The months and years roll by with this
one and my updates are now so numerous that I am not entirely
sure just what I have already covered.
I guess most people in Ramsgate will have
noticed that around the beginning of this year all work stopped
on the site, this happened very suddenly in the middle of half
completed work, giving all the signs of the money running out.
My understanding of the situation at the
moment is that the developer is seeking a new and different
agreement with the council in the hope of attracting some
funding, so the development can be completed.
The idea being that the council sell the
freehold to the developer for about one and a half million now
and about the same, as a proportion, as the different parts of the
development are completed and sold.
What this would mean is that the developer
would own the freehold to the site and could use it as security
to attract funding.
Over the last few months the council and
the developer’s lawyer have been thrashing out the phrasing of a
new development agreement that will be put to the council’s
cabinet, and they will either approve it or not.
From the point of view of the ordinary
person, who has Ramsgate’s interests in mind, the main problem
here is one of transparency, as everything about this
development seems to happen in a shroud of secrecy, it is very
difficult for local people to have any input until it is too
late and the delays start again.
In
practical terms there are aspects of the plans for the
development that don’t make any sense at all and in terms of the
work completed I would say this is the case too.
I
will leave out the more technical aspects like flooding and the
cliff that I have covered before and stick to something that
most people should be able
to grapple with, the roundabouts at each end of the site, I will
even leave out the obvious issue of laying the blocks that form
their surfaces on lose sand in an area subject to wave
overtopping.
These
have both been built at considerable expense to the developer,
so a reasonable question seems to be, what are they for?
At
the pavilion end the roundabout is so big that it now has
parking spaces all round it and even the largest vehicles don’t
seem to have any difficulty turning with all the cars parked
round it, at the other end of the site is another huge
roundabout that seems to have been designed with the turning of
juggernauts in mind, yet at the top of the access hill are signs
saying no big vehicles.
Anyway
while the council have been participating in the generating his
new agreement I have been asking them some questions and after
some time am getting their answers. This process started in the
middle of April, you have to appreciate the council don’t answer
questions quickly.
I
guess there are two aspects to asking these questions, one being, to try and find out what is going on and the other being to try
and make officers think about some of the pitfalls that may lead
us into further delays.
So
first of all I will try putting up the questions and answers in
differed colours so it is easier to follow, mine in blue and the
council’s in red.
Question
1 16.4.2012
1 Do you consider the changes in the plans
since the initial application was granted to constitute
material change? Examples would be the removal of the gull
winged roof and the moving of the road from through the
building to between the cliff and the building.
Answer from Corporate & Regulatory
Services Manager 21.5.2012
1.This is a request for an
opinion, not a
request for information.
You should refer this question to the Planners.
My Follow up questions/
comments 29.5.12
1 My understanding is that The Royal Sands
was the responsibility of the major projects officer and
when he left the council I wasn’t directed to another
officer, could you please direct this question to the
correct officer? Please further note that it is my
understanding from discussion with the previous major
projects officer that the council acted illegally in not
requiring resubmission due to material change, which as the
council’s solicitor may require your further opinion.
Answer from Director of
Operational Services 20.6.2012
1. Changes that are submitted in the future
relating to the Royal Sands site will be assigned to a
planning officer at that stage, but at present with no
current outstanding variations there is not a specific
officer dedicated to the site.
Any previous variations have been agreed and
these are all published on the UKPlanning website. The
treatment of these variations was in accordance with the
requirements in place at that stage. Any further variations
that are submitted will be processed using the current
requirements.
Question 2 16.4.2012
2 Do you consider the sale of the site
freehold to be subject
to the asset
disposal process and associated consultation
process? I understand
it is the council’s intention that the leases be surrendered
and the development
agreement be revoked prior to the completion
of a new development agreement and freehold land transfer.
Answer from Corporate
& Regulatory Services Manager 21.5.2012
2. This is also a request for an
opinion, not a
request for information. However my opinion
is that the proposed sale
of the Council's reversionary freehold interest of the
Royal Sands development site is not subject to the Council's
Asset Disposal process.
