Written evidence submitted anonymously
I am the director of a company, established in Leicester since 1990, and in July 2015 was subject to a Compulsory Purchase Order (CPO) by Leicester City Council, due to the Waterside Regeneration Plan. Since then I have tried unsuccessfully to re-locate my business and have been unduly impacted by the Local Authority’s (LA) approach to Commercial property.
My company produced clothing for some of the world’s most exclusive luxury brands retailing at between 800 to 12000 GBP per garment. (I am precluded by Confidentiality agreements from naming them). Our essential requirement was what we already had, a central location (because we recruited from all over the UK) and good natural light (essential for the product). Initially we were optimistic that with Leicester’s textile history and the abundance of old textile mills we would not have any issues re-locating the business. This did not prove to be the case, and the business has been forced to close. I believe the LA’s actions have prevented my company from behaving in an equable manner to the detriment of my business. I have made several bids well in excess of asking prices for properties, but have failed, due in part to the LA’s commercial investments and approach to commercial property.
We had appointed Lambert Smith Hampton to assist us with finding a property. They have failed and have produced a report highlighting the paucity of good property in the City. We later appointed a PR agency to also assist us with finding a property, but with little success.
Textile Manufacturing is a core Industry in Leicester, “one of eight key priority sectors that will support the delivery of the aims and objectives of our Strategic Economic Plan (SEP)” (Statement taken from the “About Us” page of The Leicester and Leicestershire Enterprise Partnership (LLEP)). It is very disappointing that 25 jobs have been lost in a core industry due to regeneration. The Mayor is aware of the situation as he was asked about our predicament live on Radio Leicester.
Vaughan College owned by the University of Leicester was 200 yards from my premises. It was on sale at £695,000 for the freehold in about March 2015. Even before the CPO, I was interested in the property as it could bring 2 of my premises together and form a sound basis for my business going forward. However, immediately prior to informing me of the plans for Regeneration, the Council purchased the property themselves.
The LA sent out “Outline Planning Application” letters to businesses in the Regeneration area on the 15.07.15., informing them of the LA’s plans.
The document “Proposed Purchase of Vaughan College” from the LA is dated 08.07.15, and states as the purpose “This report seeks approval to purchase Vaughan College from Leicester University”. It recommends a purchase price of £300,000. It has become apparent that the deal was made in May 2015 before the decision to purchase was approved by the Mayor in July 2015. The property was purchased for £309,000 including property tax. It states under “5.1 Financial Implications”……. “ongoing costs will depend on the use to which it is put”- implying that there is no pre-determined use for the property at the time of purchase.
The LA is obviously privy to confidential information concerning Regeneration plans, because the LA formulates them. The question to be asked is did the LA use this confidential information to inform their decision of purchasing Vaughan College? If so, did this misuse of confidential information preclude any other purchaser such as myself from competing in a fair manner? Also did this act fail to maximise the return for the University of Leicester? The property would have been worth substantially more to the University if all the businesses being displaced by the Regeneration plan were to be aware and bid for it.
I requested the council to explain their decision at the time to no avail. Since then, almost 5 years have passed and the building is boarded up and derelict. We had also asked for temporary use, whilst we searched for alternative sites but this was also not forthcoming.
I feel the dates and procedures need to be investigated further to determine that all due actions were legal. I find the removal of a listed property to rot whilst denying a core Leicester Industry relocation unacceptable, and the LA procedures need examining.
The former headquarters of Leicester City Council were at New Walk Leicester. Due to the 1970s structure being unsound, these buildings had to be demolished. The council paid for the demolition and the clearance of the site. It was then sold to the developer Sowden for £24,000. The value of the site is conservatively estimated to be £7 million.
One of the Mayor’s own Labour Councillors :Castle ward councillor Patrick Kitterick said: “I do not recall us ever being asked, having spent £5 million on the remediation of the site and then a further £1 million on public realm improvements, that we would at the end of it be receiving a one off sum of £24,000. “
The site is fully developed and operational since October 2018. 200 yards away is one of Leicester City Centre’s premium retail streets- Market Street. Since the regeneration of New Walk- successive businesses have closed on this street. It is now far worse than prior to the regeneration. How is the Council’s very generous offer to Sowden measured for its success? 15 of the 33 retail units are currently empty.
I was born and grew up in Leicester and am reasonably well informed. I have found no reasonable explanation as a city- dweller as to why such a valuable asset can be given away for such a paltry fee. I am aware that Sowden are partners with the Council in several other developments. What is the basis of this relationship?
I would be grateful if the accounts committee could elucidate and explain to the people of Leicester what we do not seem to be able to get from the Mayor or the Council. It is disappointing that the local media also do not seem to be in a position to assist on these fundamental matters. Why was this site sold for £24,000?
I engaged the services of a PR company to assist me in finding a property. After extensive publicity, including radio and television, we managed to find a leasehold property, 84 Vaughan Way, Leicester. The property had 36 years remaining on the lease, and it was professionally valued at £250,000. I had made an offer of £420,000 which had been accepted. The property was in very poor condition and needed several hundred thousand spending on it. The valuer advised that the property would become a depreciating asset after less than 20 years remained on the lease and I would have difficulty selling the property in future
The freeholder was Leicester City Council. The Mayor and the Head of Property were approached to see if they could assist by either extending the lease, or consider selling me the freehold. It was pointed out to the Council that under the Council’s “Framework for the Disposal of Property” section 5.2 “Exceptions to Open Marketing”- businesses displaced due to regeneration were allowed to be given preferential treatment if the Council so desired. Unfortunately the Council declined to assist, citing by e mail that they did not own the lease- and that where a property provided an income to the Council it did not sell.
Directly opposite 84 Vaughan Way is 125-129 Vaughan Way. Despite the Council maintaining that it does not sell when an income is being derived from the property, this property was sold for £215,000 on the 12.07.17.
It is conservatively valued at £3-4 million. In the “Record of Decision” signed by the Mayor, the decision is marked “not for publication” as a “special purchaser” and that “no open marketing has occurred”.
I find the sale of this property difficult to reconcile with the reply I have been given for my attempted purchase of 84 Vaughan Way.
The Council is pursuing an aggressive strategy of property purchase and in doing so denying businesses and individuals the opportunity to compete on and equable footing. In doing so, it is failing to regenerate the areas it is attempting to improve and denying valuable businesses the opportunity to invigorate and areas themselves. The removal of property from the open market is having a severely detrimental effect on the success of the City. Losing an established 30 year business and 25 highly skilled well paid jobs is not regeneration.
May 2020