Why did Wirral Council receive £2 million from an off shore company based in the Isle of Man?

Why did Wirral Council receive £2 million from an off shore company based in the Isle of Man?

Why did Wirral Council receive £2 million from an off shore company based in the Isle of Man?

                                                          

Following on from yesterday’s blog post about how Wirral Council spent £16,412.04 on legal advice for regeneration of Birkenhead Town Centre, you only have to look at the lease for New Brighton’s Marine Point to see why Wirral Council sees these sorts of deals with companies such as Neptune Wirral Limited/Neptune Developments Limited & Neptune Projects Limited as lucrative.

In return for a 250 year lease of New Brighton’s Marine Point between Wirral Council and Neptune Wirral Limited (an offshore company based in the Isle of Man), Wirral Council received a premium of £2 million (plus VAT). In addition to this £2 million Wirral Council also receives 6% of the rents paid by commercial tenants in the Marine Point development as the documents below show.

It’s highly likely that if Neptune’s plan to redevelop Birkenhead Town Centre goes ahead, that there will be some sort of similar lease between Neptune and Wirral Council.

New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd cover page
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd cover page
New Brighton Marine Point lease Wirral council Neptune Wirral Ltd index page
New Brighton Marine Point lease Wirral council Neptune Wirral Ltd index page
New Brighton Marine point lease Wirral Council Neptune Wirral Ltd £2 million premium
New Brighton Marine point lease Wirral Council Neptune Wirral Ltd £2 million premium
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd Additional Rent Page 1
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd Additional Rent Page 1
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd Additional Rent Page 2
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd Additional Rent Page 2
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd Additional Rent Page 3
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd Additional Rent Page 3
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd Additional Rent Page 4
New Brighton Marine Point lease Wirral Council Neptune Wirral Ltd Additional Rent Page 4

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Labour councillors on Wirral Council’s Cabinet agree to consultation on master plan for Birkenhead

Labour councillors on Wirral Council’s Cabinet agree to consultation on master plan for Birkenhead

Labour councillors on Wirral Council’s Cabinet agree to consultation on master plan for Birkenhead

                                                       

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You can watch what happened at the Cabinet meeting on the 12th March 2015 above.

Wirral Council Cabinet meeting at Birkenhead Town Hall Thursday 12th March 2015 Left to right Surjit Tour, Cllr Phil Davies and Joe Blott
Wirral Council Cabinet meeting at Birkenhead Town Hall Thursday 12th March 2015 Left to right Surjit Tour, Cllr Phil Davies and Joe Blott

Wirral Council’s Cabinet met at a different venue to usual (Birkenhead Town Hall). At the start, Councillor Phil Davies wanted to show people the trophy that Wirral Council had received for being “Most Improved Council”. You can see a photo of when they received the award on the Local Government Chronicle website, but below is a photo of Cllr Phil Davies showing people the award at the Cabinet meeting.

Councillor Phil Davies shows off the Local Government Chronicle award Wirral Council received for being most improved council 12th March 2015
Councillor Phil Davies shows off the Local Government Chronicle award Wirral Council received for being most improved council 12th March 2015

Moving to what was on the agenda, Cabinet recommended the draft pay policy statement to the next Council meeting, the revenue financial monitoring report for month ten was hardly commented on, however various councillors commented on various capital projects.

Kevin Adderley talks to the Property Development Framework report at Cabinet on the 12th March 2015
Kevin Adderley talks to the Property Development Framework report at Cabinet on the 12th March 2015

Kevin Adderley talked to the Property Development Framework report after which the Cabinet agreed the recommendations in the report.

Kevin Adderley talking to the Enterprise Zone report at Cabinet on the 12th March 2015
Kevin Adderley talking to the Enterprise Zone report at Cabinet on the 12th March 2015

Mr Adderley then talked to the Enterprise Zone report and again Cabinet agreed the recommendations.

