More Royal Sands Development on the Pleasurama site in Ramsgate

I have received some more correspondence with Alan Poole over Pleasurama so here it is with my reply.

From: janet woods

Sent: 16 January 2013 18:56

To: cllr-Alan Poole

Subject: Pleasurama

Dear councillor Poole

Your recent reply to my letter in the Gazette spoke of live

agreements,live

planning application and live leases for the site.

Would you be so kind as to explain in lay terms exactly what that

means,and

why you are seeking to make it easier for SFP to secure funding.

Please also explain the sentence "any attempt to unilaterally change the

current situation would most likely be unsuccessful and very expensive"

Thanks

Janet woods

On 21 Jan 2013, at 18:22, "Alan Poole" wrote:

Hi Janet,

Sorry for delay in replying.......I had a bad dose of something last week

and only now getting over it (flu?)....................

SFP currently have a valid Development Agreement (signed 2009) and valid

leases (99 years I believe) for the Royal Sands site...........it is very

unlikely that we would be able to reposes the site even with court action

before 2017 at the earliest..........even then our legal advice is it

would

be very expensive and by no means a certainty.

We cannot unilaterally change the Development Agreement.............any

changes have to be agreed by both sides. This is why we are currently in

discussions with SFP. They wish to make changes to make it easier for them

to obtain funding from the banks to complete the development. Any changes

need TDC agreement so we need to be very careful as to what we

agree...........we have inserted a number of safeguards.......but nothing

is

entirely risk-free.

SFP have an extant (valid) Planning Permission for the

development............we cannot make any changes to the Planning

Permission

without their agreement..........it is very unlikely that they would want

to

start from scratch again as they would need to complete a Flood Risk

Assessment and go through the whole Planning Process.................

As this problem has been dragging on for more years than I care to

remember

I believe most Ramsgate residents would now like to see the site developed

asap.

If SFP can't raise the funds it simply won't get built.............in the

current financial climate there are not hordes of developers waiting in

the

wings to take over.............

I hope this explains the current situation.

Regards,

Alan

From: janet woods 

Sent: 21 January 2013 22:13

To: Alan Poole

Subject: Re: Pleasurama

Hi thanks for reply

I know you were not in control in 2009 when the agreement was made but,

I would like some clarification on a few points

Does the validity of the lease have any conditions?

i.e time for completion of building etc.

Have SFP broken any of the conditions?

You say SFP want to make changes to the agreement, would that include

obtaining freehold of site?

What are your safeguards?

How far has TDC got in building a legal case for recovering the lease?

has a realistic assessment been done?

Do you agree that TDC's collusion with avoiding a flood risk assessment is

irresponsible?

Yes I agree that all would like to see the site developed, but not with the

wrong development, wouldn't you rather wait until 2017 for the right

development, rather than have the wrong development in 2015 or whenever SFP

can find the finances ?and that might be completion of building ,then more

time for selling and for retail to be in place

Would you concur that...the key to it all seems to be SFP need the freehold

to get the finances in place?

Surely if they can't finance the development 14 years later!! they have

defaulted on the agreement.

I believe that TDC are wrong to consider selling the freehold to SFP, when

SFP have no previous development experience and obvious lack of funds.

What would the consequences be for TDC, should SFP sell the freehold on

without completion of the building on the site?

Janet woods

From: "Alan Poole"

Date: 22 January 2013 13:41:42 GMT

To: "'janet woods'"

Subject: RE: Pleasurama

Hi Janet,

The details of the new proposed Development Agreement are commercially

sensitive and at this stage I am not legally allowed to divulge them.......

once (if) the Development Agreement is signed I will make it public.

All Councillors have received the information on 'pink' .............which

they are not legally allowed to divulge to the public.

As far as I'm aware SFP are not in breach of any conditions.

TDC does not have any grounds for starting a legal case to recover the

leases.........we would be laughed out of court!

TDC are not colluding with SFP to avoid a 'Flood Risk

Assessment'..............the FRA Rules changed AFTER the Planning

Application was approved and cannot be applied retrospectively. Requesting a

FRA would serve no purpose other than to delay the development and add

further to the costs...........

For clarity SFP are not legally obliged to complete a FRA in spite of what

Michael Childs and Ian Driver are claiming.

My understanding of the FRA rules is that they basically do not allow

residential accommodation on the ground floor in a flood risk

zone...............the Royal Sands development does not have residential

accommodation on the ground floor..............

It is proposed to transfer the 'freehold' to SFP ONCE they have proved to

the Council's Section 151 Officer that they have secured sufficient funding

to complete the whole development and they have signed up an operator for

the hotel...........we also have to carry out 'due diligence' procedures.

In the proposed Development Agreement SFP will have to pay upfront for the

'freehold' (to TDC) before the new Development Agreement is signed. In the

current Agreement (2009) they would have gained the 'freehold' on

completion.

It is estimated that it will take 18 to 24 months to complete the project

once building has restarted.

If they sell-on the 'freehold' the new buyer will be legally obliged to

complete the development as per the Planning Permission and the Development

Agreement...........

