Highland Council are charging interest on the Sandown elements (approx 734K) of the £2,815,143 loaned to Nairn for Community Centre and Sandown purposes (to be repayed by the Common Good Fund one day). The £390,000 'incurred clearing land title' already attracts interest it seems but yesterday the full Highland Council agreed to charge interest on another £344,410.78.
Dramatically the rate to be charged was dropped from 4.55% to the 'standard rate' (around 1%) in a note circulated seconds before the debate on this item was due to take place.
The fact that interest has been charged from Day 1 on the 390K will come as a surprise to many.
Update: the 344K + is made up of:
'External costs totalling £305,189.91 (legal, property and land surveys and marketing) and Highland Council costs totalling £39,220.87 (legal, property and planning) make up the balance.'
Update: What Liz said at the meeting and Sandy's response:
There was some brief debate around this item and Liz stated:
'At the time I actually moved against clearing the land title because I felt, what's the point of paying the farmer to get out when we don't know how long it's going to be sitting with nothing happening to it. So I did move against that at the time and at the Highland Council when it came here for the trustees because I felt we could still be getting the payment from the farmer for the rent.'
Liz was concerned interest had been charged on the sum and asked how much had accrued, she welcomed the lower rate but indicated that nothing had been mentioned about interest at the time. She had another concern however and said that there would be 'tremendous pressure on Common Good trustees to now move as quickly as they can to get Sandown sold' as they couldn't leave it sitting about with the interest accruing.
Sandy thought the payment was good value and said that the agreement with the farmer was for 10% of the development value and it would probably ended up 50% of the development value if it had been left any longer.