Sunday, 21 May 2017

Revisiting that car park deal...

Sian Caiach reminds us yesterday of that mysterious car park deal back in 2013, and the financial, erm, ingenuity with which, in the words of the former Police Commissioner, our very own Sicilian cartel in County Hall "extracts vast amounts of money from residents which it showers on favourites, hoards property, bullies opponents, co-opts friends and answers to no one, least of all local councillors."

With the prospect of millions being poured into a luxury spa and private health care down on Delta Lakes, it's worth revisiting the tale of the car park, if nothing else, for the importance of transparency. As Ms Caiach points out, it's not just the initial investment in County Hall pet projects which sail through, despite questionable viability, but the ongoing costs and bailouts.

To give just a couple of examples, the Parc Y Scarlets stadium doesn't have to pay any rent to the council for the land until such time as it makes a substantial profit, so far this hasn't happened and isn't ever likely to. So, instead, the council pays rent to Scarlets Regional Ltd for office space and functions in the stadium. The Eastgate Centre in Llanelli was another council led project where not only did the council give many millions to the developers in land deals etc it cut a deal to provide the private owners with £5m rent, for more office space, over the next twenty years.

It's only a matter of time before the council rents 'office space' in the evangelical bowling alley for compulsory morning prayers...or the 'Wellness Village' for Executive aromatherapy sessions...

But back to the car park. Adjacent to the stadium and surplus to requirements, the car park was owned by the council but leased to the Scarlets Regional Ltd. To provide the company with some cash, and after some planning 'adjustments', the car park was sold off to Marston's Inns to develop a hotel.

The land was sold for £850,000 and with the split in the proceeds declared as 50/50, you might expect, after some minor deductions roughly £400k apiece for the council and Scarlets Regional.

This wasn't the case.

Efforts to get to the actual details of the deal went on for some time but to no avail. In 2013 Cllr Jeff Edmunds, who was the Exec Board member for resources finally decided to reveal the details to Sian Caiach. As she points out, 'When I walked into his office to hear the explanation he was actually on the phone to chief executive Mark James who, even at the last minute, was trying to talk him out of spilling the beans.'

It turned out that out of the £850,000, roughly £650,000 was going to Scarlets Regional, a private company, in 'allowable expenses' and their share of the proceeds.

Eventually, the following year, during Mr James' 'gardening leave', a series of emails were released under FOI. What they revealed, very clearly, was that two senior officers, one who was delegated to finalise the deal and the other being the now retired Director of Resources, had been deeply opposed to most of the 'deductions', especially a hefty £280,000 to pay off a third party debt for the company.

One of the officers stated that the debt was "a private matter for the Scarlets from their share of the proceeds..and is nothing to do with the Council" and the Director of Resources was crystal clear; "I cannot support any of the deductions put forward"

Unfortunately, they're protestations were to no avail and at the last minute, the day before the deal was struck, the chief executive got on the blower to the delegated officer to ensure that his, Mark James', 'instructions' that the council got £200k went through, leaving Scarlets Regional Ltd with £650,000, the lions share, quietly shortchanging the taxpayer by a few hundred grand.

I wrote about all this is detail at the time, The Council, the Scarlets and the 'Allowable expenses', How this payment was ever considered appropriate, never mind legal, beggars belief and the more cynical amongst us might consider it a favour. After all, how many other businesses could rely on the council pulling out the stops to pay off one of their debts?


Anonymous said...

I think any reasonably thinking person would consider to give away thousands of pounds of taxpayers money to a private business, and that is what the scarlets are, is a huge favour. It is worth looking up Officers Code of Conduct. To give favour, separate from bribery, is corrupt practice. I'd like to understand why this part of the Code is overlooked when there is no doubt Scarlets were given favour. Couldn't call it anything else.

Anonymous said...

It is quite mind-blowing to read what has been happening between Carmarthen council and the private sector.Of course it appears to be favour.What else could it be? The amounts paid out are huge and still it continues.
So much damage has been done it needs this new administration to take charge and sort out the mess left by the chief executive.
After the election I have a feeling he will go.

Sian Caiach said...

Jeff Edmunds told me that Mr Mark James persuaded him to rule the Scarlet's debt to Henry Davidson Developments as an "allowable" expense of the sale. As the Exec Board Member in the room, Jeff's opinion officially decided the matter. After all, officers alone do not run councils. In this case it appears the most senior council officer overruled other senior officers' advice and Jeff, I believe, was persuaded into approving the deal, using the future of his home town as the incentive.

Jeff was won over by being told how critical the Scarlets' shops were to footfall in the EastGate development.I genuinely believe all he wanted the best for his town. At that point we ordinary councillors and possibly even exec board members like Jeff were unaware that HDD were eventually to sell on the whole of the Eastgate , it eventually sold to Standard Life. Was it really footfall that was needed or maximum occupation of the units to aid the valuation of the asset?