Cabinet member and mayor of Ramsgate enters the dialogue about The Royal Sands Development on the Pleasurama site in Ramsgate.

In my previous post http://thanetonline.blogspot.co.uk/2012/12/sunday-ramble-about-skinny-dipping-in.html   I highlighted the fact that I hadn’t had any response about the recent additions to the ongoing Pleasurama saga from my ward councillors who are also cabinet members.

Cllr Dave Green responded in a comment there, here is what the said.

“Michael

I've scanned back through your emails and apologise for not replying. You seem to be asking me to comment on what happened in 2009 under the previous Conservative administration.

I'm afraid that I do not have the detailed knowledge to do your questions justice, except to say that the agreement reached then was aginst officers advice, and that advice now is that the development agreement effectively gives the developer until 2017 to complete.

In a way, your questions are now largely irrelevant (except as comment on the previous administration)as they largely focus on due diligence around the source of the finance behind the developer. We are now in a new situation, where the developer must produce a substantial sum in cash, and submit his source of funding for examination by the Council both for the main site, and for the building and fitting out of the hotel. Only if the Council Officers are absolutely satisfied on all counts will we proceed.”

It was easier for me to reply to him in this new post, due to the length and the links in my reply, here it is.

Dave the main problem for me is that this whole issue has the feel of mistakes under both administrations, where no one will answer simple and reasonable questions, the key issue for me is that the development should be reasonably safe for people to live in.

I would say that the recent mistake under this Labour administration was not including a flood risk assessment in the conditions of this new deal, where the developer asked for more financial concessions.

Of course there may be a good reason for doing this, but as I wrote to the cabinet members asking them to do this prior to the agreement and didn’t get a reasonable reply, I don’t know what that would be.

Justifying building on a high risk flood zone without a flood risk assessment would seem very difficult and in the light of The Environment Agency letter http://www.michaelsbookshop.com/ea/ seem impossible.

Like everyone else in Ramsgate I would like to see the site put to some use, but not at any price and not with a development that is fundamentally blighted from the outset becase it is a new build without a fra.

I notice you use the word “developer” when describing SFP, as they never appear to have developed anything, perhaps speculator would be a better word.

Now when it comes to the financial arrangement this isn’t my field of understanding and as I was lead to believe that both officers and councillors of both parties were experts in this field, I made the act of faith that they knew what they were doing and this area had been covered properly.

All along the line my take is that the council has been protected by retaining the site freehold, with the ultimate sanction that if the developer/speculator fails to deliver the council get the site back. This has been backed up by decreasing amounts of bond so that the council would have the money to finish off the development if anything went wrong. 

As to the value of the site, this appears to be somewhere in the region of £10m to £20m, like me you know various local developers, who have actually bought land locally and developed it, so you can ask their opinions on the site value, which is how I arrived at the figure.

Now my understanding of the secret deal reached between the cabinet and the developer/speculator is that the council sell the developer/speculator the site for £3.3m, I am not sure if this figure includes the £1m currently held by the council to safeguard it if the developer/speculator fails to deliver.

I do know that the council has spent nearly £1m on cliff repairs and having surveyed the cliff wall – probably because of the fuss I have made about it – they are about to embark on some more expensive repairs.

I guess a major problem for me is that I am concerned that the cabinet having secret negotiations with the developer/speculator is, are they able to do this properly, both in terms of not getting us into more problems over the financial side and not having more years of derelict building site.

Living in the Eastcliff area yourself I guess you will be only too aware of the problems there, which can’t have been helped over the years by having the prime site in the ward derelict.  

Going back to the previous council involvement under Labour.     

The project that was initially proposed in 2002 was financed by what appeared to be a Swiss bank, Société Financière Privée S.A. (SFP), via SFP Venture Partners Ltd and supported by the brewer Whitbread as set out in this document http://www.michaelsbookshop.com/blogpicts10/id5.htm

I think what may have happened here is that none of the councillors or officers grasped the difference in meaning between the French word Financière and the French word Bancaire.

My understanding is that Société Financière Privée S.A. (SFP) was licensed as a Swiss stockbroker in 1999 and was trading as such in 2002, so wouldn’t have been able to act as a bank then and fund the development.

I guess as the planning application was put in and some deal was done with the developer/speculator by the then Labour controlled council, you will be able to access all the information about what happened.

It remains very unclear whether Whitbread ever had any commitment to this development, or if they just expressed an interest, but at some time near the beginning I know they disassociated themselves with the project.

I also know that around this time it was discovered that SFP wasn’t the ventures part of a Swiss bank, but a Virgin Islands Company and obviously not connected to the Swiss bank, as the Swiss bank didn’t exist.

Just after this time I and several other concerned residents investigated this Virgin Islands Company, in the first instance to see what other developments they had built. We soon discovered that BVI companies were mostly associated with money laundering and BVI companies didn’t have to produce any paperwork, so discovering what they did was impossible.

So I would guess that back in 2002 the council officers and the Labour group did something to check on this company and their ability to deliver, there is also the problem with it being a BVI company that there is no way of knowing who was behind the company, so it could even have been council officers or councillors.

So in the first instance I would like you to revisit this initial arrangement and tell us what the basis for proceeding with this developer was, who the council was dealing with and what else they had developed that would have given the confidence to proceed.

On to why I would like you to revisit the decisions by the Conservative cabinet to continue with this developer, which mainly relates to the information supporting the development agreement and associated variation, see http://www.michaelsbookshop.com/pda/

Obviously if the supporting information wasn’t correct then this casts doubts on the validity of those documents. 

I have seen some of the documentation but not all, and the documentation I have seen supporting the 2009 variation and the decision to proceed with a substantially less guarantee, seems to have a similar problem with a non existent Swiss bank to the 2002 documentation.

In 2003 Société Financière Privée S.A. (SFP) was granted a banking licence so it changed its name to Société Bancaire Privée S.A. (SBP), it continued to trade as a bank – apart from a period when its licence was revoked – until mid 2009 when it got into difficulties, was taken over and became Banque Profil de Gestion (BPDG)

Then at the end of 2009 SFP came back asking for more time and reduced financial guarantees, most of the documentation seems have been based on supporting documents from Société Bancaire Privée S.A. (SBP), a bank that as far as I can see no longer existed.

Now with the officers appearing not to have checked the fundamental point of whether or not the developer/speculator’s bank actually existed at the time two fundamental decision were made, you are saying that the decision you intend to make will be based on officers being satisfied about the developer’s finances.  

You are also I think supporting that this decision should be carried out in secret with all of the supporting documentation kept secret, this obviously hasn’t work too well in the past and I guess the people here in Ramsgate would like to know why you feel it should work any better now. 

As a further thought, officers tell me that they take any money paid via a UK bank as being ensured against money laundering, which in view of today’s news http://www.bbc.co.uk/news/business-20673466 leaves me somewhat at a loss for wwords.  

Another reason for replying with a new post was the opportunity to include the watercolour of Ramsgate Harbour painted by Joseph Mallord William Turner around 1825, courtesy of The Tate Gallery London.   

 
A point about development design highlighted by the picture – you may need to click on to expand it – is that the lighthouse shown in the picture was built too near the end of the east pier and despite the wooden structure built around the end of the pier, it continued to rip the rigging and spars off of vessels entering the harbour. Obviously in the end the only course of action was to demolish it and build the lighthouse we have now, further away from the end of the pier.