What warms what’s left of the dying embers of our heart is when we set the hares running and questioning, enquiring Wirralians come running back to share their concerns with us.
So following on from yesterday’s Muse Musings story we have yet more muse musings.
The first observation concerns a report in Place North West with whom Wirral Council seem to have struck up a special rapport. After reading about the Wirral Council/Wirral Growth Company / Muse Developments ‘preferred development partner’ hook up what particularly caught the interest of one of our readers was something not included in the bulletpointed list of ‘initial proposals’ and which as far as we know , is not reported elsewhere (or indeed in Council leader’s Phil ‘Power Boy Pip’ Davies’ message to Labour Party members – see below) . Hidden in plain sight is the comment that ‘Place North West also understands that some of the office space is earmarked as a new headquarters for Wirral Council’ . No prizes for guessing which of those currently playing ‘let’s- pretend-to-be -property magnates -with public assets’ will be earmarked for spanking new office space if this proposal comes off . However it would seem to be politically inopportune to metaphorically shout it from the top of the Wirral Waters ‘International Trade Centre’ (see any number of previously published artist’s impressions). Read full article here : Muse chosen for £1bn Wirral regeneration
Meanwhile another switched on Wirral Leaks reader referred us to report of next week’s Cabinet 28th February where the Muse Developments appointment is to be rubber -stamped. We’re sure you all know the drill by now . Pip introduces the report and talks about challenges/ Tory cuts/ budget shortfall/20 Pledges/bigs up Wirral Growth Company and then the rest of the Cabinet chip in with carefully rehearsed variations of Pip’s paean.
We can guarantee that what won’t be discussed is some of the more problematic areas in the report identified by own of our readers :
Bidder A is Muse
Bidder B is BCEGI/Scarborough
An investigative journalist such as your good selves might want to look at how Muse develop and how this agreement is to be made. (And the so called ‘Muse tax). They are stating 50/50 but Muse never put any money into schemes. They borrow. The report states that the BCEGI/Scarborough bid matched the land value with cash.
3.32 Based on the business plans submitted, Bidder A requires a Council cash injection whereas Bidder B requires land investment as security for the cash equity that it would put into the Joint Venture (JV) on the Council’s behalf. In terms of the peak exposure, Bidder B had a peak security requirement of £7.5m whereas the peak cash requirement from Bidder A is only £3.96m. Therefore, under the worst case scenario where the market crashes and the developments stall then Bidder A’s proposal has a lower peak risk exposure. 3.33 The total returns from the proposed development of the 11 priority sites assessed under Bidder A’s proposals is c£30.4m. This is broken down as follows:
· Land Value (Capital) – £17.7m
· Profit (Revenue) – £11.7m
· Loan Note Interest – £0.8m 3.34 The majority of the financial returns from Bidder A are delivered to the council in the first couple of years of the JV being established. In fact, £27.8m would be received by 2021.
A couple of points which whiff:
If the market crashes, what happens to land value? Presumably it rockets towards zero, whereas cash is always cash and their £3.96m loss is absolute.
- If Muse aren’t completing until 2022 (one year later Bidder A), how can they possibly have realised 91% of total returns by 2021?
- The 7.5m land value is also Bidder B’s assessment which is much more than the actual land value!!!
Why are they happy to bear a risk of £3.96m cash against using their land intelligently! This doesn’t fit with the revenue & financial pressures that the council is under. I would have thought that an asset based investment would be more attractive to a cash poor authority.
You may want to also look into the relationship with WBC financial analysts GVA and their relationships with MUSE in other schemes. The whole thing is a stitch up. The Bidder B development is quicker and a much more financially sound offer without the council borrowing cash. Bidder A has 2 multi storey car parks and the council are saying this is a good thing! During the bid they were telling all bidders that they can’t fill or make pay the car parks they already have!
By the looks of it this one will run and run (and our hares are on to it). Meanwhile here’s the Pip-approved version of the story that the Wirral Council ‘leader’ chooses to share with the Labour Party faithful (and clearly the not so faithful!) Check out the final line (which we have put in bold) which is pure Corbyn-lite Common Purpose speak . We’re just left wondering whether Frank Field approved the Jezza references?