Cabinet agreed a slight increase in the amounts paid to residential and nursing homes and the arrangements for the delivery and commissioning of social care.

Cllr Tony Smith tells Cabinet what the outcome of the consultation on Pensby High School was 12th March 2015
Cllr Tony Smith tells Cabinet what the outcome of the consultation on Pensby High School was 12th March 2015

Councillor Tony Smith told Cabinet what the results were of the consultation to merge Pensby High School for Boys with Pensby High School for Girls. Cabinet agreed to move to the next stage of publishing notices.

The draft admission arrangements for primary schools and secondary schools were also agreed.

Cllr Pat Hackett talks at a Cabinet meeting about the master plan for Birkenhead Town Centre
Cllr Pat Hackett talks at a Cabinet meeting about the master plan for Birkenhead Town Centre

Councillor Pat Hackett spoke to the report recommending a consultation on the masterplan for Birkenhead Town Centre. He referred to an “improved market” and the stage one lockout agreement that the Council had entered into with Neptune Developments Limited. The detail of the proposals were covered in an earlier blog post. Cabinet agreed that Neptune Development Limited were to consult with the public (as well as staff who work at Europa Pools) on the masterplan.

Kevin Adderley pointed out that the Mars Pension Fund had recently advertised the Grange and Pyramids shopping centre in Birkenhead as being for sale. The recommendation to have a consultation was agreed by Cabinet.

A slight increase from April in fees charged to scrap metal dealers was agreed. Cllr George Davies spoke on the report reporting the consultation on licensing of private landlords in four areas on the Wirral. Cabinet agreed to refer the proposals to the Council meeting on the 16th March 2015.

The nominations from Cabinet for Civic Mayor and Deputy Mayor for 2015/16 were as follows:

Civic Mayor: Cllr Les Rowlands
Deputy Mayor: Cllr Pat Hackett

Cabinet then excluded the press and public from the rest of the meeting.

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Will councillors tell the public what Neptune's plans for Birkenhead Market are?

Will councillors tell the public what Neptune’s plans for Birkenhead Market are?

Will councillors tell the public what Neptune’s plans for Birkenhead Market are?

                                                 

Indicative illustration of Neptune Development Limited's masterplan for Birkenhead Town Centre
Indicative illustration of Neptune Development Limited’s masterplan for Birkenhead Town Centre

Thursday’s meeting of Wirral Council’s Cabinet had a last-minute item added to its agenda titled “Birkenhead Town Centre – Masterplan Principles”. Neptune Developments Limited (the company behind the New Brighton Marine Point development) have a plan and want Cabinet to approve a consultation on it.

These are the elements of the masterplan:

  • Demolish Europa Pools
  • Build new leisure centre on the car park next to Conway Park train station
  • On the site of what was Europa Pools build a drive through restaurant, public bar/restaurant and seven units (probably cafés and restaurants) plus car parking
  • Reduce the car parking adjacent to Birkenhead Bus Station and put a café there
  • Remodel Birkenhead Bus Station to “remove service vehicles and avoid pedestrian/bus conflicts”
  • Remodel Birkenhead Market Hall
  • Possibly a hotel on the vacant plot on the corner of Conway Street and Europa Boulevard

There’s even a ten page leaflet with glossy photos about the proposals on Wirral Council’s website.

What probably won’t be reported by the rest of the press, as Wirral Council have chosen to keep much of these details out of the public domain is that according to this report (see 2.5) from 2013 Neptune Developments Limited have an interest in one of the pieces of land in Conway Street that would be needed for the scheme.

The report going to Cabinet on Thursday evening also states “No other options have therefore been considered as NDL has already secured an interest in the balance of the land that is needed to deliver the re-provided market.” If Cabinet agree to consult on these plans, Wirral Council will have to seek legal advice that including Europa Pools in the proposals won’t contravene procurement or state aid rules.

At the moment, there is uncertainty as to what the proposals mean for Birkenhead Market and hopefully some light can be shed on this element of the proposals at the Cabinet meeting this Thursday evening.

