Phuket officials threaten protest over Club Med lease

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Phuket officials threaten protest over Club Med lease
Phuket Gazette


Kamnan Winai threatened that local residents would protest if the PPAO renewed the Club Med lease. Photo: Saran Mitrarat

PHUKET: -- Kata-Karon officials yesterday threatened public protests if the lease for the Club Med resort located on 39 rai of public land along the Kata beachfront is renewed.

The 30-year lease, which began in 1985, will expire on September 24 next year.

“For 30 years we have been waiting for the contract to expire,” said Kamnan Winai Chidchiew, who led a delegation of 10 Kata and Karon officials to file the petition at the Phuket Provincial Administration Organization (PPAO) office yesterday morning.

“We do not want the PPAO to renew the contract for the Holiday Villages (Thailand) Co, Ltd, also known as Club Med Phuket.”

The application to renew the contract must be filed at least 30 days before the contract expires. Holiday Villages (Thailand) has applied to renew the contract, explained PPAO Vice President Chawalit Na Nakorn.

“If you want us to have a public feedback hearing before we make a decision, we can do that,” Mr Chawalit said.

Kamnan Winai argued that the land could be better used for the benefit of residents.

“This land could be a beach zone for tourists and local people. We could build a public park here, or set up an exhibition that would help preserve local culture,” he said.

The lease began on September 25, 1985, and requires Holiday Village (Thailand) to pay rent and donations to the PPAO and Karon Municipality. The rent of 5,982 baht has not changed, but the amount of donations has increased incrementally over the course of the lease.

In 1985, the yearly donation to the PPAO was 650,000 baht and to Karon Municipality 250,000 baht, with an additional 100,000 baht to be used for Kata Beach maintenance. The donation to the PPAO is now three million baht and to the Karon Municipality, 650,000 baht; the cost of Kata Beach maintenance remains at 100,000, Mr Chawalit said.

In the lease, Holiday Village (Thailand) also agreed to finance various public works, including the construction of a road, beachfront sidewalk, two parking lots, public bathrooms and changing rooms, and the purchase and remodeling of a school.

The meeting yesterday to consider the renewal of the contract was postponed, as PPAO President Paiboon Upatising was in Bangkok.

“I will consider the petition and raise your concerns in the meeting. We have to look after the interest of the majority. If they don’t want us to renew the contract, then, for sure, President Paiboon won’t do it.” Mr Chawalit said.

— Saran Mitrarat

Source: http://www.phuketgazette.net/phuket-news/Phuket-officials-threaten-protest-Club-Med-lease/29170#ad-image-0


-- Phuket Gazette 2014-04-18

[Thai at Heart]

Haha.

This will be funny to watch. How to squirm out of this and get paid? Hmmmmm

[ThaidDown]

Cynical translation.....

The thicker brown envelopes have not arrived yet.

[steelepulse]

Kamnam Winai wants a raise and is using this threat to ensure he gets it.

I'd love to see where all of this money goes monthly that Club Med is paying. It certainly isn't going towards keeping the beach clean, ensuring there are enough lifeguards year round etc.

[BigRick]

Kamnan Winai argued that the land could be better used for the benefit of residents" You know like Jet Ski scams,food vending stalls,the chair Mafia,Tuk tuk mafia and the song tao mafia. No one likes the idea of an all inclusive resort in Thailand it does not allow the locals to wet their beaks enough.

[Arjay]

"The lease began on September 25, 1985, and requires Holiday Village (Thailand) to pay rent and donations to the PPAO and Karon Municipality. The rent of 5,982 baht has not changed, but the amount of donations has increased incrementally over the course of the lease". 5,000 baht RENT! Who was the fool sucker that approved that? Even with the 3 million baht donations Club Med has made out like bandits!!!

[LivinginKata]

This will be a good test of what happens at the end of a 30 year lease. I would guess that this must have been one of the earliest 30 year leases on Phuket Island. Must admit I am suprised that Club Med did not buy the land in a Thai Company front. Must have been the best deal they could get on 'public land'.

If a wealthy and connected company like Club Med cannot get a 30 year renewal then the best of luck to anyone holding a 30 year lease with +30 +30 renewals.

[NamKangMan]

This will be a good test of what happens at the end of a 30 year lease. I would guess that this must have been one of the earliest 30 year leases on Phuket Island. Must admit I am suprised that Club Med did not buy the land in a Thai Company front. Must have been the best deal they could get on 'public land'.

If a wealthy and connected company like Club Med cannot get a 30 year renewal then the best of luck to anyone holding a 30 year lease with +30 +30 renewals.

You beat me to it LIK.

All those residential 30 year land leases coming up soon from the Phuket boom time of the 80's. The Thai's are not just going to let people stay on the land for another 30 years, for free.

These people will have to pay again, or walk away.

