Saturday, 13 July 2013

Monday Night Meeting - Alan Poole's Speech

again apologies another lengthy speech

Good evening, I am Cllr Alan Poole, Deputy Leader of TDC and Cabinet Member for Operational Services – the Directorate dealing with the Royal Sands development.
I will attempt to set out the main issues relating to a number of aspects of the development of the Pleasurama site. This is because the information both in the media, on blog sites and at local meetings may not represent the current position with complete accuracy:
* Freehold - the council currently holds the freehold for the site, but the future transfer of the freehold is already part of an existing agreement with the developer which was approved by the Council in 2006. This agreement also granted the developer three 199 year leases covering the whole of the site - granted to enable the developer to secure funding and have possession of the site for construction purposes. Following completion of the flats, commercial units and hotel, the freehold will pass to the developer. The agreement was made against the aim to achieve value from the council’s sites, as well as trying to address our top priority of generating sustainable employment.
* The Current Agreement - the 2006 agreement was subsequently revised in 2009, at which time it was secured by a bond paid by the developer which will only be released on completion of the development.
* The Latest Discussions – the current proposals from the developer are still seeking changes to the development agreement and leases to meet the requirements of their potential funders. The council’s position on new proposals remains the same:
o Completion of the development within an agreed timetable
o Delivery of the full development proposal including the residential, commercial and hotel elements as planned
o Payment to the council of the agreed sums
* Work on Site - the developer has invested nearly £5 million (*2) in the site so far. This has funded cliff works undertaken by the council, as well as drainage and road works. In addition, this has also included the foundation works completed on site and the associated design works, as well as the bond payment that has been paid to the council.
* Development Funding - the developer has been seeking external funding to allow the completion of the site, and this has proved very difficult since the revised agreement was signed in 2009. In the current financial climate the banks and other lending institutions are reluctant to financially back investments that contain
some of the provisions contained with the current development agreement and leases. This has been the primary cause of the developer seeking variations to these documents. The council is currently undertaking due diligence actions in relation to appraisal documentation submitted by the developer.
* Compliance with Agreement - the main fundamentals of the agreement have been met by the developer. Although the development is due to be completed in 2014 under the agreement, there are provisions that this can be extended to 2017 if market circumstances dictate this and given the existing national economic position any such request would have to be given proper consideration. The Council could decide to refuse a request for an extension taking into account the slow progress of the development to date and concerns in relation to the current financial appraisal provided by the developer. However given the amount of funds already invested we would expect the developers to make a legal challenge to this. This would inevitably result in expensive and uncertain litigation and the council would need to consider its chances of success in terminating the agreement against the cost of legal action. More importantly, it must be noted that even if the council was successful, there would remain the long leases which the developer holds, which would remain valid even if the agreement was terminated. It would take further legal action by the Council in order to terminate those leases and recover possession of the site, the success of which would also be uncertain. These are matters which will form part of the consideration of options by the Overview and Scrutiny task and finish group.
Overview & Scrutiny are due to meet on 18th July: this is a public meeting.
* Financial Return - there have been some misconceptions about the value of the site and that this has been undervalued. However, this has been looked at in some depth by the council’s professional property officers and for a site on which all the investment cost and risk lies with the developer the council is getting above the market average for this type of deal, especially as it includes the construction of a hotel.
* Due Diligence - the council has already set out its requirements before accepting a revised agreement, and one of these is in relation to due diligence on the funding of the development. Despite concerns raised about this, the deal has always required the large majority of funding to come from external lenders, and the council’s focus will be primarily on whether this is financially robust. Financial appraisal details on the current situation have been provided recently as part of this process, and these are being assessed currently.
* Nature of Proposed Development - the question of whether this is the correct development for the site has been raised since it was first discussed over 10 years ago. Although this is a fair question, and will remain so, it does not provide a route (*1 my take) forward for the council at the present time. The development has a valid and enacted planning application for the proposals, and has a valid development agreement and leases under which it can be constructed if the funding is available. These cannot be set aside without legal action and as explained above, this has limited chance of success at this stage. Despite a number of suggestions on this front the council cannot seek to terminate the agreement or the leases on the basis that an alternative is preferable now. This would be immediately challengeable by the developer.
* Action by council - The council has already agreed to consider its options in relation to the current agreement and leases because the developer did not satisfy its requirements by 22nd May. This has involved setting up the task and finish group under Scrutiny to assess these options specifically and for Scrutiny to report back to Cabinet with its findings. However, as there is an existing agreement and leases with the developer, they are legally entitled to seek changes to these to allow the development to proceed, and the council need to consider these proposals in a reasonable fashion. Merely cutting off discussions, despite the developer not achieving the 22nd May target, is not an option as it could be challenged legally.
* I still believe the best way forward for all concerned and particularly the long suffering residents of Ramsgate is for the developer to get on site and complete the development as soon as possible.

