Friday 12 July 2013
Monday meeting - an estate agent speaks
Apologies for the wordy transcript but he is an estate agent. Here is the transcript from T Painter espousing the virtues of Shaun Keegan.
Good evening everybody
Got me to blame really haven’t you, I introduced the site some eleven odd years ago, but we .... we’re all to blame, of course, because we’ve all had our share of protesting and upsetting the situation in a number of ways.
What I would like to do because it will answer a lot of those questions and I think Councillor Poole has given a good sensible appraisal of the current situation. We are at deadlock; I am now going to read a report from SFP’s solicitor that summarises a lot of what Alan Poole has said and shows my client’s position, so bear with me it is quite lengthy.
At present both parties i.e. the Council and SFP are bound by the terms of the 2006 development agreement. The Council through Mark Seed are stating they require to be convinced that the Council will be in a stronger position under any new agreement and there will be a guarantee that the work will be completed and that the Hotel will be completed.
The 2006 agreement does not work and indeed because of this both the Council and SFP are in an impossible situation. The Main reasons the 2006 agreement does not work are as follows:
a) That agreement requires any funder for the development to enter into a separate agreement with the Council. Guarantee that if the developer, if for any reason does not proceed with the development, it (the Funder) will take over the developer’s responsibilities and secure the completion of the development. In the present economic climate no funder will agree to enter into such an agreement. This point has been accepted by both the Council and SFP.
b) That agreement effectively prohibits the sale of the flats until completion of the Hotel and that is now practicably impossible because of the following:
1) The Hotel is at the Harbour Parade end of the site and the new(?) traffic order affecting Nero’s Hill prohibits any construction traffic from approaching the site from the other end, which you would have to do if the Hotel is built first and the flats and commercial units secondly.
2) The design of the Hotel incorporates a build over the access road at the rear and the tunnel at the back has a height restriction which will prevent construction traffic passing through it.
3) It has been made clear by proposed hotel operators that they would not operate or open the hotel with a building site in operation next door.
c) Pursuant to that agreement being signed leases for 199 years had been granted to SFP by the Council. These leases made reference to the 2006 agreement and as such are not acceptable as security by Funders for the development of the site.
The redrawn agreement incorporates a legal commitment on the part of SFP to the Council to complete the development, being the flats, commercial, and the Hotel. As in the original agreement overage is to be paid to the Council on the disposal of each of the flats and each of the commercial units. To support and secure the Council their obligation SFP has offered a second charge on the more valuable part of the site i.e. the residential and commercial part which provides an obligation on the part of SFP to complete the development and pay the overage. If SFP were to default the Council would be in a position to call in the second charge and whilst this would involve in redeeming the first charge it would then be in a position to seek forfeiture of the leases and repossession of the site.
SFP’s commitment to date, as you have already heard, has been investment exceeding £5M. The delays have been brought about by the change in the economic climate, which has made finance for the project extremely difficult. It has been endeavoured at all times to overcome these problems and extremely anxious to get on the site and commence the development as it needs a return on its capital investment. The delay has substantially reduced its potential profit, and therefore the attraction of this development, primarily because of the change in the economic climate, which has meant the interest he is paying for the funding has increased by 20%. Notwithstanding this SFP remains committed to complete the development.
It is a Commercial Company and has endeavoured to jump through the various hoops put up by the Council but its ability to continue to do so is becoming extremely difficult and its willingness to start and to show the people of Thanet on what has been a dead site. For too many years it appears to have been obstructed at every turn.