The Long Read: Otterpool Park Update.

Shepway District Council in report C-17-76 – Delivering Otterpool Park – make it clear at Para 1.3 that there is now a 3rd major party interested in securing land within the 617 hectare boundary known as Otterpool Park. It states:

• “In September 2016 the Council and Cozumel entered into an initial promotion/collaboration agreement. This agreement envisages that the parties collaborate in assembling the site, securing planning permission and then entering into further agreements relating to the development of the site… Its landowner partner, Cozumel Estates Ltd owns or controls the majority of the rest of the land in this area and another major party is seeking to acquire further land in the area.”

Now from the map, the Business Hub  will cover Hillhurst Farm; which is owned by William Hurley of Pedlinge Farm, we expect he might not be to happy about losing good agricultural land to concrete and possibly by compulsory purchase.  And that road to nowhere we wrote about back in Oct 2016 now looks like it will eventually go somewhere. So the area below, if the SDC map above is reliable, is where the town centre, the business hub and the expansion of Westenhanger will take place. Oh and don’t forget Channel ports might extend there lorry park, all very convenient for them if allowed.

The report goes onto say that some of the negotiations to purchase land by SDC has been protracted and that at the Cabinet meeting on Wednesday 31st Jan agreement in principle is sought by Cabinet to use Compulsory Purchase powers, if necessary.

The report goes onto say that SDC “Optimise the financial benefit from major developments in the shorter and medium term”. However, the Council have a “medium term revenue shortfall” according to Corporate Director Tim Madden (pictured) the s151 and the man in charge of the money at SDC. Now to be fair to SDC, they do say in the Report they wish  “To optimise the resources from the garden town to provide a financial benefit for the whole district.” However the Council goes onto say that Otterpool Park is NOT about “profit per se;” as “all the money that arises from its involvement in Otterpool Park will be used one way or the other for the public benefit.” Yet SDC do NOT state how the public will benefit, that is left to be dealt with in the future. Should we the ratepayers NOT know how we we will benefit from Otterpool Park now, or at least have an outline of how we might benefit?

We know that £3.6 million has been set aside for land acquisition and that this amount was agreed by Cabinet on the 8th June 2016 behind closed doors. Also SDC were to attend MIPIM in Cannes to pimp Otterpool Park. However, that will NOT happen now as the Department of International Trade will attend MIPIM to promote Otterpool Park on SDC’s behalf. So no jollies for Cllr Monk et al at taxpayers expense. Our hearts bleed, NOT.

Now how are SDC going to deliver Otterpool Park? Well they say in Report C/17/76 “It is considered appropriate now to consider the options available to the council (and its partners) to enable the delivery of the project and the achievement of its objectives.” The report puts forward seven proposals which are:

• The council and other land owners each develop out their own parcels of land within the site.

• The council develops the site by entering into a sale and purchase agreement to buy Cozumel’s land interest (and possibly the interests of other parties)

• The council does not develop but sells its land interest to another party free of conditions and development obligations.

• The council sells its land interest to another party subject to a development agreement.

• Council sells its land interest by means of a conditional land sale agreement with an ability to re-acquire land in the event of failure to meet milestones.

• A contractual joint venture agreement.

• A corporate joint venture vehicle – either limited liability company (limited by shares) (“Ltd”) or a limited liability partnership (“LLP”)

The report then goes onto set out the pro’s and con’s of each of the proposals. Then at para 5.2 of the report SDC state a “corporate joint venture option represents the best way to achieve the objectives.”. SDC have consulted with Cozumel Estates Limited “and they too favour the corporate joint venture approach.“

So at the Cabinet Meeting on Wednesday 31st Jan 2018, Cabinet members will vote on what option to take. “If members agree that the corporate joint venture option is the one to pursue then further detailed financial, commercial and legal advice, including state aid, must be sought before the council commits itself to entering into such an arrangement.” A corporate joint venture vehicle – either limited liability company (limited by shares) (“Ltd”) or a limited liability partnership (“LLP) is it appears the Council preferred option

Tenders will be sought for the advice which includes legal, financial and commercial advice and SDC alone will if Cabinet agrees spend up to £350,000. The amounts are broken down as follows:

• Legal advice: to include consideration of alternative forms of entity; governance arrangements; funding mechanisms; procurement; contractual terms of the entity and future Development Agreements an strategic planning legal advice; stamp duty; legality/ powers to act; due diligence; (est up to £180,000)

• Financial advice to include: VAT, Corporation tax and SDLT; borrowing/ treasury; financial legal; financial modelling; independent review; loan agreements (est up to £100,000).

