by Jon Silver (@InvisibleMapper)
This week hugely problematic issues were revealed in a huge public-private partnership that aims to transform 155 hectares of urban land in Manchester, highlighting a city leadership determined to continue on with an increasingly broken urban development model despite growing public anger.
Far East Consortium (FEC), an international real estate company, incorporated in the Cayman Islands and listed on the Hong Kong stock exchange were selected as Council partners to develop a series of neighbourhoods in a huge area of the city now known as the Northern Gateway. FEC seem to have little experience of sustainable neighbourhood regeneration, rather specialising in high end apartments in Hong Kong, or car parks and hotels across south Asia or a casino in Australia. So why were they selected through a so called ‘competitive tendering process’? Primarily it seems the company were selected because of promises to invest £200 million into the plan and contribute to a range of objectives around building sustainable communities. This week as details of a public loan and a new planning application came to light these promises seemed to be breaking apart. But why are the loan and the planning application problematic?
The Leader of MCC, Sir Richard Leese stood in front of the Resources Scrutiny Committee this week defending a £11 million loan from the Council in order for FEC to buy a number a plots. In previous years such deals seemed to sail through without questions or proper scrutiny but now Councillors on the committee are asking difficult questions as reported by the MEN’s Jennifer Williams. One asked that if, “£200m is available to invest, I’m just wondering why we’re lending money at this stage to increase the land holdings or to assemble land?”. The leader of the Council was not able to give a sufficient answer because in effect this is a financial subsidy for a company that has promised to invest its own capital. Furthermore, it turns out that two of these plots have already been purchased by FEC in previous months so the land has already been secured meaning that the company in in effect asking the Council for a refinancing deal. It was only last year FEC was promising tens of millions of pounds in investment and now it is asking a Local Authority to take a loan out. It prompts the question about whether FEC is facing a cash crisis or whether it had any intention to properly finance the Northern Gateway itself. Another Councillor on the committee perhaps said it clearest, asking “now we are giving them the money. So why do we need them?”.
And it was not just the loan request that caused an outcry this week concerning the actions and intentions of FEC. In proposing a new development in New Cross named Addington Street with 80 apartments FEC have shown that all their talk of sustainable communities and affordable housing does not match what they are actually doing. Piccadilly ward councillors informed the public:
The proposed Addington Street plans have no affordable, social or council housing & no firm contribution to provide any elsewhere. We would encourage Mancunians to make this a clear demand in the consultation.
This failure to even consider such requirements suggest FEC think they can extract profit through development in the city without making fair contributions to affordable housing provision. It is unlikely to pass. With some success very near to the Addington Street site in pushing developers of Swan House to incorporate 19 affordable housing units’ a precedent has been set by Councillors. The amount of affordable units at Swan House was far too low in comparison to the Council’s planning guidance of 20 percent affordable housing but it showed that developers can no longer profit without condition. FEC seem to think they are not liable for such commitments but they may find it difficult to secure planning permission unless they change their plans
In previous years’ developers have been encouraged by Manchester City Council thorough a policy that has allowed them to build and to extract profit from the city with little scrutiny and nearly always no contribution to building a fairer, more sustainable Manchester. In thinking that it is ok for a public subsidy to buy land for private profit and building apartments without affordable housing provision the Council leadership and the people running FEC are acting like its business as usual. They may yet be surprised.
20 June 2019