The redevelopment of the historic White Building has hit a stumbling block after residents refused to accept the level of compensation offered in exchange for moving out.
Almost 90 percent of the 493 families living in the building have agreed to leave and are asking for between $2,000 and $2,200 per square meter to give up their properties.
But Japanese investors Arakawa and the Land Management Ministry are offering only $1,263 per square meter.
Land Minister Chea Sophara said residents are demanding to be paid above market rates for their property, which theINVESTMENT FIRM cannot afford.
He said it will already cost investors $21 million to pay compensation of $1,200 per square meter, a figure that was based on a property company evaluation of the White Building.
“If we negotiate with the investment company, the compensation will probably increase by $100 at most,” he said, adding that officials will do their best to get a higher rate for residents.
The issue was discussed on Friday at the third meeting between ministry officials and 400 people representing the residents of the building.
The ministry said 88 percent of residents have agreed in principle to leave, while the rest want to take on-site development instead of compensation.
White Building resident Chey Reaksmey, 61, said the compensation being offered is unacceptable, since she would not be able to afford to buy another house in the city or the suburbs.
“I would be happy to leave to allow for the government development,” she said. “But not if the price is inappropriate.
“I would like to thank Mr. Sophara for helping us so far, but we have asked for $ 2,200 per square meter. If it’s $1,263, we will not leave.”
During the meeting, the minister also took the opportunity to remind residents about upcoming commune elections and urged them to vote for the ruling CPP in order to help find a solution to their situation.
Sia Phearum, the executive director of the Housing Rights Task Force, said it will take time to negotiate the compensation price, but welcomed the fact that both parties were willing to work together.
He said: “Buyers always want a cheaper price and sellers always ask for more. There must be a negotiation and time to seek a consensus that it acceptable for everyone.
“We support the discussion process to find a solution together. We need a win-win outcome to ensure the development is sustainable.”
According to the Land Ministry website, the White Building development will cost $70-$80 million, including temporary accommodation for residents.
They plan to make the building 21 floors, with three floors of parking, one floor for stores and five floors for accommodation – which they claim will be 10 percent larger.
The investors Arakawa will own everything from the ninth floor up and it is unclear what they plan to put there.