- Debate over the Jersey International Finance Centre has intensified following news that a major bank had signed up to take space in the schemes first building.
- See the JDA and the opposition’s views below
- Read Deputy Le Fondrés questioning of former Treasury Minister Philip Ozouf in the States last year as recorded by Hansard
FORMER Treasury Minister Philip Ozouf ‘made an error’ and should not have said that building work on the Jersey International Finance Centre would not go ahead until 200,000 sq ft of office space had been pre-let, the politician now in charge of the public purse has said.
Yesterday, the Jersey Development Company announced that Swiss investment Bank UBS had signed a deal to lease 16,500 sq ft of office space in the first building of the planned finance centre and that construction could now start.
- According to the company, the Jersey International Finance Centre will provide much-needed grade A office space in the Island.
- The company also says that more than 50 per cent of the existing site, which is currently a car park, will be given back to the public in the form of a park and other public space.
- And the organisation has also moved to reassure Islanders that no parking spaces will be lost as the plans include an underground car park and temporary spaces that have been created nearby while construction takes place.
- Lee Henry, the managing director of the JDC, said: We are absolutely delighted that UBS has selected the JIFC for its future office accommodation. This is fantastic news for Jersey as it demonstrates long-term confidence in the Island as a leading financial services jurisdiction and, importantly, it provides the necessary pre-let to begin the construction of the JIFCs first building.
But project leaders and politicians have faced heavy criticism about the scheme from opponents who say that the leasing of a quarter of one building is not enough to give the JDC licence to start building.
However, the company yesterday said that it considered it had satisfied the terms of its memorandum of understanding with the States.
That agreement stated that construction could not commence until a ‘sufficient’ level of pre-lease agreements had been obtained.
And in the States Chamber last year, the then Treasury Minister Philip Ozouf confirmed that building would not begin until 200,000 sq ft of office space had been leased.
In the same discussion in the Chamber, Senator Ozouf went on to say that the buildings were ‘to be progressed on a fully-let basis in order to reduce the risk’.
Speaking from Kenya yesterday, where he is visiting communities helped by the Jersey Overseas Aid Commission’s projects, Senator Ozouf said he could not comment on his previous statement and that questions should be directed to the current Treasury Minister Alan Maclean.
Senator Maclean said that although he had not had a chance to speak to Senator Ozouf, he had checked the Hansard transcript and that Senator Ozouf had appeared to have made a mistake in answering a question from Deputy John Le Fondré.
‘All I can conclude from this is that he made an error,’ Senator Maclean said.
- 7 June: Islanders have been invited to form a chain around the Esplanade car park to demonstrate their opposition to the finance centre
- 16 June: States Members are due to debate a proposition lodged by Deputy Montfort Tadier, which calls for the JIFC project to be stopped until the results of the Corporate Services Scrutiny Panels review are known. He has also asked Members to agree to hold a referendum on whether the project should be carried out at all
‘From time to time ministers make errors and I would like to take this opportunity to correct that error now.
‘In order to meet the concern the States had about the project, it was taken on on a building-by-building basis, with pre-lets required to ensure the cost of the buildings that are to be constructed are covered.’
Senator Maclean would not be drawn on how much rental income would be needed to cover the construction cost of the first JIFC building.
He did say, however, that he took comfort that HSBC had agreed to lend money to build the office block as they would have had to carry out due diligence before agreeing to the deal.
The Treasury Minister also said he had no reason to believe that an overall return of £50 million to the public purse – the amount the JDC has said it could repay following the successful conclusion of the finance centre – would not be achieved.
ISLANDERS’ opposition to the Jersey International Finance Centre will be ‘galvanised’ following news that construction on the project’s first building could get under way in the coming weeks, according to a former politician who is due to lead a demonstration against the scheme.
Former States Member Sean Power, who previously served as Deputy in St Brelade, said that the news would stir public action and lead more people to join a ‘human chain’ around the proposed building site on Sunday 7 June.
Mr Power said: ‘Why should the States of Jersey, through a semi-States company, take a comercial risk in a market that is uncertain, within an industry that has an uncertain future in Jersey?
‘The feedback to me has been enormous and it has come from a range of age groups. If anything this is going to galvanise action and turn out next week.’
Treasury Minister Alan Maclean has since moved to reassure Islanders that Senator Ozouf’s comments about needing 200,000 sq ft to be leased before building began were historically related to the project as it existed when developers Harcourt were leading the plans several years ago.
Deputy Le Fondré’s questioning of former Treasury Minister Philip Ozouf in the States last year as recorded by Hansard:
Deputy Le Fondré: ‘What I would just like to ask as well as a first supplementary; previously in a statement to the Assembly the Minister has stated: “That development works on the Esplanade Quarter will not commence until agreement has been entered into for the letting of at least 200,000 square feet of office accommodation.” Could the Minister confirm whether this position has changed in respect to the present planning applications and if there is to be any reduction in pre-let areas and, if so, why and when he was going to announce this to the Assembly bearing in mind what is, therefore, the increased risk to the project?’
Senator Ozouf: ‘No, the position has not changed.’
Deputy Le Fondré: ‘To be clear given that the present scheme is 180,000 square feet he will be looking to get pre-lets on 100 per cent of the two buildings that are being proposed?’
Senator Ozouf: ‘The market is certainly dynamic and we do not wish Esplanade Square to represent any risk to the public. I think what has changed from a market dimension in the last few months is the fact that such is the optimism of financial services and other sectors of the economy – such as the digital area – that there is increasing evidence of an absence of supply so while I am absolutely clear with S.o.J.D.C. (States of Jersey Development Company), who I had a board meeting with my Assistant Minister and the Treasurer of the States yesterday, is that their buildings are to be progressed on a fully-let basis in order to reduce the risk.’
PUBLIC confidence in the States to deliver the Jersey International Finance Centre could hardly be any lower.
Apart from the odd politician and members of the Jersey Development Company, it is hard to find anyone who either thinks that it is needed or that it will provide the promised £50 million return.
Many would rather have a car park – or even just a park – than what is increasingly perceived as a vanity project championed by the hubristic few who have stuck their heads stubbornly in the sand.
After years of wholly predictable political in-fighting, indecision and several million pounds of expenditure on plans and professional fees – including the salaries of the quango at the heart of the saga which has long looked like a bloated gravy train – the project has come to symbolise much of what is wrong with the democratic process in Jersey.
Since 2008, the States has debated the finance centre five times, and each time Members have voted to continue with the project, their support based upon assurances that WEB or JDC could deliver a high-risk development project to budget at a time when the finance sector is contracting.
For too many outside the corridors of power, it is yet another example of those at the top not listening to Islanders, of their bulldozing through a vision of Jersey which is out of step with what huge numbers of people want.
Now they have moved the goalposts.
Today, the worst-kept secret in Jersey was officially announced – that UBS is to be the first signed-up tenant of the first building of six. The Swiss bank is taking just under a quarter of the space – 16,500 sq ft – in building number four opposite the Tourism building.
JDC says that is enough to start building. On 4 February last year, former Treasury Minister Philip Ozouf confirmed that construction would not start until 200,000 sq ft of space had been rented – until the risk had been sufficiently mitigated by signatures on contracts.
Where is Senator Ozouf now? Why is he and others not questioning this U-turn on behalf of the very concerned electors who they represent? What has happened to open and accountable government?
Meanwhile, Islanders are preparing a revolt. Plans for a ring-fence protest and a petition are gaining momentum and the chasm between elected and elector into which trust has fallen is growing ever wider.
This is not just a battle about a few office blocks – it is about the preservation of democracy.