[Lupatria]

Every business that operates successfully over a period of time is in danger to be eaten by the sharks in the land of greed.

[keestha]

This will be a good test of what happens at the end of a 30 year lease. I would guess that this must have been one of the earliest 30 year leases on Phuket Island. Must admit I am suprised that Club Med did not buy the land in a Thai Company front. Must have been the best deal they could get on 'public land'.

If a wealthy and connected company like Club Med cannot get a 30 year renewal then the best of luck to anyone holding a 30 year lease with +30 +30 renewals.

I always told people not to trust +30 renewal clauses. A binding renewal clause would be illegal since it would be the same as a 60 years lease, and a lease can legally only be max 30 years. The Thai text in the lease will run like if the owner and the tenant agree.

[LivinginKata]

You beat me to it LIK.

All those residential 30 year land leases coming up soon from the Phuket boom time of the 80's. The Thai's are not just going to let people stay on the land for another 30 years, for free.

These people will have to pay again, or walk away.

And pay again at current day rates - 30 years later. I admit that I bought a 30 year lease when I decided to settle here in Phuket, Thailand. I suppose my rational was that was the most secure deal I could make in my own name, and I would be likely be dead in 30 years. I sold the balance of the lease while I could still get a good sale price with 20 years left. That lease is finished in 2022

[Patje]

“This land could be a beach zone for tourists and local people. We could build a public park here, or set up an exhibition that would help preserve local culture,”

​Let him first take a look at all the so called paradise beaches on the island and then reconsider what he wants to do, they want to turn this one also into shit?

[Showbags]

They want to run their own little club mud.

[clockman]

Dont you love the uniforms and medals! Evrybody wants to be special?

[Showbags]

They are all bugged eyed with the possible earn around the corner for them.

Sick people.

Oh...and good luck to all those 30 year leaseholders around the country.

[Loptr]

Cynical translation.....

The thicker brown envelopes have not arrived yet.

Along with kicking Club Med off the property after 30 years of improvements. A good number of Thais are greedy little pricks, especially in Phuket.

[NamKangMan]

You beat me to it LIK.

All those residential 30 year land leases coming up soon from the Phuket boom time of the 80's. The Thai's are not just going to let people stay on the land for another 30 years, for free.

These people will have to pay again, or walk away.

And pay again at current day rates - 30 years later. I admit that I bought a 30 year lease when I decided to settle here in Phuket, Thailand. I suppose my rational was that was the most secure deal I could make in my own name, and I would be likely be dead in 30 years. I sold the balance of the lease while I could still get a good sale price with 20 years left. That lease is finished in 2022

Yes, correct. On many occasions, people are paying for bricks and mortar on a deminishing 30 year land leases, just because it says "+30" which is not enforcable under Thai Law.

They are going to get screwed big time.

Effectively, you are only renting the place for 30 years anyway, so why not just rent anyway and not have to pay for repairs, maintanence, fees, taxes etc etc, and your capital can stay in your home country, making money, not losing money on a depreciating asset and a deminishing land lease.

[Loptr]

You beat me to it LIK.

All those residential 30 year land leases coming up soon from the Phuket boom time of the 80's. The Thai's are not just going to let people stay on the land for another 30 years, for free.

These people will have to pay again, or walk away.

And pay again at current day rates - 30 years later. I admit that I bought a 30 year lease when I decided to settle here in Phuket, Thailand. I suppose my rational was that was the most secure deal I could make in my own name, and I would be likely be dead in 30 years. I sold the balance of the lease while I could still get a good sale price with 20 years left. That lease is finished in 2022

Yes, correct. On many occasions, people are paying for bricks and mortar on a deminishing 30 year land leases, just because it says "+30" which is not enforcable under Thai Law.

They are going to get screwed big time.

Effectively, you are only renting the place for 30 years anyway, so why not just rent anyway and not have to pay for repairs, maintanence, fees, taxes etc etc, and your capital can stay in your home country, making money, not losing money on a depreciating asset and a deminishing land lease.

Exactly, although I suspect that many land / home purchases have something to do with a Thai lady, marriage, children, etc. IMHO, renting is the only logical approach to living in Thailand or anywhere for that matter. Less risk, less headaches, less capital tied up and more enjoyment.

[Pomthai]

Can they demolish everything they put there over the last 30 years? Ya know, really and completely put it back to what it was?

[madmitch]

Have I missed something? I can't see anything in the article stating that the original lease is a 30+30, it just states that the lease is due to expire next year. Please correct me if I am wrong.

More importantly, if Club Med have to renegotiate and pay anything like the going rate for that tract of land, then it would not be viable to run the resort there.

I hate to think what will replace it but I doubt it would be the Kamnan's idea of a public park. The rent collectible from hotels, restaurants, stores etc, in that location would be astronomical, as would the amounts payable in brown envelopes.

