Monday, 1 September 2014
Bit of a council U-turn here, I wonder if it’s a vote winner, it seems to back on with The Royal Sands, no flood risk assessment, the council get full liability for the cliff for the life of the development, and from the bandstand we get to look a 100 feet of corrugated rubber, instead of the beach and harbour.
This is what they have to say:
Royal Sands Development
To: Cabinet – 11 September 2014
Main Portfolio Area: Cllr Rick Everitt, Cabinet Member for Finance & Estates
By: Edwina Crowley, Head of Economic Development & Asset
Summary: Further information has become available since Cabinet adopted
the recommendations of the Overview and Scrutiny Panel on 20th
February. Cabinet are asked to consider this information and
determine the resolution.
1.0 Introduction and Background
1.1 On 20th February Cabinet made a number of decisions based upon the
recommendations of the Overview and Scrutiny Panel which it received and adopted.
2.0 The Progress since the Decision on 20th February
2.1 Since the Cabinet report of 20th February there has been a change in project team as
Edwina Crowley Project Lead, Head of Economic Development and Asset
Steven Boyle Interim Legal Services Manager
Mike Humber Technical Services Manager
Grant Burton Capital Development Manager
2.2 The team is supported by Stuart Wortley and Luke Miotte of Pinsent Masons (legal
advice) and Tim Mitford-Slade of Strutt and Parker (valuation advice). The project team
have re-visited the site and reviewed the documents and correspondence.
2.3 Acting on the recommendations contained in the Cabinet report made on the 20th
February the Council served Notice on the developers legal advisor requiring remedy
of the breach of the agreement.
2.4 Following the service of the Notice the development agreement contractually provides
for parties to enter into mediation when there is a significant dispute and therefore on
10th July, a without prejudice meeting took place at the offices of Pinsent Masons.
2.5 At this meeting the Developer informed officers that they had been approached by
Cardy Construction Ltd to acquire the share capital of SFP (Ventures) Ltd thereby
proposing to take ownership of all SFP contractual obligations (including this
development agreement with the Council) and that in principle, the Developer is keento accept the offer. This would mean that Cardy Construction Ltd would become
responsible for finishing the construction works in accordance with the planning
2.6 Furthermore Cardy Construction Ltd would amalgamate this company into the
established parent group of companies which has an long history of successful
performance with such schemes.
2.7 Additionally, Cardy Construction Ltd are, in principle, in a position to enter into an
agreement which, subject to successful negotiations between the parties, would mean
the Council would not only receive the overage payments in advance of completion of
the construction but also provide additional benefits for the Council.
2.8 Cabinet is asked to note at this point that the current contractual arrangements with
SFP entered into in 2006 mean that the Council has substantially disposed of its
freehold interest in the land (with freehold transfer provisions documented in the
development agreement); the Council’s only continuing legal interest is the right to
receive overage payments in respect of the completed units.
2.9 Notwithstanding the problems that the developer has outlined which they state have
caused a problem in developing out this construction (see 3.2.3) if the matter
progressed to Court, the Courts would expect the Council to undertake an objective
assessment of all reasonable offers put forward in order to complete this construction
project and by doing so receive the overage payments owed to them.
3.0 The Current Situation
3.1 In light of this offer advanced through the mediation process, the council development
project team has reviewed all the documents and correspondence and can provide
the following comment on the position.
3.2 It is clear following legal advice that terminating the development with SFP would not
be straightforward for the following reasons:-
3.3 Notwithstanding the expiry of the date for compliance contained within the Notice
served on the developer’s legal advisors, the procedure for terminating the
development requires the service of 3 additional separate notices. The Notice served
referred to the breach committed and had to allow the developer reasonable time to
comply with performance documented in the notice. The developer may comply in full
or in part, and at the end of the period for compliance the developer would be allowed
further time to proceed to the next phase of works.
3.4 To continue down this route of performance management means the process will be
likely to be drawn out over a number of years.
