Folkestone & Hythe DC to purchase Connect 38 Ashford, Kent
Updated 18:50 Sunday 10th March
On Wednesday 13th at 5pm the Folkestone & Hythe District Council Cabinet (F&HDC) will meet at the Civic Centre.
Agenda Item 11 & 12 are to consider the purchase of a Commercial Property, and this part of the meeting will be held behind closed doors. Full Council will follow at 7pm and it too will be discussed behind closed doors there as well, – Agenda item 14 & 15
However, the Shepwayvox Team can inform you the public, our Council according to the Pink Papers we have seen, are to consider purchasing the commercial property Connect 38 at Dover Place Ashford, Kent (pictured below). It was built by Quinn Estates and George Wilson Holdings, who incorporated a company called Ashford Commercial Quarter Limited on the 9th February 2016, according to Companies House. We understand the asking price is between £16 & 17 million. A loan from the public works loan board will be needed to secure the property if F&HDC Cabinet & full Council vote to allow the purchase to happen. As we understand, the building has tenants to occupy the building, for the foreseeable future.
This is the building which both Cllr David Monk and F&HDC Corporate Director John Bunnett for Place & Commercial (grey suit), attended the opening of on the 8th June 2018.
Now there are some strange things about this land and property.
The Planning Application – 16/00554/AS was submitted on the 14th April 2016.
However, according to the land registry, Ashford Commercial Quarter Limited did not purchase the title deed for the land until the 21.02.2017. This is three months after ABC gave themselves planning permission granted by the Planning Committee at Ashford Borough Council (ABC). This was planning permission for 60,000 sqft of Grade A Office space & ground floor retail space.
The transfer of the land, we now understand was caused by the delay in appointing a new Chief Executive.
Ashford Commercial Quarter Limited paid ABC £2 plus vat for the land. However, it had gone out to tender but no-one stepped forward to take up the deal accept Ashford Commercial Quarter Ltd. The reason is because banks were wary of loaning such a vast sum of money to build out the project with no guaranteed tenants. Ashford Commercial Quarter Ltd had to put up a £10 million personal guarantee. In building out the project it created approximately 600 jobs.
However, that said how would the sale of the land constitute value for money for land next to a strategic asset – Ashford International railway station, 38 minutes from London – we’re not quite sure. We suspect the auditors Grant Thornton might not have looked to closely, if at all at the sale.
We contacted Mr Mark Quinn (pictured above) of Quinn Estates who informed us “I can neither confirm nor deny any such purchase is to take place.“
The F&HDC Cabinet members who gave us sight of their pink papers, believe such a purchase makes perfect sense for the Council. They do so on the basis of the yield which will be between 5 & 10%. Such an amount on an annual basis would assist the Council’s coffers, as they will no longer receive any Revenue Support Grant from Central Govt as of the 1st April 2019. The Cabinet members make it clear it is a strategic decision to enable the Council to continue delivering its core services.
However, the government issued new statutory guidance on local government investments in April 2018. This statutory guidance forces councils like ours explain how asset purchases relate to their core purposes. The Statutory Guidance also says:
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For each financial year, a local authority should prepare at least one Investment Strategy (“the Strategy”). The Strategy should contain the disclosures and reporting requirements specified in this guidance.
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The Strategy should be approved by the full council. For authorities without a full Council, the Strategy should be approved at the closest equivalent level. The Secretary of State recommends that the Strategy should be presented for approval prior to the start of the financial year.
Having checked the Council’s website there is no mention in any investment strategy regarding the purchase of the Connect 38 Building in Ashford (Kent). However, the matter will be discussed by full Council on the 13th March at 7pm. It is agenda item 14 & 15 on the agenda.
Also another sign the Council intend to buy Connect 38 is the fact they procured the services of Arlingclose Ltd back in Jan 2019 to provide – general and financial advice regarding options/approaches the Council might adopt for the purchase of Connect 38 in Ashford. At least two potential options are available in respect of the acquisition. General and financial advise is sought with regard to each option.
We are certain that Cabinet will agree and that full Council will follow suit, perhaps with a few Cllrs voting against the proposal. However, in a future where no Revenue Support Grant is forthcoming and Councils up and down the land have lost 60p for every £1 of funding since 2010, does it make sense for our Council to purchase the first new commercial space to built in Kent in the last 20 years? We’ll leave you to decide that.
The Shepwayvox Team
Not owned by Hedgefunds or Barons
A wise purchase by the Council and a balanced piece.
So Ashford Borough Council owned the land when planning permission was granted. Then sold the land to Quinn & Wilson’s company for £2. WTF! Now they will sell land to F&HDC for £16-17 million, something fishy here. Why sell the land for £2 when it is in such a strategic location in Ashford and had planning permission making it worth millions, not £2. Odd indeed.
It is my understanding that the redevelopment of the former SEEDA land into the first new office block to be built in over 20 years, creating local employment both through its construction and now it’s commercial tenants, was a decision not taken on the grounds of land sale / income generation but to kick start ashford Com Quarter. The land was acquired by ABC at the same time that they purchased international house and the former Crouches Garage building in Dover Place. So, it was not purchased at anywhere near market value from the central government agency who owned it. . The site was only viable if a developer was prepared to provide the £10m surety required by the banks to loan them the funds to complete the construction. The only developer prepared to step forward and carry the risk was Quinn Estates and George Wilson. So, in conclusion this is a sound investment for Folkestone and Hythe, and ABC will receive income from the business rate. The unanswered question is why ABC, having done all the hard work finding a development partner and who are now selling the site, did not purchase it themselves?
Because there Commercial Property Portfolio is already full and would become lopsided if they took on more.
Wasn’t John bunnet chief executive at Ashford? Odd indeed.
Yes he was, but he had long gone before this decision was made