IMHO, Club Med remaining would be the best option if Kata Beach is to avoid becoming a total eyesore. But I really don't think that'll happen.

[LivinginKata]

Can they demolish everything they put there over the last 30 years? Ya know, really and completely put it back to what it was?

Club Med are only leasing the land. I would have no doubt that they could remove all the buidings, might even be part of the lease agreement. Surprisingly they built a complete new major building just last year at the north end of the vast property.

[Showbags]

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Can they demolish everything they put there over the last 30 years? Ya know, really and completely put it back to what it was?

That would cost money....and then leave them with a nice blank canvas to sell/rent.

Best to burn it all to the ground and leave a big shIt pile of a mess for the greedy pigs to get their noses into.

[LivinginKata]

Have I missed something? I can't see anything in the article stating that the original lease is a 30+30, it just states that the lease is due to expire next year. Please correct me if I am wrong.

No details that the lease was even +30 +30. By all accounts this is public land and 30 would have been the most. And anyway this + + is not recognised by the land office. It's a civil contract.

More importantly, if Club Med have to renegotiate and pay anything like the going rate for that tract of land, then it would not be viable to run the resort there.

Exactly correct. It's a large tract of beach front prime property. Exends well beyong the actual Club Med boundary. Lot of land on the other side of the main road, and all the land to the end of the beach at the north end. The commercial value is enormous.

I hate to think what will replace it but I doubt it would be the Kamnan's idea of a public park. The rent collectible from hotels, restaurants, stores etc, in that location would be astronomical, as would the amounts payable in brown envelopes.

Public park my ****. I have no doubt plots of land will be leased off to build large resorts, and for vast sums of money. I suspect all this noise is to maximise the maximum money extraction from Club Med for the so called public good. The local officials will live high on the hog for the rest of their lives.

IMHO, Club Med remaining would be the best option if Kata Beach is to avoid becoming a total eyesore. But I really don't think that'll happen.

Agreed

[NamKangMan]

Have I missed something? I can't see anything in the article stating that the original lease is a 30+30, it just states that the lease is due to expire next year. Please correct me if I am wrong.

More importantly, if Club Med have to renegotiate and pay anything like the going rate for that tract of land, then it would not be viable to run the resort there.

I hate to think what will replace it but I doubt it would be the Kamnan's idea of a public park. The rent collectible from hotels, restaurants, stores etc, in that location would be astronomical, as would the amounts payable in brown envelopes.

IMHO, Club Med remaining would be the best option if Kata Beach is to avoid becoming a total eyesore. But I really don't think that'll happen.

A big company like Club Med would know the "+30" clause is unenforceable under Thai law, so probably never bothered with it.

The article says their 30 year lease is up soon and the "hands" are already out for more money to allow them another lease, or to force them to walk away.

Either way, Club Med will be assessing the viability of remaining at that location, and given the current economic climate on Phuket, the margins are going to be tight.

[JoeThePoster]

They want to run their own little club mud.

Or the homegrown version - Club Mad.

[NamKangMan]

There could also be a lot of Thai staff out of a job. That place would employ a lot of people.

Also, the flow-on effect to suppliers etc etc.

Edited April 18, 2014 by NamKangMan

[NomadJoe]

If Club Med doesn't get the lease, Kata will turn into a little Patong. All the east-west roads will be extended to the beach and the 4-5 story shop houses will tower above the Club Meds current location. it will be the end of the last bit of parking available near a west coast beach. At present most of Kata beach is quite nice, quiet and clean. Much of the natural coastline dune with pines and ivy is still there. A perfect place to string up a hammock and enjoy the beach,swaying in the shade and breeze. It's the only place I know of like that here. We say goodbye to it if Club Med goes.

[belg]

thainess : lease the land,build stuff on it and after 30 years, we take it all from you, and you can leave and make us rich

what is up with the donation, soft corruption ?

[schondie]

Kamnan Winai argued that the land could be better used for the benefit of residents himself.

“This land could be a beach zone for tourists and local people. We could build a public park here, or set up an exhibition that would help preserve local culture,” he said.

Perhaps I'm too cynical but I wouldn't be surprised if the good hearted Kamnan hasn't already agreed a deal with another property developer.

[madmitch]

Kamnan Winai argued that the land could be better used for the benefit of residents himself.

“This land could be a beach zone for tourists and local people. We could build a public park here, or set up an exhibition that would help preserve local culture,” he said.

Perhaps I'm too cynical but I wouldn't be surprised if the good hearted Kamnan hasn't already agreed a deal with another property developer.

The land is administered by the OrBorJor and therefore the Kamnan cannot do anything like you have suggested.

However, I would guess that the Kamnan and cohorts are protecting their potential interests here. If that land is to be developed they will want their slice of the pie. I'm sure Kamnan Winai knows a good parkland developer!