3.5 Furthermore, SFP (Ventures) Ltd could at any stage decide to contest any attempt to
terminate the development agreement by formal action on the basis of several
arguments. Whilst there are varying degrees of merit to these potential challenges
they might include:-
a) some of the delays to the development were caused by matters outside of their
control and therefore may validate the request by SFP to extensions of time, for
example the problems with the cliff face wall, access and egress restrictions.
b) SFP have also made allegations about the actions of a particular Councillor
trying to undermine its attempts to fund the scheme and promote the
development (including its attempts to identify a suitable hotel operator).
c) Notwithstanding the programme of works agreed at the time of the 2009
variations required the developer to build in an illogical manner because the
hotel could not sensibly be opened with the residential still underway; the
highways issue in 2010 made it practically impossible too for the reasons
documented in (d) below.
d) A review of the programme of works in light of the access/egress restrictions
mentioned means that it would be extremely difficult to follow in a safe and
practicable manner (given that if the hotel was built first in accordance with the
programme, access to the remaining site would be obstructed by the hotel), and
Health & Safety Construction Regulations require adjustments to works
programmes where there is a safer way of delivering the project.
3.6 SFP claim to have invested significant sums of money in the development, accordingly,
they are likely to fight very hard to protect SFP's interest in the development site.
3.7 For these reasons, any formal attempt to terminate the development agreement would
undoubtedly take a considerable time and there is always a risk with litigation that the
Council may be unsuccessful and at the very least the outcome would be uncertain.
Contentious litigation would be very likely in this case and progressing with such action
would be expensive (with uncertainty as to where the Court would award the costs) and
could tie the development site up for many years.
3.8 The Council's decision through Cabinet to terminate the development agreement on
20th February 2014 was reached on the basis of a summary of Pinsent Masons' legal
advice. Issues which have been raised by Parry Law in response to the Notice served
for the breach have resulted in amendment to the original advice, including (as
requested by Members) a review of the comments around the absence of a long stop
date being a “material defect”
3.9 There was no one off long stop date in the development agreement whereby if the
developer had not performed the Council would have step in rights to get the site back.
The agreement did however have several performance indicators; failure to perform
one of them would trigger a review of the agreement with the Council taking action as
appropriate. In light of the amount of money that the developer would have invested at
each stage, Pinsent Masons advise it is unlikely that they would have been agreeable
to a long stop date when the contracts were being negotiated in 2006.
4.0 Cardy Construction Ltd
4.1 Focusing on the present situation, it is clear that circumstances have materially
changed in that there is now a reputable and established construction company,
willing to take over SFP and they in turn have indicated they are willing to transfer
their interest to this company. Upon completion of company transfer contracts
between SFP and Cardy Construction Ltd, the current owner of SFP would have no
further involvement with the development.
4.2 Cardy Construction Ltd have in principle funding in place to complete the
development within a reasonable time frame. Furthermore, they are of a sizable
nature, have proven technical expertise and a consistent record for delivering quality
projects of this type and scale. 4.3 It is also proposed that the Cardy Construction Ltd will employ local tradespeople for
this project and engage apprentices. A construction project of this scale will employ
up to 200 people on this project when in full operation, there is also the ongoing
opportunity for jobs aligned to the hotel trade, commercial units and servicing of the
residential common parts.
4.4 Overall, Cardy Construction Ltd is therefore considered a much stronger covenant for
the development and for this reason are able to attract funding for the scheme,
making delivery viable.
5.0 Commercial Considerations
5.1 The project team had been asked to consider the present value of the site and what
the implications would be if the council was able to buy the site from the developer.
Valuation experts Strutt and Parker were asked for advice on the present value of the
5.2 Strutt and Parker advised that the site is worth a significant amount of money even in
its part developed state.
5.3 The Council does not have the funds to buy the site back (see section 7.1 below)
even if the developer was willing to sell the site. The market value of the scheme is
the value added by the granted planning permission for the finished scheme.
