Swanage Town Council has announced the sale of its 300 unit luxury caravan park and holiday complex to the Darwin Leisure Property Fund for a capital receipt of £7.25m. The deal includes revenue income of an annual ground rent of £30,000 for the life of the 105 year lease term.
Town Mayor, Mike Pratt says “This disposal means that we can take a positive stance in now addressing the town’s need for the benefit of current and future generations” before going on to say “the Town Council’s small administration team have been placed under incredible pressure over the past few years initially caused by the challenge by the Audit Commission who believe the Council does not have the legal powers to derive a direct income from caravan sales which is an integral part of owning a caravan park.”
On behalf of Darwin Victoria Brannen CIO, commented that “Darwin look forward to expanding their existing holiday park portfolio with the purchase of Swanage Bay View and implementing their business strategy, which will continue to operate and develop the park as a desirable holiday home location on the Dorset coast, whilst improving facilities that benefit not just the park owners but also members of the local community and support the town’s economy”.
Alan Leeson, Town Clerk and Financial Officer explains “by eliminating caravan sales from the Council’s activities we shall now be able to forecast future income with greater certainty. In order to keep the council tax precept to a minimum, the Council will now be considering its investment strategy in order to ensure that alternative sources of income are maximised”.
Both parties are now moving towards completion and handover on 15th October 2009.
(Swanage Town Council, Press Release, 4 September 2009)
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Well done Swanageview, I've just been checking local news sources and none of them have this. Always good to have an 'insider'!
£7.25m - nice.
What shall we spend it on?
Wouldn't it be nice if STC put some of it into some sort of Charity pot, then local charities could apply for it and use it to 'match' other funding.
Cuz after all, it really is 'our' money.
I would like to see a/investment in some sort of 'community centre', perhaps providing flexible, versatile,sheltered entertainment and social and business facilities, b/ investment in something to give a regular income, and c/ ensure that critical maintenance is carried out to avoid serious long-term damage and expense
http://www.darwinpim.com
The Wheels of Commerce
The Times - Friday October 31
Caravan parks are hardly the embodiment of five-star holiday luxury. The appeal of the sites has always been the immediacy of outstanding natural beauty in surroundings that are more comfortable than a tent but less costly than a B&B.
The Darwin Leisure Property fund, launched in November 2007, wants to change all of that by turning caravanning in the British countryside into a chic but still relatively cheap alternative to buy-to-let holiday homes. The managers want to transform the Carry on Camping image of caravan parks to attract more of a Kate-Mossat- Glastonbury type of crowd.
"Caravan parks occupy some of the most beautiful sites in the country. If you put a house in some of these locations they would fetch millions," says one investor in the fund.
The logic behind the idea is sound. The caravan industry is growing at 4 per cent a year, according to Mintel. The planning regime for greenfield sites is highly restrictive, meaning high barriers to entry for competitors and constrained supply. Meanwhile, demand is set to rise. The recession is expected to boost the caravan industry as people swap foreign holidays for UK "staycations". Darwin says that the "low cost and flexibility" of a caravan holiday makes it more attractive in times of economic uncertainty.
About 85 per cent of caravan sites are owned by husband-and-wife teams who lack the capital to invest in their business, according to Darwin. Park owners make their money from stable long-term cashflow: annual pitch fees from owners and tariff income from caravans for hire, as well as retail sales.
The fund will use investors' money to upgrade "unsightly" caravans with attractive lodges and make the running of the sites more efficient, resulting in higher-quality parks and improved profitability and investment returns. Parks that benefit from investor' cash will be eco-friendly and carefully landscaped.
Rebecca O'Connor - The Times
and there's more at http://www.darwinpim.com/news.html
eg:
Happy holidays for canny campers
David Stevenson looks into the UK holiday market and reports on his investigations into the Darwin Leisure Property Fund.
That sounds moderately positive, but rather too vague. Blinkin' press releases!
Mind you, if it gets la MOSS to visit, then I'm available!
