Kolkata: A 19th century market in Kolkata, one of the oldest in the city, is set for redevelopment with a developer taking the 2.5-acre market on a 29-year lease from the private trust that owns it.
Built in 1871, Natun Bazaar is owned by the Trust Estate of Raja Rajendro Mullick Bahadur. The trust, one of the wealthiest set up by business families, also owns the iconic Marble Palace in the heart of Kolkata, a sprawling mansion with Corinthian columns built in 1835.
The market was leased out to Binay Kumar Dubey, partner, ND Vintrade Llp. “It is only a business arrangement for the benefit of the estate," said Suvendra Mullick, a trustee, adding that there is no plan to wind down the estate. The estate owns properties across Kolkata. Tenants at the market are jittery.
There are at least 650 registered tenants at Natun Bazaar, said Manoj Singh Pandey, an office-bearer of the tenants’ association. The market, he said, supports the livelihood of at least 5,000 people and many more indirectly. “The market having been taken over for redevelopment, we are worried about our future," added Pandey.
Asked about his plans for the market, Dubey said over phone that he had just taken over the market and that he hadn’t yet decided what he would do with it.
Dubey will pay the estate Rs6.33 crore as lease premium in instalments over several years and Rs2 lakh in monthly rent, according to the lease deed seen by Mint. The deed executed in early August says the market is to be redeveloped to create both commercial and residential space.
This is the first private market in Kolkata to be leased out for redevelopment. Two Kolkata Municipal Corporation, or KMC-owned markets were previously leased out for redevelopment in 2004 and 2006.
One of them, Lake Market in south Kolkata, has been turned into a mall and a multiplex; the redevelopment of the other has been stalled because the developer ran into financial difficulties.
In 2007, KMC had selected through bidding an arm of Reliance Industries Ltd to redevelop the Park Circus market, but the deal did not materialise due to opposition from tenants. Around the same time, KMC tried to lease out at least two other markets—VIP-Kankurgachi and Sakher Bazar—but the plan had to be aborted because of resistance from people whose livelihoods were at stake.
The biggest uncertainty is resistance from people dependent on the market for their livelihoods, said Mahendra Soni, director at Venkatesh Leisure Pvt. Ltd—the firm which leased Lake Market from KMC and rebuilt it. “You have to compensate everyone for the entire period of displacement," he said, adding that the key to addressing this challenge is “skillful negotiation".
Developers investing in such projects should brace for delays and cost overruns, according to Soni, whose own venture with Lake Mall initially faced financial difficulties. KMC had made it clear to all stakeholders that the redevelopment of the market couldn’t be blocked, though the civic body did not take part in negotiations over compensation, added Soni.
Dubey is on his own at Natun Bazar and negotiating with 650 tenants is going to be tough, said a leading real estate broker, who asked not to be identified. Because of the risks involved, he has agreed to pay only small amounts at a time and link the bulk of the payment with cash flow from the project if at all it materializes, this person added.