Parkway FOI response: West Berks District Council Options

[Richard Garvie]

I recieved this from the council today, thoughts?

We have now obtained the majority of the information to respond to your request. You
have asked:

a) How much (if anything) was paid from public money to Debenhams

Nothing

How much the s106 contributions were reduced for SLI versus what was promised in
the initial application

The current S106 payment is £2,189,007. The original proposal was for payments in the
region of £3,000,000

c) How much the land that Parkway stands on was sold for and whether it is deemed
value for money for the local taxpayer

£1 – The Council chose to take an annual rental payment (revenue) rather than a capital
sum. The revenue equates to a minimum payment of £300,000 in perpetuity. This is
considered to be a value for money arrangement for the Council taxpayer

d)How much the council has paid towards affordable housing and how many units are
included in the development versus what was promised in the initial application –

£905,000. The original proposal was for 30% affordable housing (equating to 54 units).
The current affordable housing provided is 37 units.

e) What process was used to select SLI as the developer and whether the value they
have delivered is better than what others proposed.

OJEU procurement, with the
developer approved by Member selection. SLI offered best value.

f) How much parking revenue the council will receive from SLI

Answered in my email of 1st November

g) How much revenue the council will have to pay SLI from parking charges in council
car parks and an explanation as to why this is proposed Answered in my email of 1st
November
h) How much income has the council made from the project (sale of land, s106
payments, other revenue)

S106 payments of £2,189,007: £1 for the land, and a minimum of £300,000 PA for
ground rent, plus any additional car parks revenue as explained in my email of 1st
November

i) How much money has the council given to SLI in total

Affordable housing contribution: £950,000

j) What was the commercial land value of the land sold to SLI at the time the sale was
agreed

I am awaiting this information and will supply it when received.

If you are unhappy with the way your request has been handled, please contact me and I
will arrange for an internal review to be carried out.

If you are not content with the outcome of the internal review, you have the right to apply
directly to the Information Commissioner for a decision. The Information Commissioner
can be contacted at:
Information Commissioner’s Office, Wycliffe House, Water Lane, Wilmslow, Cheshire
SK9 5AF

Yours sincerely

David Lowe
Scrutiny & Partnership Manager

[NWNREADER]

I reckon we also need the Q&As referred to re '1st November email'.

[Richard Garvie]

What the email of 1st November said:

Dear Mr Garvie,

I understand that you have requested information from the Council's press team about the arrangements in place between the Council and SLI on parking revenue. I would remind you that all your correspondence with the authority should be through me.

I can however advise that the arrangement with Standard Life Investments is as follows. Their investment in Parkway is bringing a whole range of benefits to the town, including an expected increase in parking revenue for council-owned town centre car parks. It is reasonable that they should gain some return for this. The arrangement is that if car park ticket sales increase above the ‘high’ of 2007/8, then this ‘overage’ based on a fairly complex formula would be split 50/50 with Standard Life Investments. This overage arrangement is for ten years only. Should this situation occur the Council, and in turn the local taxpayer, will be benefiting from increased income, and Standard Life will gain a return for their investment.

Separate to the above is an agreement that Standard Life Investments pay the council £300,000 a year in perpetuity for the transfer from the council of the land on which they have built their car park. The amount is index linked.

Yours sincerely,

David Lowe
Scrutiny and Partnerships Manager
West Berkshire Council
Market Street
Newbury
Berkshire
RG14 5LD

T: 01635 519817

[NWNREADER]

Overall, looks to be a complete answer to your questions.

[Cognosco]

What the email of 1st November said:

Dear Mr Garvie,

I understand that you have requested information from the Council's press team about the arrangements in place between the Council and SLI on parking revenue. I would remind you that all your correspondence with the authority should be through me.

I can however advise that the arrangement with Standard Life Investments is as follows. Their investment in Parkway is bringing a whole range of benefits to the town, including an expected increase in parking revenue for council-owned town centre car parks. It is reasonable that they should gain some return for this. The arrangement is that if car park ticket sales increase above the ‘high’ of 2007/8, then this ‘overage’ based on a fairly complex formula would be split 50/50 with Standard Life Investments. This overage arrangement is for ten years only. Should this situation occur the Council, and in turn the local taxpayer, will be benefiting from increased income, and Standard Life will gain a return for their investment.

Separate to the above is an agreement that Standard Life Investments pay the council £300,000 a year in perpetuity for the transfer from the council of the land on which they have built their car park. The amount is index linked.

Yours sincerely,

David Lowe
Scrutiny and Partnerships Manager
West Berkshire Council
Market Street
Newbury
Berkshire
RG14 5LD

T: 01635 519817

(1) They have not disclosed the formula.

(2) Does this mean they are only paying for the actual area of the car park ie they get the rest for free. Or do they think the £1 more than enough to pay for the rest of the land?

[NWNREADER]

(1) They have not disclosed the formula.

(2) Does this mean they are only paying for the actual area of the car park ie they get the rest for free. Or do they think the £1 more than enough to pay for the rest of the land?

1. They were not asked to, but they can be

2. Seems to me they are paying #3m over 10 years. I don't remember what the original buying price for the land was, but had they bought at market value I doubt the #3m would've been available?

It seems the Council anticipate the development bringing business to the car parks, and have agreed to share some(?) of that with the developers? There is first the need to exceed the historic high, and then the share is limited for 10 years. Is that a bad deal? Is it worse than any other developer would have offered?

I don't know the full details and, as many are now locked in the past with only 20/20 hindsight to measure their success, I'm not yet pressing the panic button.

