The V&A Waterfront has been criticised for demanding a substantial slice of the sale price of the Hildebrand Restaurant.
It told Enrico Girolo, son of the former Hildebrand owners Aldo and Linda Girolo, that if they did not pay up, it would refuse to sign a lease with the new tenant.
Girolo said the Waterfront had been paid more than half a million rand for signing a lease with the new tenants. He declined to say what percentage of the sale price the R570 000 was, but said it was in double figures.
Girolo has written an open letter to Waterfront shareholders and owners describing what had happened and expressing his deep dissatisfaction at the terms.
In it he says: “The V&A Waterfront, through good times and bad, have always taken their pound of flesh in the form of market-leading rentals, percentage turnover rentals as well as contributions to marketing and operating costs.”
But he said the “key money” payment demanded was something his parents and other tenants had never heard of. “If this ‘key money’ payment is indeed an established commercial policy, surely at the very least the V&A would alert its tenants to the new policy, so that they would have ample time to consider the implications.”
He accused the Waterfront of taking advantage of his elderly parents.
Girolo writes: “The V&A said they would only inform my parents of the exact amount they wanted once they had the signed sale agreement in place. So my parents had to conclude the sale agreement, and then go and show the V&A Waterfront the sale agreement (which has nothing to do with the landlord, as they should only be concerned with the new lease and ability of the new tenant to carry on the business) and allow them to apply the price that most suited them.
“This was not a fixed fee or justified amount, this was a case of ‘let me see what you are getting and I will decide what I am entitled to’.”
He said all attempts to meet the shareholders and negotiate the terms were refused and all counter-offers were rejected. “It was a take it or leave it scenario.”
Girolo said the forced payment was not a term of business agreed upon by them 14 years ago.
His parents had paid more than R18.4m in rental over the years and had added permanent improvements to the heritage building without any financial assistance or rental rebate.
The Hildebrand Restaurant, one of Cape Town’s oldest restaurants, moved from the corner of Strand and St George’s streets to the Waterfront in 1995 and took over the old Harbour Cafe building and Harbour’s Edge.
Tourism group Tourvest, which also manages Quay Four in the Waterfront, is the new owner and took over in April.
Girolo said his father, who was 72, and his mother, 62, had wanted to sell the restaurant when the lease still had two years to run as they no longer wanted to work six days a week, 12 hours a day and public holidays.
They employed 80 permanent staff, some of whom had been with Hildebrand Restaurant for 40 years.
“It was a family-run business and we had a strong emotional connection to the staff.”
Yesterday when staff spotted his parents outside the restaurant they waved and a woman came running over to greet them.
Aldo Girolo said it was difficult to understand the V&A Waterfront’s actions. His wife said at least they had left behind a legacy and a loyal clientele.
Girolo said that his parents had written off the payment.
“We just hope other tenants might be alerted to this practice.”
Waterfront spokeswoman Emma King said: “We would never release confidential commercial information about any tenant to a third party. What we can say is that we reached an open, arm’s length agreement, mutually negotiated between the two parties over 12 months ago and in good faith.”
King said the Waterfront confirmed that Girolo had no right of renewal but given his longevity at the Waterfront had decided to assist him. - Sunday Argus