We recently revealed the £24’000 price tag placed on the one and a half acre site which housed the old Leicester City Council offices. Leicester Mayor, Peter Soulsby, has responded to those criticising his management of the development. He said he was “angry about the way members of his own party had portrayed the development” of the site, reports Leicester Mercury who also go on to say the council also paid for the demolition of the building, built in the 1970’s, with some of Soulsby’s Labour colleagues claiming he shortchanged the council because the site could have been sold for millions, which is entirely true as shown in our previous article about the rip-off.
The deal was struck between the council and the developers, Sowdens, and wealth managers, Mattioli Woods, who will also occupy the offices to purchase the freehold (the land under the buildings). The £30million scheme is almost complete and is expected to bring in 300 employees from their current Enderby offices and expect to employ a further 350 people bringing the total number of jobs to 650. The construction phase opened up 750 jobs and 16 apprenticeships, Sir Peter Soulsby cited, according to Leicester Mercury.
According to the Mayor, the only other serious proposal was a casino and “nobody would have thanked [him] for that.” But we’re not sure that’s true;
Castle Ward councillor, Patrick Kitterick, said “I do not recall us ever being asked, having spent £5million on the remediation of the site and then a further £1million on public realm improvements, that we would, at the end of it, be receiving a one-off sum of £24’000.”
Councillor Willmott said;
“It is a prime site and I cannot imagine that there were not a number of developers who would have taken it for a price considerably higher than what we are selling it for. I have asked time and time again for the value of the land and it has not been disclosed. It was a challenge to prise out the information about the freehold being sold for £24,000… The council spent millions of pounds demolishing the buildings and clearing the site… We could have at least recouped those costs.”
Kitterick goes on to say, “This is what we did when we demolished St Margaret’s Baths so Highcross could be built.” All of these raise very valid points. However, Sir Peter Soulsby’s attitude is that a tiny price tag of £24’000 is justifiable because the site was “crumbling”…New Walk Development Source: Leicester Mercury
The mayor does say, however, that the development will bring in at least a quarter of a million per year in business rates revenue which could be used to protect services but, we believe, had the council retained the freehold and charged rent on the site, they would be able to generate far more revenue to protect services, far more in fact than the £24’000 one-off payment received for the freehold. Perhaps it would be a deal breaker if the council didn’t sell the freehold with taxpayers footing the bill for the potential income lost, in which case, there would have been multiple more large developers and buyers willing to snap up the prime site piece of land at a more reasonable price which is closer to market value.
Why such a small price tag?
So far, beyond excusing the poor financial decisions made by our mayor and the local authority when handling the regeneration of the New Walk site as the site “crumbling” and the potential income that will be generated (that could have been generated by other occupants of the site if not Sowdens and Mattioli Woods), the taxpayers and constituents of Leicester have received no justification behind allowing the site to be sold for potentially millions less than it’s worth.
Soulsby did state that the site had a “negative value” but this would be expected after spending £30million on demolition on top of relocating all of the staff from that building into the Leicester Council Granby Street building.