, stating that they “are grossly detrimental to the interest of the people of the state”.
The governor also said the concession agreement with Afriland Properties Plc (concessionaire) was carried out in a hurry without taking cognisance of its costs and benefits to the interest of the people of the state.
The governor said only N50 million was paid by the concessionaire for a 50-year lease of the property belonging to the state government.
He explained that the state government as custodian of the interests of Lagos residents “is committed to the restructuring of LSDPC to ensure it begins to provide positive capital returns to the state government for the ultimate benefit of the people”.
When the contract for the redevelopment of the shopping centre was signed, Heirs Holdings and LSDPC said the new development would boast a state-of-the-art shopping mall, an office complex and luxury residential apartments. But no completion date was given for the project.
The old Falomo Shopping Centre was built by LSDPC in the 1970s and included a 10-storey building, which currently serves as the headquarters of MTN Nigeria, and an adjourning uncompleted building behind the complex.
However, the complex, due to poor facility management, lost most of its upscale tenants over the years, leaving behind only two original tenants – Quintessence, an art shop, and Glendora bookshop. Both shops eventually moved out when the concession agreement was signed in 2013.
Ambode, two months ago, relieved the former Managing Director of the LSDPC, Mr. Biodun Oki, of his appointment and appointed Mr. Jacob Agosu as the acting CEO of the corporation.
He said, the new appointment was meant to stem the tide of negative capital returns of the corporation.
Source: This Day