Arrangements to Apply for Increased Space Contribution Payments – 620
MARKET CIRCULAR NO: 620
Date: 29 July 2014
TO: All Market Tenants
ARRANGEMENTS TO APPLY FOR INCREASED SPACE CONTRIBUTION PAYMENTS
The Minister for Major Projects has recently reviewed the Increased Space Contribution arrangements, bearing in mind the costs of relocation to Epping being borne by store holders in store fit-out and warehousing.
Under the current arrangements, store holders who have entered into Agreements for Lease for a store at the Epping market which is larger than their existing store at Footscray Road have an obligation to pay an increased space contribution to the Melbourne Market Authority (MMA) if they seek to transfer or assign their Agreements for Lease or Lease. The increased space contribution is
a payment of $3,000 per square metre of additional internal store space at Epping beyond a store holders Footscray Road internal store space (Increased Space Contribution).
The current arrangements mean that the Increased Space Contribution must be paid by the store holder named in the Agreement for Lease and Lease and cannot be passed on to any assignee or transferee.
The new arrangements approved by the Minister give the MMA discretion in deciding:
- whether to approve the Increased Space Contribution being paid by the incoming store holder of an Epping lease (rather than the outgoing store holder as is currently required); and
- where the MMA has exercised its discretion to allow the Increased Space
Contribution to be paid by the incoming store holder, the MMA may, in its discretion, and on the request of the incoming store holder, grant a limited period of time depending on each parties circumstances over which the Increased Space Contribution can be made.
The MMA cannot waive any Increased Space Contribution which becomes payable (other than as each Agreement for Lease and Lease already provides).
The MMA is required to continue to report to the Department of State Development, Business and Innovation on all Increased Space Contribution liabilities which arise as part of its annual reporting obligations.