Sunday 26 July 2015

Council's Bridge Park deal with developers indicates little affordable housing & no transparency

The site including Unisys, Bridge Park, Technology House and car breakers
Last week the Planning Committee discussed how to increase the amount of affordable housing provided by developers to meet the 50% affordable target and to make the issue of Viability Assessments mores transparent LINK.

Tomorrow the Cabinet will discuss a report LINK on the Unisys-Bridge Park-Technology House development which admits that the amount of affordable housing will be much lower than 50% and where an Appendix with a 'sliding scale' of affordable house is 'restricted' and not available to the public.  The scheme consists of c500 homes, hotel and leisure centre.

The scheme is rather similar to the Willesden Library development where the Council gets a piece of infrastructure in exchange for providing land. As readers will know the Willesden Green flats contain no affordable units and were sold to overseas investors by Singapore agents. In exchange we got a small 'Cultural Centre' which by coincidence is due to open tomorrow. The community lost a good local bookshop, a cinema and an open space.

At Bridge Park a new leisure centre will be built with a much needed swimming pool, but other features of the current centre will not be provided.

Among the lost facilities will be the function hall, small business units, nursery and meeting rooms for faith groups.  PLIAS Resettlement , a community based not for profit organisation that provides services primary targeting offenders and ex-offenders to enable them to integrate them back into society, will lose its base.  They join Stonebridge Adventure Playground and the Welsh School that lost their premises through the redevelopment just up the road. The report admits that despite a pledge to Cabinet in June 2013 to help the nursery find new premises, that has not been done.

The report's Equalities Assessment claims that a positive aspect is:
With a high young population, the provision of new housing in the local area which the population could take advantage of is a positive in that it provides the opportunity for young people to move out of their family home bit also provides the opportunity to stay in the local community.
Even the officers seem to recognise that this might be seen as disingenuous:
However, it is not known if new housing would be affordable, especially given that Stonebridge ranks as the lowest ward in terms of median household incomes.
Of course it won't be affordable, which is presumably what your secret Appendix says!

Another aspect that might set the noses of ex-Tax Inspectors Dan Filson and Philip Grant twitching, are the developer and finance details.

The ex-Unisys site is owned by Harborough Invest INC (Harborough) to whom General Mediterranean Holdings SA (GMH) are a parent company).  The Council will sell part of its own site (Technology House) to Harborough/GMH.

In June 2013 the Cabinet agreed to pursue this option with a different subsidiary company of GMH: 'Tucan, a special purpose vehicle proposed for the purposes of this development'.  GMH now say that Tucan Investments is no longer in the picture and the Council state 'GMH have explained that it would be sensible for the landowner to be party in the agreement rather than a new development vehicle.'

The main report Financial Status Checks (4.6) states
General Mediterranean Holdings SA and Harborough Invest Inc are both in overseas ownership and not registered at Companies House, As such the process for carrying out financial checks on these companies cannot be completed in the normal manner and the required financial information in an appropriate format is awaited. Finalisation of negotiations and entering into Heads of Terms with these companies will be subject to confirmation of satisfactory financial standing.
Another aspects is of course ensuring that the Council (or rather we residents) are getting value for money. The reports says (3.6):
Since the June 2013 Executive, negotiations with GMH have been ongoing through their agent Nick Shattock Real Estate (NSRE) (now Chainwork Capital) [another change of name] to ensure that the Council receives best value for its lands. As a result the Heads of Terms have changed and it is proposed that the Strategic Director of Regeneration and Growth concludes negotiations and enters into Heads of Terms with GMH and Harborough Invest Inc in substantially the form set out in Appendix 3 of this report [which is restricted].
The Council employed Deloitte LLP in June 2014 to see if the disposal of their land to GMH represented 'best consideration' - Deloitte concluded it did not. the report goes on (4.4)
Deloitte LLP re-engaged with GMH, via their agent NSRE to seek in principal agreement to the various development costs, revenues and timescales. This exercise resulted in the Council receiving a revised offer from GMH as at September 2014. as a result of the discussions between DRE and NSRE, Deloitte LLP conclusion was that whilst they did not necessarily agree with all of the points raised in the NSRE offer letter, the Revised GMH offer for the Land at Bridge Park was above that of Deloittee revised opinion of value (Appendix 4) [yes, restricted of course].
The report goes on (5.6)
Through pursuing a deal with GMH the Council is not releasing the option of disposing of the Council land to the market and not giving other organisations the chance to bid for the opportunity if this had been available  on the open market. The land price has been robustly tested in order to align with best market price and external consultants to Brent have undertaken detailed development appraisal, valuation and sensitivity resting work confirming the GMH & Harborough proposal to represent best value.
The consultant's report has not been published.



Anonymous said...

As Martin suggests, this article did attract my interest.

When offshore companies are involved, that will always raise suspicions about who is really behind them, and whether tax avoidance may be involved, although in this case you can read a little about GMH on Wikipedia:-

'The General Mediterranean Holding (GMH) is a financial holding company established in 1979 in Luxembourg City, in southern Luxembourg, founded by Anglo-Iraqi businessman Nadhmi Auchi.

GMH is a diverse business group with activities in Banking & Finance, Real Estate & Construction, Hotel & Leisure, Industrial, Trading & Pharmaceuticals, Communications & IT and Aviation.'

The (publicly available) details do not say in which overseas territory Harborough Invest Inc. is incorporated, or resident for tax purposes.

By chance, I have come across GMH's "agent", Nick Shattock, before, when I was an Inspector of Taxes, and he was a director of Quintain Estates and Developments Plc (having previously been a partner in a firm of City solicitors). That information is on public record, and (of course) I cannot disclose anything which happened when I was responsible for dealing with the Quintain group's company tax affairs, because of Civil Service confidentiality.

As a (past) director of Quintain (the developer behind Wembley Park), it is likely that Mr Shattock has already had dealings with Brent's Strategic Director of Regeneration and Growth, Andy Donald. The report to Cabinet proposes that negotiations over the "deal" between Brent and GMH should be left in the hands of Mr Donald (as the "deal" with Galliford Try over the Willesden Green Library Centre redevelopment was).

Persuaded? Definitely not!

Philip Grant.

Anonymous said...

Let's be honest, if a private company was run the way Brent Council is, it would go out of business in no time.

Anonymous said...

Nonsense, a private company that was run like Brent Council would ensure that those at the top (Directors and shareholders) were looked after handsomely while shitting on their customers and lower level staff. And they would still survive.

Anonymous said...

Why would a public body in the uk enter one to one discussions with an offshore outfit with opaque financial background. Also how can the Director in charge of planning be delegated he power to agree the deal with GMH is there a conflict here. Has Mr Shattock at QED not already had major dealings in the pat