[Bofem]

Is it worse than any other developer would have offered?

Well there's the rub. Other developers that bring "a range of benefits" would get short shrift if they asked for a slice of the profits they expect to generate. If it's "reasonable" to pay Standard Life this money, is it not reasonable to offer the racecourse something similar? Coiupled with the £500,000 cinema subsidy,it seems Newbury is unable to operate on a level playing field with other towns.

I am sure Standard Life, who own £50m of Greek,Irish and Italian debt, will find this comes in handy when the Euro goes belly up.

[NWNREADER]

We'll never, ever know what would've happened had it been a different develop, will we?
As I see the statement, the current develop will only get anything from the car park deal if usage exceeds a historic high (so not just more than on a wet Sunday in November), and then only for 10 years from now. I would like to see the formula, even if I don't have a scooby what it means.

The cinema subsidy was a totally different construction, and was much less justified by the waffle that was produced by the councillor to support the spend.

Are you saying SLI are to blame for the Euro problems? Or that the EU bigwigs can't construct a deal that benefits their organisation any more than WBC (perhaps)?

[Bofem]

Are you saying SLI are to blame for the Euro problems? Or that the EU bigwigs can't construct a deal that benefits their organisation any more than WBC (perhaps)?

No. Just trying to think of reasons why they STILL need all this extra money?

In reality, they have £10.5bn turnover, so even a bit of bad Euro debt shouldn't make a difference. I was just trying to rack my brains thinking of a reason why SLI need this extra money.

I don't accept that "we'll never know". RG has done well lifting the lid, it's now up to others to continue.

A small group of us could use Community right to buy to take the car parks off WBC and run them in the local interest (perhaps on a not-for-profit basis).

It's difficult as I am interested in the transfer of assets rather than leasing the car parks from WBC. This way, the remaining car parks can be saved from the Vision.

[Cognosco]

We'll never, ever know what would've happened had it been a different develop, will we?
As I see the statement, the current develop will only get anything from the car park deal if usage exceeds a historic high (so not just more than on a wet Sunday in November), and then only for 10 years from now. I would like to see the formula, even if I don't have a scooby what it means.

The cinema subsidy was a totally different construction, and was much less justified by the waffle that was produced by the councillor to support the spend.

Are you saying SLI are to blame for the Euro problems? Or that the EU bigwigs can't construct a deal that benefits their organisation any more than WBC (perhaps)?

I believe there was only one developer from the start?

The local councils are like putty in the hands of the likes of SLI, standard tactics apply, we will withdraw if you are unable to move on this latest proposal, we will lose money if we are unable to alter the planning application.
We will not get a return on our investment unless we can reduce this or that cost and will have to withdraw.
Council goes belly up and hey presto SLI does exactly like they intended to from the start.
Original drawings shredded the, what looked the nicest part of the plans cafe area, abandoned and a drab block for John Lewis rears its ugly head up. But they gave us a new shopping center you know!

The Euro problems came about because of dodgy goings on in the Financial world, selling prime time mortgages that were never going to be able to be paid back, but making vast commissions for the sellers so nothing was done to stop it.

Also allowing countries to join the EU that supplied false accounting figures which everyone in the financial world new were false from the start. Still that is for another thread.

[Simon Kirby]

Dear Mr Garvie,

I understand that you have requested information from the Council's press team about the arrangements in place between the Council and SLI on parking revenue. I would remind you that all your correspondence with the authority should be through me.

[NWNREADER]

No. Just trying to think of reasons why they STILL need all this extra money? Basic principal of business

In reality, they have £10.5bn turnover, so even a bit of bad Euro debt shouldn't make a difference. I was just trying to rack my brains thinking of a reason why SLI need this extra money.

I don't accept that "we'll never know". RG has done well lifting the lid, it's now up to others to continue. We will never know what another bidder may have done, as the situation cannot be measured. saying someone else would've done something differently is just words

A small group of us could use Community right to buy to take the car parks off WBC and run them in the local interest (perhaps on a not-for-profit basis).

It's difficult as I am interested in the transfer of assets rather than leasing the car parks from WBC. This way, the remaining car parks can be saved from the Vision. Self management? Sounds familiar!!!!

[Guest_xjay1337_*]

Well fair play to you Richard for getting this info out of them; I don't think they like the FOI requests. I think it was a good idea not to sell the land outright but keep a yearly income however I think it should have been a £50k upfront with a then annual cost...I can see problems with them not paying.

Also while it clearly outlines 54 affordable housing thingies and there are only 32 or something...I can easily see that's not what was promised.

[blackdog]

2. Seems to me they are paying #3m over 10 years. I don't remember what the original buying price for the land was, but had they bought at market value I doubt the #3m would've been available?

Seems to me they are paying £300k index linked for the next umpteen years (in perpetuity). At some time in the future this might seem too much for a run down old development and the owners could defaullt. Maybe not, until then it's regular income for WBC. Mind you the original agreement was for £350k - definitely a better deal!

The deal doesn't seem too bad - say the land was worth £6m then WBC are getting a 5% return on their investment and a new shopping centre and the rates from 150 odd flats. My concern is that they gave away the freehold - a 99 or even a 999 year lease would have given WBC much more control over future developments.

I believe there was only one developer from the start?

Not so, there were a number of bidders, including Blue Investments who had been the council's previous favoured developer and who had bought up a lot of the land already.

The trouble was that, once they settled on a single developer the developer was in control - WBC could not accept failure so they had to bend over backwards whenever SLI came up with changes.