Recent Posts

Council or Bank Manager?

The city council claims to be under pressure to get its plans for Fletton Quays built. It is so anxious about this that it plans to decant itself from its own rather lovely Town Hall in Bridge Street so that it can rent out the space and encourage companies to join it on the other side of the river in a patch of land which would make a lovely river park or walkway and serve as a rain shed for the city, even a flood plain, if we were thinking in a truly sustainable way about what a river bank really is.

The nature of this pressure is not fully understood. At least I don’t understand it: I simply don’t share it, and given the amount of empty space available in the city, residential, retail and commercial, I admit to being bewildered.

I am wondering also if the nature of the pressure is a bit more complicated and also whether the council isn’t so much being pressurised, as positively rushed into what could be a potentially very damaging decision. A decision is scheduled to be made at 10am on Monday morning. Are we sure we understand what the rush is all about?

A few of us have been looking at the detail behind the company the council is planning to lend money to: Norlin Hotels Holdings Limited.

(see: http://www.peterborough.gov.uk/news/council/council-set-to-support-hotel-construction-on-fletton-quays/

and http://www.peterboroughtoday.co.uk/news/politics/council-set-to-lend-15-million-for-fletton-quays-hotel-on-peterborough-s-south-bank-1-8156975)

Norlin Hotels Holdings Limited turns out to be one of a huge network of companies and a couple of people have spent a day or two hunting for assets, a history of solid achievement, or anything to reassure us that this is a good thing. So far we haven’t come across much to reassure us. In fact warning lights are flashing everywhere.

The company is based in Northern Ireland. One of its directors is Stephen Brian Symington.

Why would Peterborough not opt for a local developer? Local builders? A local workforce? Is the company it is talking to really based in Northern Ireland, or is it just an address?

I remember talking to people working on the academy building project and they told me that they came up from London every day by bus. One of the men I spoke to had only recently arrived from Africa which really got me thinking about the nature of the investment and exactly how it was managed and who benefited most from the choice of workforce. Looking back now, I wonder what would this man have done if his manager wanted to skimp on wall ties, for example? What were his skills? How well qualified was he? Was he in a position to probe something if it did worry him? Was his immigration status a problem for him? Could this put him in difficulties in negotiations with an employer? There is no evidence of a problem like the wall tie scandal happening in Peterborough, but a wall certainly did collapse for want of a few ties in Scotland. What complicated decisions led to that? We need to stop assuming that everything is done for our benefit and we need to start asking basic questions.

What was the tender process? Who got involved?

Who benefits from the decision to appoint a Northern Irish developer?

Photos from Stephen Symington’s facebook profile

Who is the developer? What do we know about them? Why is Peterborough, home of bricks, having to go so far to find a builder? Why is the council, which is so keen to focus on a “circular economy” not focussing locally and looking at people who have been educated and trained locally? Shouldn’t we be shortening the distances workers need to travel to find work?

Then I see “Antigua” in an associated company’s name and I start thinking about tax havens. Quite a bit of Peterborough is now owned by offshore companies. This lowers the tax revenue available to central government. Has this got something to do with the city’s choice of company? What is the council’s approach to companies domiciled in a tax haven?

And then since June it simply is not possible to ignore the heaviest political pressure on the Conservatives. Since the General Election, the Conservative Party has been and remains totally dependent on the support of the Democratic Unionist Party to maintain its grip on power in Westminster. It is unlikely that the support is provided freely: the DUP is not known for being soft or a push over. Northern Ireland politicians will be trying to get as much out of this situation as they possibly can: and rightly so. But then, how exactly are they doing this? Could there be a party political aspect to the council’s choice of company? Is leverage being applied? If so is the council in a position to understand that sort of pressure, and to fully understand any risks which might be entailed?

Could this really be all about moving money or debt around in ways which are made to be difficult to observe? As appears to have happened for entirely political reasons here.

The key issue is risk. What risks is the council running and has it got its eyes fully open to potential risks?

I’ve spent the whole day (unpaid) searching for evidence that these two directors are experts in developing hotels. I haven’t found it. Others have had exactly the same experience. I’ve looked at all the active companies which have Symington or Irwin as a director. I’ve discovered that these two directors work closely together, that this set of companies is large and some are involved fun in the food industry, the racing sector, one or two are in the movie sector and that quite a few of them don’t file their accounts on time and several owe money to all sorts of financial institutions. Eastonville Investments Limited is controlled by a company based in the Cayman Islands, so I have no idea if the assets I was expecting to find are stashed safely and invisibly over there. I still think the organisation the council is talking to (which I still can’t really see as a functioning entity online – no website, for example or contact details) should be able to get a commercial bank loan if they have a viable business in our city, which I very very strongly doubt they do have, especially since they are hooked in to the old model of a hotel, rather than the fantastically popular AirB&B concept. The only company which has bothered with a website appears to be in biotech and has not thrived. Even if the hotel is a brilliant success, what impact will it have on the hotel sector already in the city? One hotel has already become infamous for housing Peterborough’s steadily growing homeless population. Is the Hilton chain really wanting to come to Peterborough?

If it goes wrong, the council will end up owing money against land it currently owns outright and owes nothing on, but which could fall dramatically in value in relation to any loaned amount borrowed against it. If that were to happen, the council tax payer will pick up the bill. Cllr David Seaton has honourably promised to resign if it does go pear shaped, but, frankly, resignation won’t cost him £15M.

One of the directors of Cawlands has demonstrated an ability to make the best of a very tough economic and political situation  but however clever his recovery of property in a downturn was, I’m not sure that our council should be blowing the sort of bubbles into our local economy which could positively contribute to inflation of or a collapse in asset value.

Nor do I believe that our local council should in any way be in the business of baling out a bit of Northern Irish commercial property. The registered address of a network of companies, including the one which the council is proposing to deal with is 41-43 Waring Street, Belfast, County Antrim, BT1 2DY. And Waring Street Limited is also the name of a company. This is what that address looks like on google maps:

41-43 Waring Street, Belfast, County Antrim, BT1 2DY

And these are the charges which are currently laid against that company: that very land and that very building.

 

  1. “Because they took your van off you” Leave a reply
  2. Accounting for Rhubarb Bridge Decision Leave a reply
  3. Rhubarb Bridge Stakeholder Event 1 Reply