Royal Sands Development on the Pleasurama Site Cabinet Decision Tomorrow

 I think in terms of Thanet the mixture of prominent position and size means this is probably the most important mostly residential development in Thanet within living memory.

 An aspect of the very prominent seafront buildings is that on the whole whether they are good bad appropriate or inappropriate they mostly seem to stay put for over 100 years.

 The economic and visual impact of large developments on the seafronts of our main towns is considerable and goes a very long way towards making our towns what they are.

 Whether you agree with this approach or not the meeting to decide the future of this development is to be held in secret and all of the associated documentation is secret too, see http://tdc-mg-dmz.thanet.gov.uk/ieListDocuments.aspx?CId=151&MId=2919&Ver=4

 All we have in the public domain, is the general subject of the meeting, “The Royal Sands Development Agreement.”

Oddly enough the actual development agreement is in the public domain, see http://www.michaelsbookshop.com/pda/ this is a long and complicated document that sets out what the developer should build and when, it also sets out how the council owned land becomes owned by the developer and the council gets paid for the land. 

 I think it reasonable to assume that the object of the meeting is for the council cabinet to decide either on changes to the development agreement (either writing a new one or another variation), or on terminating the agreement altogether.

I am pretty foggy about the legal and procedural ins and outs, but am pretty sure that with the council, it is the cabinet or the full council only, that has the power to change development agreements relating to council owned land.

My guess is that what happens in practice is that the developer approaches the council officers asking for changes and those officers work out a series of options that protect the council’s interests and then put those options before cabinet for decision.   

 Obviously the development isn’t going to plan, as the schedule in the development agreement says that that most of the structural frame of the building should be built by now.

Obviously the hopes and expectations in terms of employment, which were along the lines of about 200 people working on the site during the last year didn’t happen.

Looking at the site at the moment, there isn’t a sense of one stage finished and another about to commence, but much more one of a work in progress abandoned unexpectedly. Holes dug but not filled with concrete, incomplete pillars with leaning and rusting reinforcing rods.

 My guess here is that the situation at the moment relates to finding the money, to continue the building work, of course it could be because they have now reached the area where the developers contractor surveyed the cliff façade and highlighted problems, see http://www.thanetonline.com/cliff/index.htm or their may be some other explanation. The secrecy makes it difficult to know for sure.

Personally from the council’s engineers response I received via Allan Poole I doubt that it relates to the issues I highlighted, to do with assessing the flood risk, sea defence and cliff stability.

Anyone who missed this the two blog posts, the first one my open letter to cabinet members and two of their responses, here http://thanetonline.blogspot.co.uk/2012/03/royal-sands-development-on-pleasurama_23.html and a further post containing the email from Allan and my reply, here http://thanetonline.blogspot.co.uk/2012/03/royal-sands-development-on-pleasurama_30.html

 So having considered all of this I intend explore the financial implications, first I am assuming that my concerns as a local resident won’t have that much in the way of implications here, particularly as most of my concerns were raised first so long ago, way before construction work started on the site about a year ago. I would guess that at that time they had a financial plan, as in the first place they wouldn’t have started the work and in the second place the previous cabinet would have stopped the development from proceeding three years ago, when they had the opportunity, if they thought it couldn’t be financed.

When the site was first put out for tender by the council, one of the most important aspects was that it should have a major leisure aspect as well as a residential aspect to finance this. 

 As an example of what I mean here, another firm that tendered for this site offered to include a swimming pool that they were going to gift to the town on completion of the development. This was Westcliff Park Estates at that time they were building the development opposite the boating pool on the Westcliff in Ramsgate.

The council rejected them on the grounds that they lacked the financial credentials and selected SFP who at that time were purely a Virgin Island company, so the council wouldn’t have had any way of discovering their financial status.

 So I come to what may have caused the developer financial problems, I think idea was that once the first apartments had been sold the money raised was to have been used to finance building more departments.

One problem here is that I think – reading the development agreement - the council were concerned that once the apartments were built the main leisure aspect the hotel wouldn’t be built. This is of particular concern as the hotel is in front of the part of the cliff that the developers contractor has examined and found has problems.

 So at the moment there is a development agreement saying that the hotel has to be built first, that is before the money from selling the apartments starts coming in.

 Another problem here is to do with the flood risk, this isn’t the same as the safety issues that I have been highlighting for years, but relates to borrowing money. During the period between when the plans were first approved and now the site has been designated by the Environment Agency as high risk, in terms of flooding, but because the developer hasn’t been legally obliged to he hasn’t had a flood risk assessment made of the site.

 This would cause a problem for anyone trying to obtain a mortgage for a new build situated in a high risk flood zone, that may make it difficult for the people who want to buy the apartments to get the money to do so. I am not really certain if this would also be a problem for the developer if he needed to find finance, say for example to build the hotel. I do think that it may be a consideration if we ever get to the stage where an apartment reaches a stage where someone can actually buy it.

 In terms of other sources of finance, there is of course the value of the freehold of the site and there may be some way that financing the development could be financed using the land as security for a development loan.

 I may add to this if any further thoughts occur to me and as much of this post relates to the legal and financial aspects of councils and property development development, something that hasn’t figured much in my experience as an engineer, anglican religious and shop assistant, it is highly likely that there is much I have either missed out or misunderstood.     

  The pictures of this part of Ramsgate, click on them to enlarge, are a small proportion of the ones that I used to work out the history of the sea defences in this part of the town.

Having looked at the documentation again, see http://tdc-mg-dmz.thanet.gov.uk/documents/g2919/Public%20reports%20pack,%2005th-Apr-2012%2019.00,%20Cabinet.pdf?T=10 “Heads of Terms Agreement” it looks as though there is the possibility of a new development agreement involved.