St David's Road North Depot Sale
Are Fylde at it again, and selling us short?
Readers will remember that in the Heeley Road Hostel debacle, Fylde BC infuriated local residents by planning to 'sell' the former vehicle maintenance site - that locals claimed was worth £400,000 to £500,000 (see
Asset Mis-selling?) - for just £171,400.
The fuss people made at the time caused Fylde to increase the sale price to Muir Housing Group to around £250,000.
But then Fylde made it worse, by making a donation - of exactly the purchase price (£250,000) - to Muir toward the cost of building the Hostel.
So in effect they were planning to give away a site worth around half a million, for nothing.
They argued the reason for the 'low' price was because the site was for a form of 'Affordable Housing' - and that didn't warrant anyone paying the 'full market value' for it.
In the end, a private developer offered £400,000 and Fylde caved-in and accepted their offer.
Fylde say they learned a lesson from Heeley Road.
Certainly they changed their Constitution so they couldn't be caught out again if they sold things for less than they were really worth. (A topic we'll return to shortly).
And recently, they abandoned the former Commissar's £7 million White Elephant New Town Hall in favour of a more modest £3m or so refurbishment of the existing accommodation.
(And that will only happen if the sale of assets - chiefly the Wesham Offices, St Annes Public Offices, and St David's Road North depot site - produce enough to make the refurbishment self-funding).
So whilst we can think of better uses for £3m, at least it won't impact on the Council Tax.
When we reported before, we didn't think the St David's Depot sale would happen quickly - because, (as we've said before), we know a developer who was offered the St David's Road North site for just £1 back in 2006 if he would undertake to clean up the industrial
contamination that was in the ground. (He declined).
But as we said in 'Talking Rubbish' "....we thought it would be a lot longer in the future than most people would expect unless they can find someone like a Registered Social Landlord who can tap into the
Government's 'Silly Spends' pocket and have the de-contamination costs met by a big Government grant. (And even there, the Government are struggling for cash at the moment)."
So we were, and we were not, surprised to see New Fylde Housing (which is now owned by Progress Housing in Leyland) as the buyer of St David's Road North site a couple of weeks ago. We were not surprised that a RSL had bought the land, but we
were surprised the sale was so quick.
Details of the deal are now beginning to emerge, even though FBC are attempting - once again - to keep them secret, by excluding the press and public from the meeting that debated the sale.
There's good news and bad news for counterbalance readers.
The good news is that new Fylde Housing are going to pay Fylde £489,120 for the site.
The bad news is that to get New Fylde Housing to pay that price for the land, FBC is having to give them a grant of £615,000 so they can pay it, (and have a bit left over).
The effect 'in real terms' (as they say) is that Fylde has realised that our developer friend was right in 2006 when he wouldn't pay £1 for it.
So the Council is, in effect, paying New Fylde Housing £125,880 to take the site off their hands.
Anyone want a cheap Depot????
New Fylde Housing are also getting a grant from the Homes and Communities Agency (in effect from Government) to build the houses as well.
As yet, we don't know how much this grant from Government will be, but you can bet it's not going to be thruppence.
We expect most folk will think Fylde BC needs a collective brain transplant for giving up a perfectly serviceable depot (and having to build a new one at the back of Kilnhouse), then losing another £100,000 or more on the deal to sell the first
However, Fylde justify their action by saying that there is a need for affordable houses, especially in St Annes, and there isn't enough room on the depot site to put any 'full market value' housing that could help to cross-subsidise the
development, so they have to put cash in, to be able to get 30 'affordable' houses.
Our sharper readers will no doubt be wondering just where the £615,000 is coming from, given that Fylde has approved it's budget for the year and this wasn't in it.
This is where Fylde produces one of its cunning stunts - they're going to take the money from what Barratt paid them for the development at the former Queen Mary school.
Barratt didn't want to put any socially subsidised 'Affordable' houses on the QM site, so they paid cash into Fylde's 'Affordable Housing Commuted Sum Reserve' (which currently stands at £2,901,000 and can only be used to pay for 'Affordable Housing')
The cunning stunt is that, in effect, Fylde is more or less money-laundering its 'Affordable Housing' money into a spendable receipt for itself.
By giving £615k to New Fylde Housing, they get back almost £500k to spend on the office refurbishment. (at a cost to FBC of not much more than the interest on a Wonga pay-day loan payment).
They're also building into the sale agreement a requirement that if New Fylde Housing's costs are less than expected, FBC will get a backhander - either as an additional payment, or as a reduction in the £615,000. However if it's t'other way round,
and it costs them more, New Fylde won't be able to do an 'Oliver Twist' and ask for more.
Like Melton Grove, the deal is conditional on New Fylde Housing submitting a planning application for, in this case, "not less than" 30 houses within six weeks of an exchange of contracts, and Fylde BC granting planning consent to them.
If planning were to be refused, New Fylde can either rescind the contract or lodge an appeal against the refusal of permission.
Although the sale was advertised, we didn't see the site put out to tender as we believe it should have been. (We have consistently argued that all asset disposals of any scale by a public authority should be by open competitive tender even if, as
in this case, you want to limit the uses to affordable housing)
So, unless another Registered Social Landlord steps forward publicly with a better offer, or a private developer comes up with a use that doesn't need the de-contamination and is willing to pay FBC a decent sum for the land, it looks as though New
Fylde will be putting Affordable Houses on St David's Road North, and the Town Hall / office refurbishment will have moved a step nearer.
Dated: 30 March 2012