By the way, "....The Darwin Group, a strategic consulting boutique...".
Anyone got any ideas what that means?
Dear Mr The Postman
"... investment in some sort of 'community centre', perhaps providing flexible, versatile,sheltered entertainment and social and business facilities ..."
Yep, that's the Library, so long as the Library itself is protected. Go and have a peek around the back, there's a lot of 'under-utilised' land, plus the bluddy silly 'waisted' design is inefficient 'an all'.
Redevelop.
$7.25m HAS GOT TO LAST US 105 YEARS. Any building will not last that long, Where is the money comeing from to replace any? Our grand children will have to find the money cause the town council wont be able to sting the caravan owners any more. How much is £30k going to be worth in 20 years let alone 100? How much will be left in shall we say 5 years?
At least there will be enough in the pot for early retirements at the council.
From fees the site paid a min of £500k into the council each year. ( £3k fees x 300 pitches = £900k.)
£7.25M is only 14.5 years fees. (Without fees increase)
If it is all invested at present rates that’s £72.5k int per annum if they get 5% that’s only £362.5K. Am I missing something?
The Council has got a list as long as your arm of repairs etc; some one wanted a Community centre. There goes a big chunk. How much left? Not enough to meet the current profit from the site from the whole £7.25M.
The Council are saying they will be able to invest in the future for Swanage and keep the rates down. What with?
Are Councillors going to buy lottery tickets and keep their fingers crossed?
Lets hope the folk living on the site get kicked off now.
No one lives on the site. It is shut for 6 weeks of the year. Any owner can stay for 46 weeks thats what the licence the Council issued says
Well I obviously don't live my my house either then.
Everyone know people are living there.
I wonder what will happen to the clubs who currently rent rooms in the complex
It was the councils fault allowing 46 weeks a year occupation in the first place. If people live there how come people who need some where to live haven't bought in? I bet the 7 million wont be used to build social houseing, but on improveing the town so more 2nd home owners move in and push prices up. This company is interested in Marinas, I wonder if they will buy the boat park aswell?
Does anyone think the council have sold us short on this?
When you talk about the lost income, you can't just multipy fees by number of pitches. You need to look at the net profit after all expenses: the cost of running the swimming pool for starters, the cost of all the staff, the time spent by council people running the place. Would be interesting to see what the profit was when everything is taken into account.
£500k is profit. fees = £900k that leaves £400k to run the park. If the council cann't run it on that God help the £7.25M
The council people that work on the site would not have a job if the site wasn,t there ( and may not have a job now)
£500k was in the last years accounts.
Whatever the whys and wherefores, the main point was the District Auditor had ruled that the Council was not allowed to sell caravans, which rather kiboshed any such business venture..
It is a well established principle that councils are not allowed to indulge in speculative activities with the tax payers money. In addition those will long memories may recall that some decades ago a composite bill went before parliament which included a measure to allow councils to run shops. The idea was that where you had estates with no shopping facilities they could step in and run one so the inhabitants could get their groceries without having to travel long distances to one of the supermarkets. When their lordships looked at it Lord Fraser took exception on the grounds that this would permit unfair competition with the private sector and it was thrown out. Thats Fraser of House of Fraser in case you wondered, so he should have known a thing or two about shop keeping. The bill failed at this point. Now in Swanage, where the world is upside down, we have a true blue tory council which has fought through the courts for the right to compete with private caravan sellers and unsurprisingly has lost. Perhaps they need another change of legal advisers.
Can you please tell me when and were this court case took place for the right to trade in the buying and selling caravans? What is known is the council has continued to trade in caravans when having been told by the District Auditor to desist. Ring the site and ask what they have for sale or look on the web site for a list of available caravans.
According to the 2007/8 acconts, available on the councils web site, the council's right to sell caravans was challenged by the auditor.
The accounts say: "The Council decided to seek counsel’s opinion in May 2007 to provide greater clarity over the
legal status of these arrangements, including the sale and provision of caravans and other ancillary
activities.
