State scraps prime mill land ‘largesse’ to builder Former CM Ashok Chavan Had Given 7.6 FSI For Hotel

Mumbai: The state government has cancelled an abnormally high floor space index (FSI) of 7.6 sanctioned by former chief minister Ashok Chavan for a hotel project on the defunct Hindoostan Mills property at Prabhadevi. The government's decision is a major setback for the developer, Hubtown (formerly known as Ackruti), which purchased this six-acre land jointly with construction giant DLF 

for Rs 350 crore in 2007. It had planned to build a 60-storey hotel. 
    Chief minister Prithviraj Chavan is believed to have overturned his predecessor's controversial decision last month. "He was livid when told that the National Textiles Corporation (NTC) had valued its own Indu Mills property at a phenomenal Rs 6,000 crore based on the largesse given to Hindoostan Mills,'' said sources. 
    The state government was at that time negotiating with NTC to take over the 13.5-acre Indu Mills for an Ambedkar memorial. "The CM was intrigued at the reckless valuation done by NTC. There was no way the state government could pay such a large amount to NTC. It was then that the urban development department decided to revoke the high FSI sanctioned by Ashok Chavan,'' said a senior bureaucrat. 
    The developer is now left with a much-reduced FSI of 1.33, which will allow only 3.5 lakh sq ft of permissible built-up area compared to the 15 lakh sq ft it had envisaged earlier. FSI defines how much can be built on a plot. For instance, a 7.6 FSI would allow a developer to build 7,600 sq m on a 1,000 sq m plot. Other builders too sought higher FSI 
Mumbai: Hubtown MD Vimal Shah was unavailable for comment, but sources said the developer will now set up a residential building on the Hindoostan Mill land. However, the plot falls under the coastal regulation zone 1 and is reserved only for industrial purposes. 
    Last year, TOI had reported that NRI tycoon C Sivasankaran had sold his 50% stake in Hindoostan Mills for almost Rs 450 crore. Hubtown and financial investor Red Fort Capital, who had the remaining stake, purchased Sivasankaran's share. Sivasankaran had picked up DLF's 50% stake in the property for Rs 310 crore in 2009. 
    Government sources said another reason why the Hindoostan Mills FSI had to be rejected was because other developers demanded similar concessions. "The owner of SoBo Central mall at Tardeo wanted more FSI to build a hotel, citing the Hindoostan Mills case,'' said officials. 
    Officials said that some developers cunningly procured high FSI for hotels permitted under the 1967 development control rules (DCR), but simultaneously demanded building concessions allowed under the 1991 rules. Real estate sources said several developers procured much higher FSI under the garb of building a hotel and then slyly convert it into a "service apartment facility''. "They then surreptitiously sell these apartments on long lease,'' they said. 
    Meanwhile, the controversy over grant of hotel FSI has also stalled the redevelopment of the erstwhile Sea Rock Hotel at Bandra Bandstand. Last year, the 5.5 FSI project did not receive environmental clearance or approval under the Coastal Regulation Zone (CRZ) notification. The Maharashtra Coastal Zone Management Authority (MCZMA) raised queries about the project and refused to endorse it. The BMC too did not grant the project a commencement certificate. The Bombay high court too is hearing a PIL against the grant of such a high FSI to this project. 
    The Sea Rock project was earlier sanctioned an FSI of 2.5. However, in 2009, the then chief minister Ashok Chavan permitted additional FSI of 3.

THE PLOT In mid-2007, the Hindoostan Spinning and Weaving Mills (above), located near Siddhivinayak temple at Prabhadevi, was sold by its owner, the Thackerseys, for Rs 350 crore to Ackruti Nirman (now renamed Hubtown) and DLF. In 2009, NRI entrepreneur Sivasankaran picked up DLF's 50% stake in the property for Rs 310 crore. Last year, he sold his stake for Rs 450 crore to Hubtown and financial investor Red Fort Capital