5.4 Even if the Council was able to buy back the site then the Council would still be
required to secure an alternative developer, in order to secure the best financial value
for the site, so it is likely that the same scheme or a scheme of similar type and scale
would be developed out.
5.5 Therefore, the offer by the Cardy Construction Ltd to finish the scheme and
compensate the council for the overage money owed is considered to be a good
solution. To get the site developed will not only bring financial return to the council but
will support regeneration in Ramsgate, both by direct and indirect employment
5.6 The project team have considered the benefits of receiving the overage payment in
advance of completion of the development. The project team are also confident that
they can negotiate better contractual terms for the council to include a call in option
5.7 The offer from the Cardy Construction Ltd to build out the site in a timely manner is,
subject to successful negotiations, considered by the project team to be acceptable in
6.1 It is therefore recommended that Cabinet authorise officers to defer the
recommendations of the Cabinet paper dated 20th February whilst positive
6.2 Furthermore, that Cabinet authorise the project team (in consultation with the S151
Monitoring Officer, Head of Paid Service and Cabinet Member for Finance and
Estates) following due process and procedures to progress with negotiations;
6.3 That a report be brought back to Cabinet in October, documenting the outcome of the
negotiations for final decision.
7.0 Corporate Implications
7.1 Financial and VAT
The Royal Sands development is currently accounted for within the Council’s asset
register and subsequently within the Balance Sheet. The financial implications of the
aforementioned have been detailed below:-
To receive the overage monies owed to the Council would result in a substantial
capital receipt that would be used to fund council’s capital expenditure programme.
It is noted that preliminary investigations were held by the project team to get an
indicative present value for the site and that this amount is a considerable sum. There
is no allowance in the budgets to take this action, it would constitute as capital
expenditure for acquisition of the rights bought back that had previously been sold.
There has been a decline in capital receipts over the past few years due to the
economic downturn and the need to achieve best value. Currently the council does
not hold sufficient funds in the unallocated capital receipt reserve to fund such
expenditure as it has been fully committed to fund the existing capital programme. It
is likely the Council would need to borrow to facilitate the purchase of the leases,
which would result in increased revenue costs for the Interest on borrowing and the
minimum revenue provision for principal repayment.
Once agreement has been sought on which option would be the most appropriate
then specialist VAT advice will need to be sought.
The legal issues are broadly as outlined within this report.
There are processes to be followed to seek to terminate the existing agreements as
outlined. There is likely to be a challenge to this process which will be costly and time
Careful attention needs to be made to any action taken either to terminate the existing
agreement, purchase the leases or seeking to sign a new agreement to ensure the
Council’s legal position is secured.
Appropriate advice has been sought at all stages so far to ensure that the Council’s
position is sustainable.
As outlined within this report the position has changed materially since the Cabinet
Decision was taken in February.
Given that there is now an alternative which may bring about a solution to the
problem avoiding the legal challenges it is appropriate that members are given the
opportunity to consider this and to take a decision based upon all of the options.
7.4 Equity and Equalities
If Cabinet agree to taking this forward, all discussions and agreements are subject to
a Council equity and equalities assessment.
8.0 Decision Making Process
8.1 This is a key decision subject to call in.
Contact Officer: Edwina Crowley, Head of Economic Development and Asset
Reporting to: Madeline Homer, Acting Chief Executive
Corporate Consultation Undertaken
Finance Nicola Walker, Finance Manager - HRA, Capital & External Funding
Legal Steven Boyle – Interim Legal Services Manager & Monitoring Officer
First the council seem to have rejected the Save Manston Airport paper petition, see https://www.whatdotheyknow.com/request/save_manston_airport_petition#incoming-555846 Perhaps I have got the wrong end of the stick here, but my understanding was that the as the E-petition was open to any email address anywhere in the world i.e. if you live Australia and have three email addresses, you could validly sign it three times, whereas if you live in Thanet and pay council tax to TDC but share an email address with your partner only one of you could sign it. Oh yes what was my understanding? Well something along the lines of the council saying, “we have justified spending a substantial amount of money on investigating the viability of a cpo based on the paper petition.”