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Secrets about Wirral Council’s Birkenhead Town Centre Regeneration revealed

Secrets revealed about Wirral Council’s Birkenhead Town Centre Regeneration plans and Neptune

Secrets revealed about Wirral Council’s Birkenhead Town Centre Regeneration plans and Neptune

                             

Indicative illustration of Neptune Development Limited’s masterplan for Birkenhead Town Centre
Indicative illustration of Neptune Development Limited’s masterplan for Birkenhead Town Centre

Earlier this year I made a Freedom of Information request for the procurement advice that Wirral Council received from Peter Oldham QC and also Weightmans’ partner Sean Crotty about the regeneration of Birkenhead Town Centre.

A Rosemary Lyon (one of Wirral Council’s in-house solicitors) refused this request on grounds of commercial confidentiality (its own and other third parties). She stated that providing the information would “adversely affect its [Wirral Council’s] bargaining position concerning potential regeneration of Birkenhead Town Centre which would result in less effective use of public money” and “make it less likely that companies or individuals would provide the Council with commercially sensitive information in the future and consequently undermine the ability of the Council to fulfil its role”. They even went so far as to claim that releasing the information “would adversely affect the course of justice”.

However, this blog post is the story behind what went on behind the scenes that Wirral Council clearly (according to the response to my Freedom of Information Act request) didn’t want to be disclosed to the public or written about in the media for reasons I will go into below.

On the 16th July 2013, the Leader of Wirral Council Cllr Phil Davies (under delegated decision making powers meaning that he made the decision on his own) gave his agreement to a “preferred development agreement” with Neptune Developments Limited to “allow them to work up a comprehensive redevelopment proposal for Birkenhead Town Centre incorporating Council owned land on Europa Boulevard and involving the re-modelling and offer of Birkenhead Market”.

In the report seen by Cllr Phil Davies before reaching his decision reference was made to “a commitment to develop a clear master plan for Birkenhead Town Centre” in the 2013/16 Corporate Plan. Reference was also made to the previous offer to Wirral Council in 2010 by William Tar Developments to build a casino on two out of three plots of land owned by the Council on Europa Boulevard. That offer was rejected in September 2010.

However what’s not been known widely by the public until now is that “At the same time and in response to the marketing exercise Neptune Developments Limited (NDL) submitted a proposal requesting that the Council move away from disposing of the sites separately and instead work with them to develop a wider regeneration scheme for Birkenhead. NDL had already secured an interest on a vacant site on Conway Street and they suggested that this coupled with Council owned land on Europa Boulevard could be combined to allow a more comprehensive redevelopment scheme to be worked up and in turn would give a far greater regeneration impact than if the sites were developed separately” and that “negotiations have been continuing with NDL since the completion of the marketing exercise”.

Detailed below is Neptune’s proposal,

“Neptune proposes that the project is taken forward on the basis of a two stage agreement. The first, which is the subject of this Report, will involve granting NDL Preferred Developer Status which will be extendible to a period of 12 months and will be subject to NDL meeting the following performance targets:


  • Work up the Master-plan into a detailed implementation strategy for approval by the Council
  • Working with the Council, NDL will develop proposals which will reposition the town as a retail and leisure destination
  • NDL will negotiate further site acquisitions if necessary to deliver the agreed strategy.”

Subject to securing Members (Ed – Members means councillors) approval to the Strategy and Master-plan NDL would then be required to enter into a second Conditional Development Agreement which would commit them, at their own risk, to work up the proposals into a position were they could be implemented and to deliver the returns that are needed to secure the wider regeneration of this part of the Town.

It is proposed that the Conditional Development Agreement with NDL will be structured to ensure the Council receives the best value obtainable for the 3 sites on Europa Boulevard which will be determined by an independent valuation and all works will be undertaken on an open book basis with NDL working on a fixed developer return on cost which varies depending on the nature of the risk.”

