Cheshire East Council has released a report about plans to build an adventure playground at Tatton Park having been ordered to do so by the Information Commissioner.
The Council had refused to provide the Cabinet report looking at the business case for building BeWILDerwood, in conjunction with Bure Valley Adventures Ltd, to a campaign group.
They refused on the grounds of commercially confidentiality and because it was an internal communication which had been circulated on a 'need-to-know' basis.
The Save Tatton Action Group (STAG) then complained to the Information Commission's Office who ruled in January that the Council should disclose the report by February 12th.
The Commissioner considered that the significant expenditure of public funds, the need for public reassurance and confidence in the council's practice in relation to substantial projects of this type (with reference to the Lyme Green report), the significant local disquiet about the nature of the development and, on the basis of the publically available evidence, the apparent absence of a competitive tendering process all combine to produce a heavy public interest weighting in favour of disclosure of the information.
The Council chose not to challenge the Information Commissioner's findings that the Cabinet document should be released to the public.
Councillor Jamie Macrae, Cabinet member with responsibility for prosperity and economic regeneration, said "We understand the interest in this matter but we have taken the appropriate advice at all stages of the process and have acted fully within this.
"The Information Commissioner has accepted this but we felt it was important to clear the air, so that we could start a fresh and more positive conversation about the best way to secure Tatton's future."
The report reveals that:
- CEC would spend £1.5m building a new car park and related infrastructure within Tatton Park, which would be recouped over 20 years from income generated by additional park entry charges at Tatton.
- The Council would also provide a loan of up to £5million to BeWILDerwood, in order to allow them to build the attraction, which would be repayable over 12 years and provide CEC with access to the greatest share of the profits.
- BeWILDerwood would build and operate the attraction themselves, taking a 20-year lease on the site.
- As the sole investor the Council would have full 'step-in' rights to take over and operate the attraction if loan repayments were not made or if the attraction failed to deliver a profit.
- After the lease expires all the fixed assets within the site would become the property of the Council.
- By defining a development site for the attraction and leasing that site to Bewilderwood, the Council would not be required to undertake an EU compliant tendering process.
- The returns to the Council during the loan repayment period would be £300,000 to £400,000 per annum, increasing to £600,000 to £700,000 after repayment of the loan.
The concept of a new visitor attraction at Tatton Park is a key element of the 'Tatton Vision' which aims to create a self-sustaining Tatton Park which offers an enhanced visitor experience for both local people and visitors from further afield.
Councillor Jamie Macrae said: "Tatton Park is currently one of the region's premier visitor destinations, welcoming over 800,000 people each year.
"The Vision will build on the investment being made in Tatton and the commitment of the Council to secure the estate and its proud heritage for future generations.
"We are choosing to move forward with the BeWILDerwood attraction as we feel it would be sympathetic to the park's natural woodland environment. Additionally, we are confident it will attract new family groups to Tatton, create new jobs and open up a part of the estate that was previously inaccessible to the public.
"There is a range of groups in the local community that want to secure the future of Tatton. Now is the time for all of us with an interest in its future to work together to achieve this.
"The current planning application will shortly be resubmitted and I would encourage people to engage with us during the consultation period to let us know their thoughts."
The full Cabinet report entitled 'Tatton Park Business Development: Phase1' can be downloaded here.
Comments
Here's what readers have had to say so far. Why not add your thoughts below.
The activity will only be open during park opening hours (10am to 5pm or 7pm) so its not even likely that this will result in any nuisance (esp with planes flying overhead).
"The Council would also provide a loan of up to £5million to BeWILDerwood, in order to allow them to build the attraction, which would be repayable over 12 years and provide CEC with access to the greatest share of the profits."
What this really means that the council will provide £5 million of funding and take the greater risk of receiving a profit.
Not only is Graham's point on tendering important there is also the matter of whether there was a Due Diligence report whereby a reputable firm of accountants tested the figures to see how robust the income and expenditure are for this project (we have to remember that Lyme Green was 1/3 over budget in less than two months of the project starting). There is an initial investment of £6.5 million by the council. The £1.5 million for the car par is to be recouped over a period of 20 years by car par charges, in simple terms that would be a 5% payback, but how valid is it, what about maintenance during that 20 years. Whilst we have low interest rates at the moment in historic terms 5% hasn't been excessive any payback has to be discounted by the amount of interest the council could have earned on a risk free investment. Similarly we have inflation eating away, whilst we have an investment in today's money the returns that are projected from car parking will have to be substantially more to give back the spending power of today's investment, currently this is over 2.5% and has been as high as 5% in recent years. These issues also relate to the loan of £5 million to BeWilDerwood.