My Follow
up questions/ comments 29.5.12
2 When I
discussed this issue with you, you assured me that the
reason there was no need for this sale to go to asset
disposal was that the eventual freehold sale was part of the
existing and previous development agreement and variation. I
have subsequently read both documents and can find no
reference to any predetermined sale of the asset, could you
kindly give me the details of where this information appears
in either the development agreement, variation or leases?
Answer from Director of
Operational Services 20.6.2012
2. The provisions for the transfer of the
asset lie within the Freehold Transfer Provisions under
Schedule 4 of the current development agreement, and are
referenced from clause 7 within the main agreement.
There was no question 3.
Question 4 16.4.2012
4 Do you
consider it would be possible to obtain borrowing based on
the security of residential building land or new build
residential dwellings, on land that is designated as high
risk flood zone by The Environment Agency? This is both in
respect of the developer obtaining finance using the freehold
as security, in the immediate future and at the point when prospective buyers
attempt to obtain mortgages to buy apartments and the
monies obtained
from the sale of apartments is required for further funding
of the development.
Answer from Corporate
& Regulatory Services Manager 21.5.2012
4. This is another request for an opinion. In
any event, as a lawyer I am not a competent person to answer
this question.
My Follow up questions/ comments 29.5.12
4Obviously the whole viability of this
project depends on how the forward funding functions, and I
am concerned that the council may be intent on proceeding
once again on a fundamentally unviable project. I am
particularly concerned that you say you don’t know the
answer to this question, the only inference I can draw from
your answer is that you are happy to proceed with the
project regardless of its viability. Can you please confirm
that you are supporting this project without ensuring that
the apartments will be mortgageable?
Answer from Director of Operational Services 20.6.2012
The viability of the project is a key issue
for the council as its completion is primarily dependant on
funding from a significant third party to add to the £5
million already spent by the developer. The issue for third
party funders has been the specific previsions of the
current development agreement, but the practical viability
of the project and its ability to provide a return for the
external investment has does not seem to have been a
significant issue.
From the council’s perspective the aim has
been to try and reconcile the position of external funders,
but do this in a way that does not compromise the original
aims of the development agreement (different route same
result). As such any change to the current development
agreement will not take place without a clear commitment that
an external lender will be funding the developer to complete
the development, and this in turn is dependant on their due
diligence processes about the achievability of the correct
return on their lending. Clearly the key component of this is
driven by the saleability of the residential units, but this
element does not appear to be a problem given the amount of
interest the units have already generated with the developer
from prospective purchasers.
Question 5 16.4.2012
5 What provision do the council have in place both in
terms of the monies they have received from SFP to date and the payment they
would receive for the freehold, with respect to those monies being legitimately
sourced particularly with regard to money laundering legislation? I note here
that at the previous cabinet meeting to determine the development agreement
16th June 2009 agenda item 17, documents were produced showing the
sources of legitimate funding at that time, Cardy Construction and Wetmore
Investments. At the moment SFP Ventures UK Limited, have Total Current
Liabilities of £1,982,199, Total Current Assets of £1,981,340, Cash at Bank of
£4,656, which gives a negative net worth of £-859.
Answer from Corporate & Regulatory Services Manager 21.5.2012
5. We have already advised you that all funds
received by
the Council have been received
through
a UK Clearing Bank so the Council is satsified that all such
monies have been
legitimately sourced.
Question 6 16.4.2012
6 With respect
to the hotel, which would be in front of the part of the cliff
facade investigated by the developer and reported as
defective, what investigative work has the council undertaken
and what associated documentation do the council hold, to
prevent the developer using the facade condition and their
associated report relating to this part of the facade, as a
reason for being unable to construct the hotel.
Answer from Corporate and Regulatory Services Manager 21.5.2012
6. You have asked this question on a number of
previous
occasions and I would confirm the replies previously given.