*1 due diligence Can TDC confirm they now have sight of identity documents for Shaun Patrick Keegan?
*2 Figures do not add up to £5M

Whilst it seems clear to Cllr Poole there is more than one Cllr that believe SFP are not going to build, however in his latest email Cllr makes his feelings more than obvious, even during the debate he queried one resident's right to speak as he had only lived here 3 years.

Thank you for your email………….all the points that you make have already been made many, many times.
We have had many debates and lots of questions………which is probably why members did not want to debate the subject yet again.
We had a very long agenda which, even without a Pleasurama debate, took us well past 10:00……….believe it or not there are other important items that need attention!

I attach my Ramsgate Public Meeting speech and the answers to the FORS Council Meeting questions in the vain hope that some of your members might begin to understand the Council’s position.

By the way it appears that some of your members are not even Thanet residents let alone Ramsgate residents!

I don’t have a problem with robust political debate; I have broad shoulders………..but I will not tolerate the harassment and abuse of TDC Staff………….I would suggest that you speak with your members.

The current position is:-
1. The 2009 Agreement is valid.
2. The Leases are valid.
3. The Planning Approval is valid.
4. SFP has until 2014 to complete the development.
5. SFP has the right to request an extension to 2017.
6. TDC has to be seen to be acting ‘reasonably’ and will continue to speak with SFP.

Regards,

Alan Poole

6 comments:

Solo Gays said...

Barry
Cllr Poole advises the emailer to speak to members? Does he refer to the Friends of Ramsgate Seafront (FORS)group? And is FORS constituted with its own bank account?

Barry James said...

don't know Solo I'msure if Alan joined the FB group he would be able to post his questions. Other Councillors have joined and post

Solo Gays said...

Barry
I have just read Nicholas Cooper's response to Cllr David Green on Facebook. I wholeheartedly endorse what Nicholas says and David Green needs to come off the fence. It would not be wise for any Councillor to attempt to downplay Mr Cooper's contribution just because he has lived here only three years.

Lyndon T Palmer said...

The right to request an extension to 2017 ?

That sounds a tad ominous.

Am I right that TDC has an equal and opposite right to refuse ?

Barry James said...

Was told if they were building in a serious way then TDC would have to grant it. If however they were not building they would not. TDC was a touch hazy about it!!

Anonymous said...

So, Alan Poole thinks that the council is unlikely to be able to recover the lease and so, they have to continue to work with SFP, despite SFP's failure to produce evidence that the finance is in place to complete the development. On the other hand, we have Terence Painter, who claims that the finance is in place but that SFP are not willing to start work because they are worried that TDC might try to reclaim the lease. It seems to me that both of these cannot be right. If TDC has no realistic prospect of mounting legal action against SFP, why are SFP so worried? And, if SFP are worried about this now why weren't they worried about it when they signed the original legal agreement? Is Painter, in fact, saying that they never had any intention of proceeding with the development until the freehold was transferred?