Cllr Pervez and Capital Shopping Centres

To Cllr Pervez

Were you aware of the contents of the attached letter 20th November 2012?

 

Did you agree and give permission for your name to be attached to this letter?

 

Have you any comment to make on the Council refusal to sell Land to Capital Shopping Centre in light of recent information from Gerry Clarke, Principal Solicitor for Regeneration:

1.    The development agreement does not prevent or restrict competition in the City;

2.    There are no provisions in the development agreement that specifically prevent the City Council from selling any of its land (other than land within the City Sentral development site) to a competitor nor are there any provisions in the development agreement which specifically prevent the City Council from supporting the expansion of the retail offer within the City Centre.

Can you now please now explain who, why and when the Council decided not to help Capital Shopping Centre develop its site to its full potential?

Ian Norris

Attached Letter

Development Agreements and Protection

In November 2012 Stoke Council were critised by opposition Councillors for refusing to sell land in Brewery Street and Bryan Street to allow the Potteries Shopping Centre to deliver its full expansion plans, Mr van de Laarschot said in the article Sale of land needed to extend Potteries Shopping Centre would ‘breach’ contract

But Mr van de Laarschot has now revealed the sale was in fact prevented by a legally-binding development agreement with Realis, which requires the council to help it build the shopping centre, now expected in early 2016.

In a letter sent to unaffiliated Hanley councillor Paul Breeze and seen by The Sentinel, Mr van de Laarschot said: “The city council cannot sell the land to CSC as this would in all probability be deemed as a breach of condition of the agreement.

“That does not mean we do not support CSC’s plans, simply that we cannot do so through a land sale until the development agreement goes unconditional.

That development agreement is now in the public domain well a heavily redacted copy is, and no where in what remains does it hint that the Council would offer Realis any form of protection from retail competion, one clause indeed seems to hint at complete lack of protection.

34 No restrictions on adjoining land Nothing herein contained or implied will impose or be deemed to impose any restrictions on the use of any land or buildings not comprised in this Agreement or give the Developer (or any person deriving title through or under it) the benefit of or the right to enforce or to have enforced or to prevent the release or modification of any covenant agreement condition or stipulation entered into by any purchaser from the Council or any lessee or Council of the Council in respect of property not comprised in this Agreement or to prevent or restrict in any way the development of any land not comprised in this Agreement.

UPDATE

There is NO legal clause in the development agreement as confirmed by the Councils Solicitor today:

from Gerry Clarke, Principal Solicitor for Regeneration:

1.    The development agreement does not prevent or restrict competition in the City;

2.    There are no provisions in the development agreement that specifically prevent the City Council from selling any of its land (other than land within the City Sentral development site) to a competitor nor are there any provisions in the development agreement which specifically prevent the City Council from supporting the expansion of the retail offer within the City Centre.

Realis mulls discount debt buyback to fire up City Sentral

debt purchase would free up capital to advance development of mall.

David Hatcher reports published by Property Week

Realis Estates is in talks to buy back the debt secured against its City Sentral shopping centre project in Stoke on Trent in a bid to start development on the stalled scheme.

Oaktree Capital Management owns the £24m of debt secured against the scheme but could sell it back to Realis for as little as £65m a 73 discount The private equity house bought the debt last August as part of Project Harrogate the sale of a loan portfolio by Lloyds Banking Group with a face value of £625m that it purchased for around £250m.

It is thought that Oaktree valued the debt secured against City Sentral at around £5m Both parties are keen to strike a deal If Realis does buy the debt for £65m or restructure it, it would decrease its interest payments increase operational cashflow and free up around £175m more capital in the long term to pay retailer incentives, enable compulsory purchase orders and gain detailed planning.

It is understood that several construction companies have expressed interest in buying the debt to obtain a longer term agreement for the construction contract It is believed that around £15m of additional funding is needed to bring the site to a stage where development can commence

The Difference a Year Makes

In March 2012 Realis Estates acquired the site of discount store Merlins in Witney,

Duncan Mathieson said: “We intend to demolish the existing structure, which is not in keeping with the surrounding architecture and does not reflect the character of the market town, and replace it with a more picturesque building that blends with its environment.