Otterpool Park Update

Tomorrow the Cabinet will meet to discuss report Report Number C/20/02  -which makes recommendations about the Otterpool Park Delivery Vehicle, how it will be structured and what its initial activities will be. Attached to the report are four appendices:

The report says “The Council has now acquired Cozumel’s land interests“, yet the land registry Title Deed – K981992 as of today does NOT support the fact the land has been “acquired“. It still shows the Reuben Brothers company Cozumel Estates Limited as the owners.

Moving on, in Jan 2020 the “Chief Executive” Dr Susan Priest, used her power to take urgent decisions, which is dealt with in Part 8 of the Constitution to incorporate Otterpool Park LLP and the Otterpool Park Development Company Ltd. These are the Delivery Vehicle and the Nominee Company respectively. Folkestone & Hythe District Council are currently the sole owners of both companies.

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The LLP (Limited Liability Partnership) company is agile and allows it to bring in other partners easily.  Any new partners joining the LLP will bring money and expertise to the project.

An LLP is tax transparent, meaning that its distributable profits are taxed in the hands of its members (i.e. the Council and any other member who joins), not the LLP. Other taxes, such as VAT and Stamp Duty Land Tax are payable in the usual way. This ‘tax transparency’ benefits the Council as owner, since it does not pay corporation tax.

Otterpool Park LLP is not required to have articles of association. The LLP will be governed by a Members’ Agreement, its governing instrument to regulate relationships between the members and the LLP, signed by the members (, i.e. the two owners being the Council and Otterpool Park Development Company Ltd ) and the LLP itself – being the equivalent to the articles of a private limited company.


The Members’ Agreement provides the limits and qualifications on what the LLP is able to do in terms of governance and decision-making by being subject to what is set out in the Draft Members Agreement. The Council as a member of the LLP in all circumstances has the final decision, as well as rules regarding procurement and financial controls.

The Members’ Agreement provides for quarterly meetings of the LLP members, expectations though are that it will meet more regularly. It is suggested that the Council be represented at the meeting by the Leader of the Council and the Director of Otterpool Park Development Company Ltd by the Director of Place, Ewan Green . Appropriate officers, including the statutory officers, would also attend. Otterpool Park Development Company Ltd will not play an active role in Project delivery.

The role of the Delivery Vehicle – Otterpool Park LLP –  is currently envisaged as that of a master developer. As such the LLP will be the applicant for the Planning Application and, where appropriate, subsequent planning applications relating to Project delivery. What this effectively does is create an arms length company/organisation controlled by the council.

It is suggested that the board of the Delivery Vehicle initially consists of two officers for a period of up to six months with that time being used to appoint as soon as practicable two Councillors as members – any payment should not be more than the special responsibility allowance of a cabinet member – and three Independent non – executive directors with specific skills and expertise needed for the project. A payment of £10,000 pa for each non – executive independent director would be appropriate, and a term of four years is suggested, which is considered in line with practice elsewhere.

The imperative for establishing the LLP is so that it can act as the Master Developer of Otterpool Park and give evidence to the Planning inspectors at the Examination in Public (“EIP”) into the Local Plan that demonstrates that the Project can deliver the housing numbers envisaged in the plan.

The EIP has now started with questions posed by the inspectors. One set of questions is concerned with deliverability.  No notice of the Examination in Public of the Local Plan has been given by the Council or the Planning Inspectorate.

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The first phase of the project will aim to establish the nature of the town, and see, in the order of, 2,000 units being developed over the next 6-8 years, supported by considerable upfront infrastructure investment.

 The Draft skeleton business plan – Otterpool Park LLP sets out what the LLP will aim to achieve over the next twelve months.

It’ll need £1.25 m plus the internal costs of running the delivery team estimated at £440,000 to see it through the first year.

The LLP as a going concern will need financing to operate and pay suppliers, as such it’ll need capital from the Council, more likely than not drawn down from the £100 million it intends to borrow from the PWLB.

The Business Plan will be prepared and approved for a five-year period, but subject to annual reviews. The Cabinet will be responsible for approving the business plan. If approval of the business plan entails a departure from the Council’s budget then that aspect would have to be approved by full Council.

The Overview and Scrutiny Committee (O&SC) will have an important role to play in commenting on and scrutinising the five year business plan and the annual reviews prior to consideration by cabinet. The intention is to have an early discussion with members of O&SC about the business plan, potentially in July 2020.

Financial modelling undertaken by the Council has established that the scheme is profitable, and has the means to make significant returns to its owners. The financial modelling has not been released so we’ll just have to take the council’s word the whole project is viable.

The Shepwayvox Team

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