- Dandara and Jersey Development Company started dispute over finance centre
- The developer claims project will cost taxpayer £74 million
- Jersey Development Company says it will make a profit of £50 million
- Now Le Masurier claim that the States’s estimates are based on outdated information
- Should the finance centre be built? Take our poll below
ANOTHER rival developer has waded into the debate about the proposed Jersey International Finance Centre at the Esplanade, this time questioning the independence of a viability report used by the Treasury Minister to defend the multi-million-pound project.
Last week Senator Alan Maclean said that the project’s feasibility was supported by independent experts at BNP Paribas.
The company, which is acting as the sole letting agent for the Jersey International Finance Centre, produced a report in 2014 stating that their projections showed the development would return more than £55 million to the public purse after the final building is complete.
That is in direct contrast to projections from rival developers Dandara, who last week claimed the finance centre could lose the States £74 million, with build costs outweighing the net sale value of the scheme.
Now another rival developer, C Le Masurier Ltd, has also got involved.
Chartered surveyor Ben Ludlam, from C Le Masurier, said BNP’s report was a year out of date and the company had themselves stated that the work did not ‘comprise a formal valuation’.
Mr Ludlam added that the report was based on building starting in April 2014 and that construction costs for later buildings not due to begin for several years had not taken inflation into account.
‘The letter is quite literally not worth the paper that its written on and the Treasury Minister is in cloud cuckoo land if he thinks that it can be relied upon,’ he said.
‘It is important the record is set straight and the public are made aware of the risks the States are again blindly taking.’
However Senator Maclean defended the use of BNP’s report, saying that the organisation would not put its name to something that was likely to fail. The minister said that other reports had set the project on a sure financial footing.
‘They are not the only people to have looked at this. BNP’s reputation is also key. If they verify a project of this nature and it proves to be wrong, it’s not going to be in their interest to get it wrong.
‘At the end of the day I have to base opinions on professional advice. We have set up the Jersey Development Company to do a job and we’ve resourced it and staffed it with professional experts to get verification on projects they are undertaking.’
Senator Maclean said that the JDC’s board was satisfied with the information they had received.
When asked whether a new independent valuation report would be of use, the Treasury Minister said it was difficult to second guess such a matter.
Developers Dandara previously suggested that the Jersey Development Company scheme, as proposed, would lead to £74 million in losses for the public purse because the project was unviable, with building costs that outstripped the scheme’s resale value.
Now the JDC has responded to those claims, citing a return of £52 million. It has also revealed a 2008 letter from Dandara to the then chief executive of the States, Bill Ogley, outlining an offer to take on the development under the same terms as Harcourt, who were due to complete the project at the time but were later rejected by the States.
The information has also been sent to the States Regeneration Steering Group – a panel of senior States Members which directs the activities of the JDC.
However, Dandara managing director Martin Clancy said that his company’s offer to take on the project in 2008 in no way undermined the business’s recent comments that the JDC’s project was unviable.
Under their 2008 offer, which according to Dandara’s letter was backed by a bank guarantee of £95 million, the then Waterfront Enterprise Board – which later became the JDC – would have been guaranteed a £50 million return with no risk to the public purse, Mr Clancy said.
He added: ‘We would have designed it differently to make it commercially viable. Since that date we have built 180,000 square feet of office space.
‘The current scheme doesn’t work, it’s been designed badly and is too expensive.’
After being asked for their opinion of the JDC scheme by Corporate Services Dandara wrote: ‘If the question was asked “would the private sector deliver the proposed development as currently planned?”, the answer is an absolute no.’
The managing director of the JDC, Lee Henry, explained that his company felt it was important for the Regeneration Steering Group to see their response to Dandara’s claims about the scheme and the company’s letter to the States in 2008.
Mr Henry confirmed that the organisation would be raising the issue when appearing at Corporate Services Scrutiny hearings later this year.
- The Jersey Development Companys plans for the Jersey International Finance Centre on the Esplanade car park site include six new buildings.
- Proposals were put forward in December for the third building in the scheme, which the Jersey Development Company described as a clear sign of progress and interest in modern office space
- To date, the organisation has secured planning permission for two large office blocks as well as the underground parking that will form part of the overall plans.
- If approved, the latest plans would provide 69,000 square feet of office space in a building overlooking the roundabout on Route de la Libération.
- Lee Henry, the managing director of the Jersey Development Company said that the latest planning application envisaged outdoor table tennis tables for everyone to use and that future plans would include a café.
- Under the plans, a number of parking spaces have been relocated to unused scrubland near Jardins de la Mer while the work is carried out.
‘It is Dandara’s view that the proposed development does not in any way represent the best (indeed any appreciable) socio-economic value to the States of Jersey on behalf of the people of Jersey.
