For months there has been an ongoing clash between the Jersey Development Company and the Corporate Services Scrutiny Panel, which is conducting a review of the flagship project to be built on the Esplanade car park.
Yesterday it emerged that the panel had issued a summons, via the States Privileges and Procedures Committee, to the JDC in an attempt to force the disclosure of further information about the scheme, but that the States-owned body had challenged the move.
The tension follows the publication of two independent assessments of the controversial six-building project, which began this summer.
Towards the end of October Treasury Minister Alan Maclean revealed that global property experts DTZ had said that once completed, fully leased and sold, the finance centre could return as much as £95 million to the public coffers.
However, a few weeks later, Scrutiny published an interim report on the project, based on a viability study by auditors Ernst and Young (EY), which raised doubts over the project and said it was unlikely to return £50m, let alone £95m.
Shortly after the panel began conducting its review, members clashed with the JDC over the disclosure of commercially sensitive information. Eventually their advisers, EY, agreed to sign non-disclosure agreements in order to view certain documents held by the States developers, but could not discuss them with the panel.
Now, a similar situation has arisen again, with the JDC resisting Scrutiny’s attempt to access information.
While facing questions from the panel at a public hearing yesterday, Senator Maclean admitted he was in a challenging position as a representative of the public and a politician with responsibilities to the JDC.
Under forceful questioning from the panel’s vice-chairman, Deputy Simon Brée, who asked whether he supported the JDC board’s legal challenge to their summons, Senator Maclean said: ‘I have a difficult responsibility here in terms of managing this particular situation.’
When asked for a yes or no answer, the Treasury Minister said he supported the JDC’s position, leading Deputy Brée to say that that showed a lack of support for the scrutiny process – a claim that Senator Maclean denied.
Over the one-hour session the panel also questioned Senator Maclean on the potential profit return of the JIFC’s first building, the cost of dealing with contamination at the site and the different views about the demand for office space.
Senator Maclean told the panel that according to the most up-to-date figures the first building could return a profit of £7.5 million, and that that estimate accounted for contamination costs.
The panel comprises chairman Deputies John Le Fondré, Simon Brée and Kevin Lewis and Constable Chris Taylor.
- A later phase of JIFC requires the delivery of public realm improvements including a park and four-level basement car park. The current cost of this is £27.25 million and it is very difficult to see how this can be funded by the level of profits that are likely to be generated, even if demand for these later phases could be demonstrated, and the development delivered
- EY have severe reservations as to whether there will be sufficient demand to enable the full JIFC proposals totalling 480,000 sq ft to be developed in the medium term, say five to ten years…
- ‘There is an insufficient size to the market and little prospect for this to be able to grow to sustain the size of scheme as proposed
- ‘The parties should seriously review their aspirations for both the JIFC and the Esplanade Quarter as a whole to arrive at a more balanced and commercially viable mix of uses and public realm improvements
View the full report here
- Plans for Building 5 the second unit of the JIFC were approved by the Planning Applications Panel
- That decision was subject to an appeal by rival developers C Le Masurier Ltd and is due to be reviewed by an independent planning inspector
- Backbencher Deputy Montfort Tadier lodged a proposition calling for work on the first building of the scheme to be delayed until the outcomes of the Scrutiny review were known
- Before that proposition was rejected by the States, campaigners formed a human chain around the Esplanade car park to show their opposition to the project
- The JDC announced that Swiss finance firm UBS had agreed to lease around 25 per cent of the first building
- Work began this summer after the JDC said that securing the first tenant meant the building costs were covered and they could proceed
- Higher-than-expected levels of contamination were found at the site when excavations began
- Most recently the Treasury Department published a valuation report by real-estate experts DTZ, who suggested the scheme could return £95 million much more than previously estimated