Dear Labour Party member
In the coming weeks, Wirral’s Labour Council will be announcing a new initiative to drive economic growth across the borough in what will be the biggest public-sector led regeneration programme in the UK.
Wirral’s development story began nearly 200 years ago when investors were encouraged to choose our peninsula to build great shipyards, factories and plan new towns and villages that were the envy of the world.
Today we face new challenges – how to fund our public services, improve job opportunities for residents, provide suitable housing, and attract new investment into our borough.
As you know, in 2021 this Tory Government will stop providing councils with the Revenue Support Grant, a vital source of income for us to deliver front-line services. While wealthy London councils may be able to get by on their council tax and business rates, for authorities like ours it will be a devastating loss of nearly £30m a year.
We have to act to secure the services we know our residents rely upon. As Jeremy Corbyn made clear in our 2017 Manifesto – “our public services must rest on the foundation of sound finances.”
Council’s Cabinet will meet on 28th February to approve a recommendation to appoint Northwest-based regeneration specialist Muse Developments as our joint venture partner to create Wirral Growth Company.
Muse has been behind a number of impressive schemes across the North West such as St. Paul’s Square in Liverpool and urban regeneration projects in Chester, Warrington and Stockport and we are impressed with their track record of working with local authorities and meeting a wide range of regeneration goals.
In what is an ambitious but responsible public-private sector partnership, the profits from the numerous developments will be split 50-50, with the Council’s share providing income to be reinvested to help compensate for the financial shortfall we face because of decisions taken by Tory Ministers in Whitehall.
This Council’s ambitions are shared by our new partner. We have enshrined in the guiding principles of the joint venture a commitment to deliver our 2020 pledges, to hire local workers, purchase materials and services from local businesses and to provide training and work experience for local residents through our relationship with Wirral Met College.
Three years ago, our administration set 2020 Pledges and I am pleased that Wirral Growth Company will play a key role in delivering these goals. We said we would create thousands of new jobs, attract 100s of millions in new investment, and provide good quality housing and protect and improve Wirral’s attractive local environment.
Wirral Growth Company will deliver:
£1bn Growth Plan
As the economy continues to flat-line under the failing, Brexit-obsessed Tories, Wirral Growth Company will be a game changer, injecting hundreds of millions of new investment in Wirral.
Buy Local, Hire Local
As our 2017 General Election manifesto stated, we understand the creation of wealth is a ‘collective endeavour between workers, entrepreneurs and investors’. That’s why I wanted to make sure Wirral got the best possible social outcomes from this deal, so have included commitments to hire locally, buy supplies from and contract with local firms, train local workers, and meet the highest environmental, health and safety standards.
There is a housing shortage nationally, and a need for appropriate new homes to be built here in Wirral. Our plans will include the creation of more homes right across Wirral, meeting and exceeding our affordable homes targets in a way the private sector alone never could.
Extra Care Village
With health and social care services struggling to survive under the Conservatives, Wirral Growth Company will develop an Extra Care Village to look after vulnerable residents because this Labour-led authority cares for all, especially those in the greatest need.
Thousands of New Jobs
Providing work for our residents sits at the heart of any regeneration plan. We predict Wirral Growth Company will help deliver more than 3,000 new jobs within the first three years. We will also develop and strengthen local ties with Wirral Met College to train the workforce of the future as part of a solid foundation for a local industry strategy.
With the deal being proposed, Wirral Council won’t be selling any of its assets, we will have full involvement in every development decision, we will benefit from the economic growth any regeneration creates and, as a 50-50 joint venture, the Council will benefit from the profits.
If cabinet approve the recommendation, the next steps include starting the conversation with you and local residents about what, where, when and how regeneration begins across Wirral.
I believe this is the start of an extraordinary new chapter for Wirral. Through our pioneering spirit, Wirral Growth Company can help blaze an urban regeneration trail that shapes our 21st century economic fortunes.
By using the strength of our common endeavour, I know we will able to deliver these bold plans to deliver for the many, not the few.
Members who are interested in learning more about Wirral Growth Company should visit www.wirralwellmade.com website for more details, or join the conversation on @wirralwellmade twitter account or wirralwellmade facebook page.
Cllr Phil Davies
Leader of Wirral Council