Council’s Property Development Company Otterpool Park request a further £80m

Perhaps Cllr Susan Carey was right after all when she said we should sell Otterpool Park in February 2023. I say that as the company set up to deliver the Otterpool Project, is requesting a further £80m loan facility from Folkestone & Hythe District Council

On the 20 April 2023, at the last Cabinet meeting before the elections, Otterpool Park LLP, has requested the Council increase its loan facility by an additional £80m, to £199m, according to Report Number C/22/109.

This, so the Council say is “to cover peak debt requirements.” 

As you may or may not know, the current agreed loan facility is £119m; which consists of £44m for land acquisition, and £75m for working capital.

The LLPs additional £80m funding request is comprised of £49m for accelerated land acquisitions and £31m for inflationary cost pressures on infrastructure provision.

The loan facility sought by the LLP is for two things

1 To address the project’s peak debt period,

2 Securing land options as early as possible and facilitate timely delivery of necessary key phase 1 infrastructure of for utilities and the upgrade of Westenhanger Station to accommodate HS1.

The previous peak debt levels were £60-65m, meaning the additional loan facility by the Council will take the peak debt levels to around £90 -95m.

The level of funding from the Council to the LLP is a very significant undertaking at a scale
which has not previously been considered in the Council’s Medium Term Financial Strategy (MTFS), nor its Medium Term Capital_Programme (MTCP).

The increase in the loan facility will require consideration of Cabinet, and agreement of the next full Council at some point in May, after the elections; with new Cllrs who next to nothing about this project. 

So, before the project has begun, the Council’s property development company needs more cash to make the 8,500 homes become a reality.

The Council have shown themselves not to be property developers. Just think Princes Parade, which has had to be “paused” due to persevering campaigners, costs and inflationary pressures; which has all but killed this project thankfully.  

Perhaps Cllr Susan Carey’s comments at Overview & Scrutiny on the 14 Feb 2023 are wise and prudent ones. 

I for one would agree with her wise words. That said I would prefer to stop the project, but before committing to that step, I would need to know, if elected, at what cost it would come to all the residents of the district. I say that because cutting our loses on to two large scale projects would affect the Council’s balance sheet and its income and expenditure. And as you may or may not know, we already have a forecasted £16m pound deficit to overcome over the next four years.

Furthermore, the Council have also shown themselves to be one of the only Council’s in the Country who cannot make an operating profit on its property letting company – Oportunitas – which will not generate sufficient profit to meet its operating costs until 2031.

Such a track record does not bode well for council tax payers of the district.

The Council as Cllr Carey says are not property developers and many who have tried have failed. These are words echoed by Ian Hislop, editor of Private Eye Magazine recently on the BBCs Question Time programme.

Given all this, perhaps the next Council, with new Cllrs no doubt, do need to pause, reflect, assess and look at all the options available, so as not to lump the ratepayers of the district with a millstone of debt, for the next 50 -75 years. 

VOTE RYLANDS

FOLKESTONE CENTRAL

MAY 4

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