I'm happy for you to pass this info to Michael Childs and Ian Driver as they

are both asking the same questions............

Regards,

Alan

Initial thoughts

1. What were the original conditions that Alan states SFP are not in breach of, does anyone have a copy?

2. Presumably it is the officers who have put them on a pink form,  but given there is no other developer in the frame, how can they be commercially sensitive? Politically sensitive seems more likely. Is it worth an FOI?

The effect is we cannot scrutinise the terms of the Development agreement, before it is signed, and that will be too late

Janet et al. The original conditions that Alan is talking about, development agreements and leases can be found here http://michaelsbookshop.com/pda/ series of links to the documents at the top of the page.

I think the key problem with them is that they weren’t well written, particularly in terms of resolving the sort of problem we have now, where the developer doesn’t appear to have funding to proceed.

I think legally the situation is that the developer is obliged to have finished the development by 2017 and the council would need to show that the developer couldn’t do this in order to get the site back without risking litigation, where the developer SFP and the contractor Cardy took legal action to recover the monies they have spent on the development to date.

The financial arrangement for the 2009 variation were roughly that the development would cost £22m paid for by Wetmore the hotel company putting up £5m, Cardy Construction putting up £1.5m, and SFP getting a bank loan for the rest.

I think the developer:

Contributed £600,000 to the new road layout, the layout was apparently insisted on by KCC but obviously doesn’t make sense in several ways, the roundabout at the pavillon end being far too big and now having metered parking all round it. The roundabout and bus stop at the other end, for PSV access via the sloping viaduct that would probably not be able to take the load, for the expected life of the development.

Contributed £100,000 to the main cliff façade coating and repair contract the rest the total was about £1m was paid for by TDC. Part of this repair failed almost immediately and had to be repaired and paid for by TDC. TDC had another survey around the beginning of 2012, this list a number of repairs and work that wasn’t done at the time of the first contract, my guess is they will cost between £100,000 and £300,000 although this would be much more if they underpin the parts that don’t have proper foundations. The ongoing key problem here being that the space, 4metres, between the back of the development and the front of the cliff, would mean any repairs to the cliff, once the development has been built, would have to take place in what is a 22 metre deep canyon 4metres wide; possible, but very expensive.

The other expenses incurred were the surface drain, I think this was subcontracted by Cardy Construction, cost about £800,000 and I don’t know if this cost has been passed on to the developer.

Then there is the work that Cardy Construction did on site, the three men and a digger, this was quite a surprise to me as the MD of Cardy Construction told me that first phase would be a pile boring team and the foundations would only take about six weeks to complete. A key issue here is that the foundations that have been completed are not screwed to the bedrock, but are sitting on the old sand beach, with no EA accredited sea defence holding the land there in place.   

The council say they own the sea defence there, so guess they would be responsible for any maintenance, they say it dates from 1860 and the have no plans, surveys or maintenance records relating to it.

I guess the developer also incurred planning costs, I believe there were about seven sets of plans, mainly because of the height issue, I don’t think the architects ever managed to produce plans that resolved this properly, they are however the only plans on the council’s planning website and therefore must be the only approved plans. I have heard that the developer has now engaged a different architect to produce the detailed construction plans, so I don’t know if the various plans were paid for.

We then come to the flood risk, when the first set of plans were produced they didn’t show any definite height above sea level for the base of the building and appeared to show a pedestrian escape from the development to the cliff top.

As the thing dragged on and attempts to get the top under the cliff top, it became apparent that the bottom would be fairly low with regards to flood risk, particularly in a tidal surge storm that we get in Ramsgate about every 50 years.

I had some correspondence with the EA in order to get them to say what they thought a safe baseline would be, although this was based on a pile driven foundation plan that would be fairly slow to collapse in the event of the 1860 sea defencet failing during a tidal surge storm.

Here is the letter they sent to the developer and the council about it http://michaelsbookshop.com/ea/id2.htm I would say that the situation with this is that building the development without the fra against EA advice, while within the letter of the law, isn’t likely to attract serious funding. I guess it would also make it very difficult for anyone trying to get a mortgage to buy one of the apartments as new builds on high risk flood zones just don’t normally exist.          

I think in the first instance you need to plough through the stuff I have written about Pleasurama over the years, most of it should come up from this link http://thanetonline.blogspot.co.uk/search/label/Pleasurama%20development and then older posts link at the bottom of each page.

Fundamental to all this is that if we move to a situation where the council tries to get out of the agreements, then we come to the mistakes made by both the council and the developer. These are best summarised as both parties considering that they were building a development on an ordinary flat site away from either the cliff or the sea. I think the council wanted to sell the site as this and architect designed a building that would probably have worked well enough for this sort of site.

In a general sense it is very unusual to build residential developments on a narrow band of land, in this case reclaimed beach, between an unsupported chalk cliff and the sea, so there aren’t really comparisons. The buildings further along Marina Esplanade are formed of arches that act as a cliff support structure, it should be understood that the concrete façade behind the Pleasurama site is not designed to be a cliff support structure. 

Regards Michael.