Some of us will remember Lancaster City Council and its joint venture with Noel Edmund's Unique Group which was to bring a Crinkly Bottom theme park to Morecambe with a projected income to the city of £1 million per year. The theme park opened and closed in 4 months and left years of legal wranglings between the company and the council. We also know that Camelot theme park has now closed and so perhaps the time for these themed areas has come to an end.
Whilst the BeWILDerwood project might pay for itself I somehow doubt that it will give 'true' returns that will finance CE contribution to running the Tatton Estate. Who is to say that the Council won't make a success of it and rewrite its recent history of mismanagement at Lyme Green. There again should the council really be involved in this when for me there are greater priorities.
I think residents of CE should give a big thank you to Information Commissioner for preventing the council from keeping council taxpayers from knowing details of the scheme. It is rather appalling that the term 'need to know basis' is used where the establishment of the proposed park within Tatton is hardly likely to be subject to competition.
If BeWILDerwood are confident they have a sound business case for the venture, why aren't the funds being raised in the private sector in the normal way? This just doesn't smell right to me.
"The returns to the Council during the loan repayment period would be £300,000 to £400,000 per annum, increasing to £600,000 to £700,000 after repayment of the loan."
During the loan period then surely CE's portion of the profit is from the gross returns (income less operating expenses, before any repayment of loan or interest) and Bure Valley Adventures Ltd pays the loan back out of its share of the gross returns. So if the agreed shares were 50/50 and a profit of £1,200,000 was acheived, CE would receive £600,000 and so would BVA, but BVA would then have to make a repayment of the loan of around £417,000 out of its gross return. If the loan is being taken out of the gross return before the share of profit then CE is in effect paying partly towards the repayment of the loan.
Another question that springs to mind is that of interest on the loan, has that been set?
At the end of the 12 year period the asset becomes CE, I wonder if by that time if it will have any value.
Perhaps we shouldn't ask too many questions or Michael Jones might threaten to build 2500 houses on the Park!
"Audit exemption for private limited companies
Most small private limited companies don’t need an audit of their annual accounts - unless the company’s articles of association say it must or enough shareholders ask for one.
Your private limited company’s accounts may be exempt from needing an audit (reviewed and confirmed by an independent accountant).
If your company financial year ends on or before 30 September 2012
Your company may qualify for an audit exemption if your company meets both the following:
has an annual turnover of no more than £6.5 million
has assets worth no more than £3.26 million"
If this still applies to Bure at the time of a partnership venture with Cheshire East it seems to me rather risky to be lending £12 million to a company whose asset value is less than £3.26 million and with a turnover less than £6.5 million. Granted that if the company was to fail CE has 'step in rights', one just wonders how successful CE would be if it was left to run the park.
Given all the unanswered questions around Lyme Green, Wilmslow Vision and the Handforth "villages" development, the resounding rejection by Wilmslow Town Council of green-belt development, Michael Jones's conflicting statements about rejecting any green-belt development yet endorsing same in Handforth; not to mention his claim to have discussed deflecting the HS2 rail route with George Osborne (subsequently withdrawn on orders from Number 11) how can we have any confidence in these Councillors we elected to SERVE, not GOVERN us?
If there has to be a play area in the park and I'm not against it in principal, it should be on a francise basis will no financial input by the council
Presumably, the lease passed solely to Cheshire East Council when Cheshire County Council was split in 2009. Who then is the true owner of property which is gifted to the National Trust, which is a charity? Is it the nation, ie the people, via the Trust, which is managed by a Board of Trustees. Interestingly, the National Trust has the unique statutory power to declare land inalienable - such land cannot be voluntarily sold, mortgaged or compulsorily purchased against the Trust's wishes without special parliamentary procedure.
If all, or even some of these things are correct, does that mean that the National Trust is in agreement with Cheshire East Council and Bure Valley Adventures Limited in their wish to create BeWILDerwood?
And, if it all goes horribly wrong and is a financial failure -
"As the sole investor the Council would have full 'step-in' rights to take over and operate the attraction if loan repayments were not made or if the attraction failed to deliver a profit."
What advantage would there be to the residents of Cheshire East that they have "step-in" rights to take over and run an unprofitable venture? Or perhaps Cllr Jones sees this as one of his new "arms-length" companies and a potential destination for some of his "deleted" senior managers.