The 20-year lease for one of Fish Hoek’s tourism landmarks, The Galley restaurant, will be up for grabs by the highest bidder later this month.
It’s one of several properties and property leases across the metro that the City is advertising for auction. The other affected property in the far south is a small office on Jubilee Square.
The lease on the beachfront attraction, which has previously gone out to tender, will go under the auctioneer’s gavel on Thursday November 23.
The news came as a blow to Herbie and Mathea Eichel, who have run the restaurant since December 1987.
The couple took over the 20-year lease from the previous leaseholder under the old Fish Hoek Municipality, and the lease as it stands today was signed with the City of Cape Town in 1997. That lease expired in 2016, and since then it has been extended on a month-to-month basis.
In 2018, the City published a notice for public participation for the proposed closure and lease of the restaurants and said there would be a competitive tender process.
The City also said there was no renewal option for the current lease (“Lease dispute at Galley,” Echo May, 2018).
Ms Eichel said she had first heard about the auction on Thursday October 19, when the City’s property manager had called her to ask if he could do a property evaluation.
“I had no idea what was going on. Our lease agreement stipulated that it will be renewed via a tender process so I was expecting one and have not had any communication from the City since we have been renting on a month-to-month basis.”
The property manager had sent her an email which she had forwarded to her lawyer.
City spokesman Luthando Tyhalibongo said: “Auctions are a competitive way of disposing of land and or awarding significant rights without fear nor favour, while ensuring the best use of this public facility.”
Municipal regulations required leases to be awarded in a competitive way, such as through tender or public auction, he said.
“In a tender process, bidders submit written proposals, and the City selects the highest scoring acceptable bid while an auction involves competitive bidding among multiple bidders who submit bids on the day, and the highest bid wins.”
He did not respond to a question about whether the new lessee would be allowed to open a commercial franchise on the property.
Ms Eichel said the City refused to renew their lease and she asked why it had not gone out to tender before or after Covid.
“I did not hear from the City, and now that the tourists have returned, boom, they want to pull the carpet out from under our feet.”
She said she and her husband had spent R30 million over the years to develop the parking area, beach and public toilets and had also planted palm trees to give the restaurant a “beach feel”.
They had spent R1.5 million in 2017 to renovate the restaurant because they were responsible for maintaining the building in terms of their lease, she said, adding that following a 2019 visit by the City’s health inspector, who had threatened to close the kitchen if cracked tiles were not replaced, they had retiled the entire kitchen, and all the tiled floors, replaced the roof and fitted all the windows with safety glass.
“No tenant will do this if they don’t own the building. We did so much more than what they asked for, and it just feels like the efforts we make are not recognised.”
She said they would participate in the auction, but the lease would ultimately go to the highest bidder.
She said Covid had been a “very difficult time” for them and they had been ready to “throw in the towel” in January 2021.
Mr Eichel, she said, had cashed out his pension money to pay rent, salaries, and the staff’s pension during Covid as the City had refused to lower their rent at the time.
“We paid all our staff a small salary throughout Covid and continued to pay their pensions. We have not recovered from that, and the restaurant has not made any profit since then. We break even every month.”
The restaurant’s prices had not gone up in the past year as they wanted to stay affordable for the community, she said.
Ms Eichel said there were rumours that they had asked for exclusive trade on the beachfront, but those were untrue.
“We have been told by the City that the informal trading spaces have been leased, but we never see anyone trading from there, and, instead, it is communicated that we don’t want any other traders on the beach. In fact, we will welcome more traders as we cannot serve 500 people on a busy day.”
In Simon’s Town, a 50m² office next to Fran’s Restaurant will also be on auction. It was previously used as a curio shop and has been empty for five years.
Fran’s Restaurant owner Francis Phalane said she had been awarded the tender for the space in 2022 and had waited more than a year for paperwork from the City, which had sent a lease agreement, for R6800 rental, in March.
However, Ms Phalane said the City had told her that the document was a preliminary one outlining the terms of the agreement and was not meant for her to sign.
She said that when she had not received the keys on the stipulated date, she had enquired again, and a lease agreement, which had now changed to R10 000 a month excluding VAT, had been sent to her.
She said she had declined the offer as it was too much to pay for such a small space.