Problems mount for Highland Council over Nairn town centre

It seems the Council loaned money to help build the Community Centre and hoped to get it back from the sale of the land to the Co-op. It hasn't happened however and the disaster that is the town centre seems to be worse than first thought. 'Interest on the loan is estimated at around £36,700 per annum.' according to the Press & Journal. (of course the community centre has a debt of its own too but here we're just talking about the council's tab). Further costs too:

'A report to go before the council’s resources committee next week also reveals that the local authority spent a total of £21,858 on fees while pursuing the sale of land to the Co-op.'

Now we can see why it would be handy for the Highland Council to sell town centre land to developers for flats, a move which is proving highly unpopular among the populace. The brewing discontent should come to a head at the Ward Forum meeting on Weds night.

More in an excellent Press & Journal article here.

Sandown loan interest charges - a contradiction?

Gurnites will see in the previous article the thoughts of Sheena Baker on the latest twist in the Sandown tale, she feels that interest charges should not be retrospective, she says:

'I have no problem with interest being charged now that the sale of the Sandown land is out of the question but it should be from yesterday at 1% and not retrospectively.'

Now a minute of the Ward Forum/Nairnshire Partnership of 26 August 2009 seems to prove her point. Item 4.3 states:

'WG explained that at the last Ward Forum, Sheena Baker had raised questions regarding the financing of Nairn Community Centre by the Nairn Common Good Fund.

Total cost of £2.814m to date with the capital element to fund the Community Centre being £2.081m. The balance went to pay off the tenant farmer and to cover a range of costs associated with legal fees, marketing fees and other smaller items. To date, no interest has been applied by Highland Council. WG highlighted that interest may be applied in the future but this would be a decision for the full Highland Council.
SB commented that it was concerning that the costs involved were around £3m and the Council appeared no further with securing the sale of Sandown.'

The Document presented to the full council yesterday stated in connection with the £390,000 paid to release the land title: 'This sum was charged to the Nairn Common Good Fund when incurred and already attracts an interest charge from the Council.' Now no mention of that at the Ward Forum meeting. Would this have needed the agreement of the full Council?

Thanks to Sheena for forwarding the relevant minute of the ward forum - here at the Gurn we tend to agree with her - the meter for interest charges should only start running from yesterday and not before.

Sandown Lands interest charges - Sheena Baker speaks out

This in from Sheena who has been keeping a close eye on Sandown matters for some time:

'Did I not ask at a Nairnshire Partnership meeting a several months back several searching questions relating to the Nairn Common Good Land and whether interest was being charged, if so at what rate etc. I said when I asked the list of questions that I was not expecting answers there and then but it was agreed that Wm Gilfillan would take the questions away and research and answer them at the next meeting. This he did and we were assured at the next meeting that interest was not being charged but that it might change in the future. Nothing, I repeat nothing was said about there being any likelihood of it being charged retrospectively.

I was 100% + right to ask the questions and to get the answers. This was noted by yourself on the gurn and also by the Nairnshire Telegraph. It may have been as far back as last August, I do not have the relevant file to hand to check back copies of the minutes of the Partnership meeting.

The question arises once more about the Trustees who make decisions re Common Good Assets and as I said at that time we need people as trustees other than Councilors who are 100% independent and who would challenge such decisions!

I have no problem with interest being charged now that the sale of the Sandown land is out of the question but it should be from yesterday at 1% and not retrospectively.

Comments re the mal administration of the land used by the farmer are more or less correct and again I think it is a “cheek” for the Councilors to conveniently forget that aspect or “sweep it under the carpet”.

The two major players who will have clear memories of the farmers land saga are Bill Young and Frank Allen. Frank was, at the time, the area ward manager and Bill Young took a major interest in the various legal aspects of the case on behalf of himself and the “concerned community”.
Memories fade but this needs revisiting and, in my humble view, the retrospective interest charge needs challenging.

Sheena Baker'

Sandown loan money - interest charges shock!

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.'

Read the document that went before the Highland Council here.

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.

The Sheena Baker Inquisition

Tonight Sheena didn’t mess about. She got straight down to business, asking the status of the Council’s loan to the Community centre in regard to the refusal of the Sandown planning application.
Sandy Park replied that there was no change in the status of the loan, a sum in excess of £2,000,000 pounds. At the time the Sandown Lands were the only asset that could be offset against the loan.
Sheena was worried that the debt was being run up even more but according to Sandy the debt was in fact static. Sheena then expanding to take in comments reported in the Nairnshire on the behalf of Mark Cummings of the PR company Invicta that had been employed by the developer. William Gilfinnan told the meeting that there was nothing in the background that wasn’t know about and reiterated that the developer had three options. Earlier he had stated that the developer could appeal, resubmit the application or walk away.
Sheen persisted with her questions, she wanted to know if given the new circumstances if the Highland Council could write off the the loan. Sandy replied that he thought that the Council would expect the money back and if the council were to consider what she had suggested then he believed that they would be very reluctant to do that.
William Gilfinnan on the behalf of the council stated that the asset was still there and it was a marketable commodity.

It was good to see Sheena in action again, she quite often is prepared to ask difficult questions of the local powers that be.