Now this isn’t an anti Manston post, anyone who reads this blog will know that I am basically supportive of Manston, but that said, if the council are working to save the airport they have to be seen to have a local mandate to do this otherwise come the time it will all fall apart.
Still on the Manston front, this has just been published on the net, which is basically Ex-Manston employee speaks out http://www.savemanstonairport.org.uk/wordpress/wp-content/uploads/2014/08/Ex-Air-Traffic-Controller-and-other-Manston-Airport-staff-speak-out.pdf disgruntled ex employee or serious points, well the choice is yours.
I have covered the E-petition to TDC before see http://thanetonline.blogspot.co.uk/search?q=manston+petition so what of the other petitions.
Frankly it is just as easy to sign a government petition as it is to engage in a Facebook group.
The gist of this seems to be saying that in recent years Manston Airport has been run on a shoestring with facilities more associated with the third world. Obviously in the first instance as a Ramsgate resident and with Ramsgate being on the runway approach flight path this is of some concern to me.
Not really sure if there is some message here.
At the moment I have just pressed publish before editing the rest of this post so the rest is probably full of errors and repetitions
Historically the airport hasn’t done very well on the investment front and over the last few years there has been an ongoing struggle between the Environment Agency and successive airport owners over the environmental permit.
Basically various owners have sought to avoid doing the expensive work required to obtain an environmental permit, something that could be seen as the first step to the airport gaining planning consent as an airport, something that would have helped maintain its future use as an airport.
This state of affairs has lead to a position where this large site in the middle of Thanet has very little to protect it in terms of what can be developed there, so potentially any owner could make a very large amount of money by building houses on the site.
There is a large demand for new build housing in the southeast and all the indicators are that this is likely to increase.
Manston isn’t a greenfield site so isn’t covered by any of the protections that relate to such sites.
Manston isn’t an airport site with planning permission as such.
What Manston is, is a brownfield site that failed to achieve planning consent as an airport, so it is very vulnerable to potential developers.
Really the only way to protect the site as an airport, if that is what local people want, is for there to be substantial government investment and substantial government ownership of the site.
Personally I have mixed feeling about the future of the site, when an aeroplane comes over my reaction is to get out my camera not to complain about the noise or other environmental issues.
That said, what I feel about the airport doesn’t really count, it’s what local people think that counts and so the first step has to be finding out what it is that local people want for the site.
The way things stand this is only likely to happen with a mixture of petitions and some sort of public consultation and this has to be directed at the right part of government.
Now petitioning national government to do something that they don’t want to do is a non starter in Manston’s case, it needs at least 100,000 verified signatures from UK nationals for the government even to consider debating an issue.
Petitioning TDC so far seems to me to be hopeless, mainly because TDC just don’t have the money to make a significant investment in Manston, which as I have said is the only sure way of preventing any future owner form doing what they want to with the site.
This really leaves KCC, now granted KCC don’t want to mount a cpo and don’t want to make a significant investment in the airport, it is however possible to force council’s to do things they don’t want to do by petitioning for a public consultation.
I think the real issue here is to find out what local people want and with KCC this is people living in Kent as with TDC it is people living in Thanet. Whereas I think there likely to be a majority of local people who would like a regional airport that they could fly from, I don’t see there being much support for an airfreight hub. This is mainly because most of the road freight distribution centres are close to the M25 and this combined with Manston having no fuel pipeline means that in the case of petitioning KCC for a freight hub at Manston the main thing Kent people would be asking for is increased congestion on the Kent motorways.