• Commercial and delivery: viability assessment; soft market testing; outline business case preparation (est up to £70,000).

However setting up a corporate joint venture vehicle – either limited liability company (limited by shares) (“Ltd”) or a limited liability partnership (“LLP) is fraught with difficulties especially using a LLP. There was a Judicial Review case heard at the Royal Courts of Justice on the 25th & 26th of Oct 2017 by Justice Ouseley CO/3713/2017 between

Gordon Peters (On behalf of the Stop the HDV Campaign Group) Claimant -and- London Borough of Haringey -and Lendlease Europe Holdings Limited – Interested Party.

Ground No 1 of Mr Gordon Peters case was:

• Is it lawful for the Council to set up the HDV as an LLP (rather than a company)

• Would any constitution of a Joint Venture vehicle set up by SDC as an LLP be unlawful?

Now the decision for this case has not been handed down yet, so we think it an inappropriate use of money for SDC to explore an LLP avenue before the decision has been handed down. Far better to wait for the decision, then explore what may or may not be possible.

SDC have drawn up a diagrammatic picture of what a Joint Development Company may look like and it looks like this:

At present the council’s financial stake within the project is represented by its initial £5 million purchase of the land at Otterpool Park (plus £0.2 million in stamp duty and fees) and an estimated cost of £2.3 million net of other party contributions to achieve outline planning permission. Plus a further 3.6 million to put their land options together. SDC have therefore spent or will have spent a minimum of £11.1 million before they turn the first piece of soil. No doubt with inflation and rising costs elsewhere this sum may well increase.

Pinsent Masons LLP have been working on a developers agreement for SDC and to date they have paid them £94,082 for professional advice according to SDC’s Payment to Suppliers. They to prepared helped in preparing Report C/17/76 in conjunction with SDC legal department.

The Cabinet members responsible for Report C/17/76 are Cllr David Monk, Leader of the Council (pictured below left) and Cllr Dick Pascoe, Property Management and Environmental Health (pictured) and the SDC officers are Chief Executive Alistair Stewart (pictured) and Corporate Director Tim Madden (pictured ).

   

So no MIPIM for Cllr Monk or co, £11.1 million spent or set aside to spend on Otterpool, difficultly in securing agreement for land for SDC and another major party muscling in and wanting to secure land within the boundary of Otterpool. Oh and another meeting – in part – behind closed doors on Wednesday’s 31st Cabinet Meeting.

Under S3 Local Government Act 1999, a Best Value Authority must have regard to certain things and must consult.

So that would be

• representatives of persons liable to pay any tax, precept or levy to or in respect of the authority

• representatives of persons liable to pay non-domestic rates in respect of any area within which the authority carries out functions

• representatives of persons who use or are likely to use services provided by the authority, and

• representatives of persons appearing to the authority to have an interest in any area within which the authority carries out functions.

This according to SDC’s planning timetable will take place between now and the end of the 2018.

SDC have brought together 17 “experts” in the form of the Otterpool_Park_Place_Panel who will meet each month on the following dates. 15 January, 12 February, 12 March, 23, April, 14  May, 18 June, 16 July, 20 August, 17 September, 29 October, 26 November, 10 December.

At paragraph 1.1 of the Introduction  of the Otterpool Park Place Panel – terms of reference it states:

•  Shepway District Council is working with local landowners, residents and partners to develop a new community at Otterpool Park.

It mentions residents, so how many “residents” have SDC spoken to about their proposed development? Cllr Monk in a response to a Question from the Public (No 4) by Mr Deane (pictured) stated:

• The most recent public consultation exercise indicated good levels of support for the Otterpool Park project from parts of the community.

Cllr Monk (pictured) gave NO evidence to support his claim in his reply to Mr Deane. Furthermore to correct Cllr Monk, there has been NO public consultation, unless he knows something we don’t as a Public Consultation is a statutory process; which is yet to take place. What he should have said is there has been two rounds of public engagement in Dec 2016 and April and the end of June 2017. According to our friends at slurry org.uk all the public events were poorly attended and their interviews demonstrate most of the people who attended the events were against the development.

Of course, Cllr Monk (pictured) can delude himself, but not us, there are still a lot of unanswered questions and as we have said before, secrets breed mistrust, so come on Cllr Monk start publishing your evidence that there is support for Otterpool Park. We wait with batted breath.

The Shepwayvox Team.