But the long-running saga over the planned Jersey International Finance Centre is due to come to a head on Sunday, with a protest on the very land on which it could be built.
The planned scheme to construct a series of office blocks on the Esplanade car park is one which has sparked debate across the Island – and has left two very distinct camps with polar opposite thoughts on the project.
On one side is the Jersey Development Company – the States-owned property developer charged with bringing the plans to fruition.
The other is the very vocal opposition, who, in recent weeks, have been led by former Deputy Sean Power.
Hedley Le Maistre has critisised the proposed new finance.
Listen to his new song here
The JDC recently enjoyed a much-needed boost after Swiss investment bank UBS became the first company to sign up for the first office block in a deal which will see them occupy about 16,000 sq ft.
That, say the JDC, is enough for work to build the block to commence.
But the news galvanised the opposition, who seized on comments previously made by former Treasury Minister Philip Ozouf who, last year, said that work would not start until 200,000 sq ft of office space had been pre-let.
That comment was simply a ‘mistake’, current Treasury Minister Alan Maclean said this week.
And regardless of this, the JDC seem confident that more tenants could be signed up soon, and have claimed that another firm could be on board within the next six to eight weeks.
Those against the scheme are due to take part in a protest at the Gloucester Street end of the Esplanade car park at 2.30 pm on Sunday.
Ahead of this, the JEP asked both sides to put forward five reasons why they think their future vision for the site are right:
1. There is currently more than a dozen businesses showing strong interest to take space in the Jersey International Finance Centre.
The reason why the JIFC must proceed is because Jersey’s finance industry is short of suitable office space with only 15,000 square feet of Grade-A office space currently available.
This small amount of space is spread across four buildings – the vacancy rate for this type of office accommodation is less than one per cent.
This means there is nowhere for existing local businesses to expand and grow.
It also means new businesses thinking of moving to Jersey have little or no choice, which puts us at a disadvantage to our competitors, at a very critical time for the Island where employers, both new and existing, are needed to create local jobs to help grow the economy.
2. The public owns considerable land holdings either directly through the States, or through the Jersey Development Company.
Our purpose is to manage and develop that property on behalf of Jersey taxpayers in order to provide returns to the taxpayer that are more than double that of direct land sales.
For example, if we were to simply sell the land at the Esplanade car park on behalf of taxpayers, we would receive around £15 million.
We would also have much less control over the delivery and quality of the public spaces.
By developing the land ourselves, we will return around £50 million to the Treasury and create lasting, appropriate public spaces to a higher standard than we’ve seen in the past from private developers.
3. UBS, a significant business and employer in the finance industry, has recently signed a legally binding pre-let agreement for the first building in the Finance Centre.
Locally based bank HSBC has agreed to fund the construction of the building because their independent ‘Red Book’ (mandatory practices for Royal Institute of Chartered Surveyors members undertaking valuation services) valuation has provided a far higher value than the loan they are providing.
Therefore, there is virtually no risk to the taxpayer and the pre-let secured was sufficient to raise the funding necessary for the construction.
We have not needed to ask for a guarantee, or letter of comfort from the States, because HSBC has secured the loan on the value of the finished building and its legally binding pre-let.
4. Harcourt Developments, the former preferred third party developer for the Waterfront, intended to ambitiously undertake the entire Esplanade Quarter in one phase.
Because the Esplanade Quarter is such a strategic site for Jersey with a major arterial road running through the centre, the States agreed in July 2009 that Harcourt must pre-let 200,000 sq ft before they could commence construction.
For various reasons, Harcourt was subsequently dropped as the preferred developer.
In 2010 the States Assembly agreed that the States Development Company be set up and for it to mitigate risk by phasing the development and obtaining ‘a sufficient level of legally binding pre-sales or pre-lets to fund the costs of constructing the first phase of a scheme’.
In accordance with the States directive, JDC phased the delivery of the project to be built on a building-by-building basis, which equally meant that the level of required pre-let(s) needed to be phased.
5. The development not going ahead would have serious consequences, namely:
I. The States, through JDC, would not be trusted to enter into negotiations with important institutions operating here. It costs a considerable amount in professional fees to finalise negotiations and potential tenants would consider JDC too risky to deal with.