My own feelings are that the whole notion of trying to build a freight hub or any other sort of commercial hub in Thanet is that it has to be some sort of ruse aimed at a different outcome. This comes back to the wheel argument and the wheel that Thanet is the hub of being mostly sea and predominately populated with fish that don’t need freight.
Now by far and away the largest internet group supporting the airport are Save Manston Airport Facebook group, with about 8,500 members, my guess would be that almost everyone interested in the airport is a member, this would include those who are for any aviation activity at Manston, those who are supporting airport expansion there in the hope that it would prevent airport expansion in their backyards, it would include most of the local politicians, the local press and most people who are opposed to the airport or aspects of the airport.
I have covered the E-petition to TDC before see http://thanetonline.blogspot.co.uk/search?q=manston+petition so what of the other petitions.
The only two online petitions I can find are on the UK government’s petition site; Vote to keep Manston Airport open View 2,257 signatures ends 21/03/2015 and No change of use consent for Manston Airport View 940 signatures ends 04/09/2014.
Both of these petitions have been very much plugged by the Save Manston Facebook group and I would say that the number of signatories are a good indicator of the number of members of SMA who actually want to save Manston.
Anyway sorry about publishing what in effect were my notes for this post, put it down to multitasking, I will leave them there and try and get on with the rest of the post.
I guess the real issues are: Is there a clear mandate for saving the airport? Is TDC the appropriate council to attempt to do this? Has the notion of building a freight hub got muddled up with the desire to save the airport.
On to some thoughts about the “Ex-Air Traffic Controller and other Manston Airport ex-staff speak out.”
On to Cive Hart saying he isn’t going to stand for re-election as a TDC councillor. Both Clive’s Twitter and Facebook postings today say: “Thought for the week: Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships. – Stephen R. Covey”
Sunday, 31 August 2014
This sketch of Quex House at Birchington in Thanet was an attempt to capture. What? I think it’s something like a glimpse through time. I don’t think this sort of thing works unless you work very quickly, the whole thing took less than an hour, like being in a trance. Perhaps something haunting but not spooky, anyway hopefully not something that can be captured with the camera.
Here is a photo in of the view.
Here are the photos of the gardens, the family entrance for today would have been £24, but was £18 because the house was closed for some of the time for a wedding. Using gift aid, which in practice means telling them your name, postcode and house number means that this covers family entrance for the following 12 months. Yep that’s it house, gardens and museum, as many times as you want for a year.
Saturday, 30 August 2014
Friday, 29 August 2014
I haven’t got very much done on the art front over the last week or so, this is primarily because of the school holidays, trying to teach my own children the rudiments of music and drawing has taken up most of my spare time. And then the change in the weather, particularly the temperature of the early mornings before my bookshop opens has pretty much snookered me.
This morning was different, warm and sunny and I got a bit more done to the sketch I started a week ago Sunday.
The rest have been fragments sketched in-between shopping, but nothing much finished apart from indoor ones. The schools go back in about a week and I should have a lot more time.
There really are very few largish independent bookshops of any type left in the UK, my definition of largish being large enough to lose yourself in physically and mentally and my definition of an independent bookshop being somewhere that is of most use to the people who either read a fair bit of fiction, or have an interest in something to the point that they buy books about it.
Useful and interesting as they are, the specialist bookshops and those where pretty much all of the books are aimed at book collectors are something else altogether.
My focus on my bookshop over the last few weeks has been the children’s section, the primary objective here is and always has been, to have a children’s section aimed at children and not adult collectors of children’s books. The main objectives being that it contains books that children want to read and that children can afford, having expanded the children’s section I have been working on the décor and seem to be going in the right direction.
Anyway I have been expanding the children’s section, taking the proportion of space allocated to children’s books well beyond the proportion of overall book sales, interestingly the amount of children’s book sales has increased roughly proportionately to the extra space.
If that didn’t make much sense, a simplified version goes something like this, there isn’t much profit to be made out of an independent bookshop, but what the hell, if you are going to have one you may as well do your best.