My Follow up questions/ comments 29.5.12
6 I think you
may have missed my point here, which relates to the new
heads of terms where the hotel no longer has to be
constructed first. I have concerns that the developer
failed to pursue or continue the survey they started on
this part of the cliff, see Cardy’s cliff facing and
condition report 19th March 2010, and am concerned that
the developer could at the point of completing the
apartments use this as an excuse not to build the hotel.
So what have the council done to ensure this doesn’t
happen?
Answer from Director of Operational Services 20.6.2012
The issues
raised by Cardy’s report dated 19th March
2010 was addressed through a subsequent site visit which
included council officers and Jacobs Babtie. The council
has covered all the issues in the report, and except for
some minor issues that were dealt with there are no
outstanding problems to resolve.
We keep all
our significant structures under observation and
undertake repairs and refurbishments where these are
required. This wall is no different.
On this basis
it is considered by the council that this matter was
resolved in 2010 and cannot be used as a way to prevent
the construction of the hotel.
Question 7 16.4.2012
7 Do the council hold any track record for SFP Ventures
UK Limited, or their directors, showing that they have satisfactorily completed
any substantial development? My investigations show that this company was formed
in 2006, no accounting activity since that time suggests an active development
company, the director has a number of other dormant UK companies with no
positive net worth. My understanding is that SFP UK was formed after complaints
were made that the council were dealing with an exclusively offshore Virgin
Islands company.
Answer from Corporate and Regulatory Services Manager 21.5.2012
7.The Council hold no relevant information.
Question 8 16.4.2012
8 With respect to the current contractor, Cardy
Construction, has the council received any recent letter of intention to proceed
as main contractor, or a re affirmation to invest financially in the
development? The site at the moment has the appearance of work stopping suddenly
in the middle of the stage, which is constructing the support pillars for the
transfer slab. There are partly completed pillars, open holes awaiting concrete
and so on. The only inference I can draw from this is worked stopped with unpaid
money owing.
Answer from Corporate and Regulatory Services Manager 21.5.2012
8. The Council confirms that it holds relevant
information
which is subject to an obligation of confidentiality. The
information is
therefore withheld pursuant
to Section
41 of the Freedom of Information Act 2000. This is an absolute
exemption so I
am not required to apply a public interest
test in
making the decision to withhold the information.
Question 9 16.4.2012
9 Are you reasonably convinced that the council are
covered properly in terms of both, duty of care, and viable insurance cover with
respect to an incident involving failure of the cliff façade or sea defences? We
have discussed the condition of both on several occasions, most recently the
unfortunate combination of shallow foundations on sand and the 1860 sea defence
that the council has no record of inspecting, maintenance or even holds plans
for.
Answer from Corporate and Regulatory Services Manager 21.5.2012
9. This is a further request for an opinion, not a request for information. However
my
opinion is yes.
Question 9 16.4.2012
10
Has the council made any estimate of the ongoing costs related to maintaining
both the sea defence and the cliff to a standard suitable to their proximity to
a major residential development? I have tried to find a similar situation in the
UK where a large modern residential development has been built between an
unsupported chalk cliff and the foreshore, for comparison purposes and haven’t
managed to. If the council have found anything similar it would be helpful.
Answer from Corporate and Regulatory Services Manager 21.5.2012
10. The Council holds no relevanyt information.
That’s the end of the questions and answers for now,
obviously some of the answers are fairly inadequate so there will be more
questions.
An example of this may help, so I will try and chose one
that isn’t in any way controversial, take the end of the last answer to
question 4 “Clearly the key component of this is driven by the saleability of
the residential units, but this element does not appear to be a problem given
the amount of interest the units have already generated with the developer from
prospective purchasers.”
With the number of reserved apartments going up and
down and drifting around 15 out of 109, some could interpret this as the
problem.
For me one of the most significant questions that I didn’t ask
directly was, why when the officers were against continuing with this three
years ago are they now recommending it to cabinet for approval?
I have hints at answers to this one, mostly relating
to the developer possibly taking them to court to recover the £5m he says he
has spent to date, if the council should decide to take the site back and either
have a go with another developer, or just tarmack it over and use it for
leisure and parking.
I
will complete this later as am having technical problems