II. The compensation pay-outs would climb into millions.
III. A significant proportion of the money spent since 2011 would be wasted but more importantly, the development profit of £35m would be lost.
IV. If JDC were disbanded, there would ultimately be only one major developer on the Island creating no significant competition. This would then drive prices for office accommodation up making us an expensive jurisdiction to operate from and community open space would not be delivered to the same quality or quantity.
V. Businesses looking to relocate to Jersey would continue to find it challenging if there’s a lack of suitable office accommodation available. If businesses choose other jurisdictions over Jersey, or local businesses relocate elsewhere due to difficulties finding high-quality office space, this could cause many job losses and limit tax revenues, which may ultimately increase our taxes.
1. The Jersey Development Company has announced an insignificant pre-let of about 16,500 sq ft and with possible incentives to the tenant that we are not privy to.
This does not justify moving on site, given the famous assurance by Senator Ozouf last February 2014 that at least 200,000 sq ft would be needed as a minimum pre-let.
We have had five different assurances from Senator Ozouf between 2009 and 2014 that there would be a pre-let agreement of 200,000 sq ft to make this work.
It’s true that I voted in favour of the development but that was on the basis of having a major pre-let.
I do not believe that this figure was just a mistake – Senator Ozouf does not make that kind of mistake – it is simply not acceptable as an excuse.
2. We do not understand why a pre-let has been signed just weeks before a hugely important Corporate Services Scrutiny Panel report on the financial viability on what the Jersey Development Company are seeking to do – we believe it will lose money.
The States are saying that this Scrutiny report should have been wrapped up by now by the previous Scrutiny Panel, which was led by former Senator Sarah Ferguson.
I believe there were failings in that process and that the independence of that Scrutiny report may have been compromised.
The Scrutiny Panel must be allowed to complete its work and present its findings before anything can go ahead.
3.The Jersey government must surely be the only government in the western world that is actually involved in the construction of office accommodation for wealth management and finance industry private wealth companies.
The States should not as a government be building offices for private companies.
It is morally wrong for a government such as the States to be building office space for finance companies given widespread criticism of offshore finance.
The States should not be getting involved.
If a developer offers the JDC however many millions the land is worth then I would suggest that the government must consider that and take away the risk.
I am not against Jersey having a finance centre but I am against the government getting involved in its construction.
4. There is sufficient planning approval for at least 500,000 sq ft already approved in St Helier and the existing Esplanade itself can yield at least another 800,000 sq ft
There is a massive danger of over supply if all of these plans go ahead, which could affect the market.
Senator Maclean has said that they are talking to 13 other potential tenants for the JIFC, but those companies will also be talking to other developers.
5. This Esplanade car-park site is part of the 2008 Waterfront Master Plan and this Master Plan is now so out of date that it needs to be replaced.
Major recession has hit Jersey and the Finance and Wealth management industry and what was needed then is not the case now.
This Master Plan was written before the financial collapse, before the bank bail-outs, before Northern Rock went bust. It was written in a time of huge economic expansion.
We are in a situation where we have a Master Plan which was designed for the boom times and is now completely out of date and not what we need.
The whole plan needs to be scrapped and started again and designed for what the Island needs now.
Power denies campaign is a way back into the States
A FORMER States Deputy has said that he will not be standing for election again and that he is not ‘positioning himself’ for another campaign by opposing the proposed Esplanade finance centre.
Sean Power, who failed to gain a seat in last year’s Senatorial elections, has denied that a campaign in which he is heavily involved to halt development of the Jersey International Finance Centre is to promote himself as a future States Member.
Mr Power also said that he expects Treasury Minister Alan Maclean and the board of the States-owned Jersey Development Company to resign should a Scrutiny Panel report on the JIFC, which is due to be released later this month, provides ‘projections significantly different from those presented’.
The former St Brelade Deputy said: ‘I have been asked numerous times in the past week whether I am doing this to promote myself or to position myself as a possible candidate in any by-election between now and the next general election.
‘The answer is a categorical no. I will not be contesting any election in Jersey.
‘I failed as a candidate in the October election and I accept that.’
A protest against the JIFC is due to be held on Sunday at 2.30 pm at the Esplanade car park.