In a section titled “Other options considered” it’s basically stated that no other options were considered because NDL has an interest in the land needed to build Birkenhead Market on once its moved.

“An initial assessment of the NDL proposals confirms that if delivered the scheme will have the potential to revitalise an important part of Birkenhead Town centre delivering a far greater regeneration impact than if the sites identified in this report were developed out separately. No other options have therefore been considered as NDL has already secured an interest in the balance of the land that is needed to deliver the re-provided market.”

The section on consultation states this “There will be a need to carry out extensive consultation on the scheme prior and during the detailed planning process. This will be carried out jointly between the Council and NDL.”

The section on legal implications refers to the advice that my Freedom of Information request in September was about (and refused). Once again Members means councillors.

7.1 In the event that Members want to pursue this proposal and to ensure that it is compliant with current EU procurement law, Officers have sought advice from Weightmans LLP and Counsel about its legality.

7.2 The advice has now been received and it concludes that the Council would at this stage be able to enter into a Stage 1 Preferred Development Agreement on the proviso that a final test of lawfulness is carried out when the Stage 1 work has been completed and the detailed arrangements can be assessed.

7.3 NDL is aware of this advice and would be prepared to complete the first stage obligations at risk to allow the final lawfulness test to be undertaken when the scheme has been fully worked up.”

In other words Wirral Council’s happy to pass on the advice it received (at a cost of £7,404 of taxpayer’s money) to Neptune Development Limited to help them in a commercial venture as it may result in Wirral Council receiving money in the future for land in Birkenhead that it doesn’t want.

According to this article in the Wirral Globe in July 2013 Wirral Council wants to rebuild Birkenhead Market and move it.

Neptune Development Limited clearly as they have “already secured an interest on a vacant site on Conway Street” have a commercial interest in any master plan proposals and would be able to “negotiate further site acquisitions” in advance of the master plan becoming public knowledge.

Doesn’t this all sum up how Wirral Council tries to operate though and considering the public interest in the regeneration of Birkenhead Town Centre being done in accordance with EU procurement law do you dear reader think I should make a further Freedom of Information request to Wirral Council for the advice they received from Peter Oldham QC and Sean Crotty of Weightmans in relation to this matter in the hope that they would provide it this time?

P.S. If anyone would like to have a stab at translating ”all works will be undertaken on an open book basis with NDL working on a fixed developer return on cost which varies depending on the nature of the risk” into plain English that can be understood by the average person please leave a comment!

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Incredible £7404 spent by Wirral Council on legal advice for Birkenhead Town Centre regeneration

Incredible £7404 spent by Wirral Council on legal advice for Birkenhead Town Centre regeneration

Incredible £7404 spent by Wirral Council on legal advice for Birkenhead Town Centre regeneration

                                                               

Earlier this year Wirral Council paid £6,000 to Weightmans for “professional charges in relation to the potential regeneration of Birkenhead Town Centre to include all time up to and including 17 December 2012” and £1,404 for procurement advice from Peter Oldham QC. You can see the invoices by clicking on these links and there’s a Wirral Globe article from July about Neptune being asked to come up with a master plan for the area.

Wirral Council have a Corporate Procurement Unit so why didn’t they ask them for advice instead? They even have sixteen in-house solicitors they could have asked. I wonder if they thought that asking a Weightman’s partner and a QC meant that if someone made a FOI request for the advice, Wirral Council can (rightly or wrongly) claim a section 42 exemption (legal professional privilege). However as this advice isn’t in relation to any legal proceedings, section 42 doesn’t apply. Therefore I’ve made a FOI request for the advice provided on the whatdotheyknow website.

Update: 26th September 2013: Wirral Council have switched it from a Freedom of Information Act request to one dealt with under the Environmental Information Regulations 2004 and refused it under regulation 12 (5)(e) “commercial confidentiality” and 12 (5)(b) “legal advice privilege/legal professional privilege”.

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