Stellenbosch residents up in arms as alleged secrecy by municipality shrouds Steinhoff development

The Devon Park community says that the municipality has been quiet about the Steinhoff-owned Sawmill development since 2016. Their gripe is that there is a lack of transparency about the development’s details and commencement on the part of the Democratic Alliance-led Stellenbosch Municipality. (Photo: Rebecca Pitt)

By Rebecca Pitt

5 May 2021

Stellenbosch was once the headquarters of Steinhoff, but it has maintained a low profile amid its accounting scandal. Now its name has popped up in a community dispute with the municipality over a property development it owns — one of only three remaining Steinhoff properties in its dwindling Stellenbosch portfolio.

Steinhoff, the international holdings company, is at the centre of a property dispute in Stellenbosch — its former headquarters before its unravelling in 2017 when the group’s share prices plunged 98% on the JSE after irregular accounting transactions came to the fore.

The property, Sawmill, is a remnant of Steinhoff’s presence in Stellenbosch — now holding only two properties and a small corporate office — as the corporate group has been closely associated with the town for years.

Besides the group’s headquarters being situated in the town before the scandal, Steinhoff had also started sponsoring student rugby in Stellenbosch before becoming the sponsor for national rugby. Some of the key role players in the group’s downfall, including former CEO Markus Jooste, hail from the town.

Now, the Sawmill development that the group has owned since 2014 has come under question by neighbours who claim they were caught unawares by roadwork vehicles that began drilling at the foot of their streets around Easter weekend.

The development will usher in residential, retail, commercial and light industrial activity in the area, according to Steinhoff, but neither Stellenbosch Municipality nor Steinhoff disclosed specific details.

While nearby residents question the perceived secrecy over the development since first becoming aware of it in 2016, Stellenbosch Municipality has, in turn, claimed due process has been upheld.

Residents in the Devon Park community, residing close to the Sawmill, sent petitions about the development in 2016 and were provided with some details, including the construction of a large shopping centre.

The petition asked to close off a road in the neighbourhood, Nagtegaal Road, in light of the developments. Nothing came of the petition and word about the development went quiet amid the Steinhoff scandal.

Then, according to residents, sudden roadworks caught the community off guard in February 2021.

Subsequently, residents resubmitted their petition, as well as emails to the municipality outlining their concerns about the roadworks and the development’s specifics. When communication with the municipality was acknowledged, but never followed up, residents alerted Daily Maverick early in April.

The Sawmill development (pictured above) is situated in Devon Valley in Stellenbosch and own by the controversial Steinhoff group. Recently, the development has become the centre of concern for the neighbouring community. (Photo: Rebecca Pitt)

The property

The Sawmill property in question is situated in an area known as Onder Papegaaiberg, adjacent to the Steinhoff-owned Woodmill property.

Both properties lie a road away from the Devon Park precinct; a quiet area consisting of two retirement homes and suburban family dwellings.

Devon Park residents have a history of complaints about noise and pollution coming from the two Steinhoff properties, as well as the fast-moving traffic of Adam Tas Road.

Peter Olivier is among the residents who woke to a major traffic circle being constructed along Devon Valley Road, on the spot where roughly 40 beefwood trees had been chopped and cleared towards the end of March.

Going up

The roadworks were making way for a large traffic circle — the first move in the Sawmill development. Due to its scale, the traffic circle will align the Devon Valley, Vredenburg and Adam Tas roads, according to a spokesperson for the Steinhoff* group.

The circle comes as part of the conditions for approval in 2016, laid out by the municipality and province, the spokesperson said.

According to municipality spokesperson Stuart Grobbelaar, a site development plan was submitted by the group in 2019 and approved in 2020, but it did not need to be readvertised for public participation since it was merely complying with the conditions of approval.

Residents of Devon Park whom Daily Maverick spoke to are questioning whether the development has changed from what was first communicated in 2016 and “would just like to know what is going on”.

In an April ward meeting for the area that Daily Maverick attended, alderman Johannie Serdyn said that the development was no longer destined to become a predominantly business and commercial area, but rather a mostly residential development area. Residents asked for further details in the meeting; their questions were not addressed.

Last Friday, when Daily Maverick asked for the development’s specifics and if the planned development had changed since 2016, the municipality did not respond.

According to the Steinhoff spokesperson, the group is committed to seeing the project through and the Woodmill and Sawmill properties will eventually be sold, since Steinhoff Properties has been designated as “discontinued operations”.

Road construction workers are building a traffic circle along Devon Valley Road in Stellenbosch. The traffic circle, which will connect the Adam Tas, Devon Valley and Vredenburg roads, is set for completion in November. (Photo: Rebecca Pitt)

Things gone cold

While Steinhoff and the municipality hold that the development will benefit the community, the Devon Park community argues that it is not against the development but takes issue with sluggish communication and consideration from the municipality.

According to Devon Park resident Fran Ferreira — who sent emails to the DA-run municipality — the ignored emails and 2016 and 2021 petitions are a first for the community.

Iréne van Wyk, manager of the Geluksoord retirement home in Devon Park, the increased movement in the area would affect the safety of the area’s elderly. Other residents were concerned about increased traffic.

Grobbelaar said that appropriate public participation had been in place and that the intersection improvements had been identified, having been “brought up and deliberated as part of [Integrated Development Programme] public participation meetings in the affected ward for years”. Prior to development approval, there was an advertising and public participation process where a number of objections and comments were received, he said.

The Devon Park community says that the municipality has been cagey about the Steinhoff-owned Sawmill development since 2016. (Photo: Rebecca Pitt)

After recommendations were made and the application with conditions approved in 2016, objectors were granted a right of appeal, but none were lodged, he said.

On Friday 23 April, Grobbelaar was asked for further details of the public participation process, but he had not responded at the time of publication.

Since the accounting scandal brought the group to the brink of collapse in 2017, Steinhoff International Holdings NV has been trying to restructure and rebuild its reputation amid dozens of lawsuits against it.

This came as German authorities discovered several accounting irregularities which saw the subsequent resignation of Jooste and a drop of R200-billion in Steinhoff’s market value. In March, Daily Maverick’s Sasha Planting reported that German authorities had indicted four people for balance sheet manipulation. DM

*Daily Maverick requested an interview with Steinhoff, but it declined, citing ongoing litigation and legal issues. All correspondence was via email, but the group did not want to give a name to its communication with the media, saying this was company policy.

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