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Restaurant owing millions still trading

Restaurant owing millions still trading
The lease with the municipality ended on December 31, which is when this chain went up at Senza. Despite this, the chain came down again after owners obtained a court interdict and trading started only days later. Photo: Mark Taylor
KNYSNA NEWS - Years after a Knysna restaurant – arguably occupying one of the best locations as it is perched right on the edge of the Knysna Heads – has owed the Knysna municipality what must be close to R5-million now, it is still open despite an expired lease and numerous court cases.
The issue of Senza Restaurant, previously called Cornuti Ristorante, has been dragged through numerous council meetings over the years, it has gone before several municipal managers, the previous mayor Georlene Wolmarans has been involved, a summons was issued in 2013, and yet the restaurant remains open while owing millions in outstanding rental, electricity, water, rates and other services.
This is almost an impossible story to write because no sooner has a decision been made by council to close it down and the phoenix that is Senza rises again –despite the measures taken against it.
Electricity cut off
Most recently on December 16, in peak holiday season, the municipality cut the electricity off since Senza has an outstanding bill of R200 000. The very next day, one of the partners paid R20 000, prepaid electricity was installed, but the outstanding electricity bill was not settled.
When the municipality announced that on December 31 the Senza lease expired and that it would not be renewed, ratepayers who over the years have been irate about the fact that this restaurant can get away with not paying its bills since 2008, expressed great relief that the saga would finally end.
Expired lease fails
But no sooner had the chains been put across the door on December 31, than two days later staff were back in the restaurant, which was up and running again.
A manager told a Knysna-Plett Herald photographer that a court interdict had been won by the owners, which allowed them to operate again.
When the Knysna acting municipal manager Johnny Douglas was asked to comment on this very latest development he said, "Owners of Senza Restaurant have been granted a court interdict to have the water and electricity reconnected to the premises leased from the Knysna municipality.
The lease came to an end at the end of December 2016 and was not renewed. A legal process is under way and therefore no further information can be divulged.
"The matter goes to court on January 27, 2017. The Knysna municipality has taken steps against prominent seaside restaurant Senza in an effort to recover outstanding money by disconnecting its electricity recently," Douglas said.
Prior to this comment, when the Knysna-Plett Herald asked for confirmation that the lease would be ended, the municipality had issued the following statement: "The lease agreement comes to an end on December 31, and during a special council meeting on September 29 [2016], it was resolved not to extend the agreement beyond the lease term."
Arrangements made to collect arrears
At that time the previous acting municipal manager Bevan Ellman said after disconnecting the restaurant's electricity, but then turning it back on after a partial payment was received, "Arrangements have been made for the electricity and water arrears account.”
At the time, Ellman said the outstanding rental amounted to R5 288 095. “Their rates and services account currently stands on R1 010 443,” he added.
Ellman further said that the municipality’s attorney had also given Senza formal notification of termination of their lease as per the council resolution. "While the lease agreement expires at the end of the year, it provides for a month-to-month extension subject to mutual agreement between the two parties," said the municipal statement.
No benefit for municipality
Deputy mayor Peter Myers said the municipality had been involved in lengthy and expensive litigation with the current tenant and that the continuation of the lease would not be beneficial to the municipality.
He further said the lease in its present form would also not meet council's long-term objectives for the properties in question.
Problems go back to 2008
Problems arose at the outset of the lease in 2008 between the municipality and owner Roland Walker, allegedly over an agreement that Senza would upgrade the building and facilities to the amount of R1-million, but by 2011 Walker said it had cost him R2.5-million, which was never part of the agreement – and nothing was ever put in writing.
One year ago, when Walker gave comment to the Knysna Plett Herald, he said that he would not be paying his bills to the municipality until this issue was resolved, and that he would continue to seek legal advice.
Walker claimed that initial costs of the upgrade, which needed to be done when they “moved in", would have been R1-million, but the condition of the floors, roof and other structural work pushed up costs dramatically.
This led to lengthy litigation which has been been ongoing – and does not look not set to end anytime soon.
Concerned resident Mike Elliot (who is one of many) summed it up by saying, "This is just an absolute joke that ratepayers have to pay for something like this! Over the years I have asked municipal officials and councillors to investigate.
How on earth can it get to a stage where so much money is owed and they are still trading – despite court cases and now even an expired lease?
Year after year the Knysna municipality gets a clean audit, despite the Senza skeleton in their cupboard. Unbelievable!"
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'We bring you the latest Knysna, Garden Route news'
10:03 (GMT+2), Thu, 12 January 2017
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