On the basis of this advice, the Council believes that it has the required powers to operate the
caravan park. Agreement on this matter has however not been reached with the Council’s external
auditor."
The auditor did not agree and mounted a legal challenge. (See Minutes of the Special Meeting of the Swanage Town Council held to discuss POLICY matters at the Town Hall, Swanage on FRIDAY, 26th JUNE 2009)
At some point thereafter the council decided to throw in the towel and get out of the caravan business. I was under the impression that the phrase "legal challenge" meant it had gone to court. However, there is a reference to a meeting of the parties in chambers in the Minutes of the EXTRAORDINARY MEETING of the Swanage Town Council held at the Town Hall, Swanage on FRIDAY, 30th MAY 2008 at 9.30 a.m.
Its possible the judge at this meeting told them their fortune and the case did not proceed to a full hearing in which case I stand corrected. Whichever, the council decided to sell the site because of the legal challenge from the auditor.
Incidentally The Town Council was assessed as ‘high risk’ by the Audit Commission, in accordance with national guidelines introduced during 2006/07. This required additional resources and input for
local authorities that are deemed to be higher in risk. This assessment reflects the unusually wide range of financial activities and follows experiences emanating from legal challenges, including
the Audit Commission itself. (http://www.swanage.gov.uk/Unaudited-%20Statement-of-Accounts-2007-08.pdf)
Councils all over the country own business. They are held at “ arms length”. Which means a “board” of usually about 7 people over sees it. 3 councillors, 3 involved in the enterprise and one, I’m not sure of the title but not involved in the area or business, who if needed can cast a deciding vote. They have to be agreed and authorised by a government dept. This “ business” would have been just for the sale of caravans the council would have carried on running the site and getting the fee’s profit direct.
Swanage Council could have done this. The profits would have gone to the Town, but the “board “ would have said what it would go on. Like, a youth club, renovating some council buildings etc. The council didn’t like that idea they would have given up control. So they’ve sold the town down the river. At one time they had debts of I think £700k, which the Auditor said, were illegal. What chance is there that the £7.25mil will be used properly? Oh don’t forget the £30k per year for 105 years. Might buy a Mars bar in 50 years!!
Its a pity that the council, its officers and advisers were not aware of this. Strange that when they consulted the local government association on the legal position it was not suggested, strange that neither their solicitors or the counsel who advised them picked up this point. I read that Bournemouth was transferring some of its assets to a trust but had accepted the flip side of the arrangement, namely that they would loose control.
I must be the only one who thinks it odd that a tory council has maintained a staunch supporter of public ownership all these years. How very enlightened of them. Its good to see that there are others who think the caravan park should have remained municipalised. What else would they like to see controlled by the council?
It's not a case of the council taking public control. They already have control of the site and the town has benefitted from the profit for years. Where is the lost money going to come from? The precept went up 37.5% app this year. how much is it going up because of the loss of the site?
I am all in favour of the council carrying on businesses to defray taxes, although I cannot help thinking that a number of people who post on here would express doubts about their competence. In fact they have been very entrepreneural over the years, identifying businesses opportunities, like caravan sales. The amount of money it has put into the town over the years, and the value of the lease demonstrate this. Lets hope they invest the latter with their customary acumen.
I notice that the attempt to contract the restaurant and bar was a failure. Pity they did not keep it in house.
The reason for the large increase in the town council's precept was that they had to start paying vat on car parking income. You have all been enjoying a bit of a tax holiday for years because they were not.
The reason was because the caravan owners got a refund as the council had been overcharging them for years.
In which case we have still been paying less than we should have been if they had not overcharged. The official position is that there were a number of reasons but chiefly a fall in parking revenue last year because of poor summer weather.
The cost of parking? Bournemouth and Poole dropped theirs to ensure people still visited the town. Swanage- they increase cost. They have known they have to pay VAT for ages, did they put money aside? No. The town is nearly bankrupt and they have got rid of the main revenue maker. All profit from the site will go to London to pay investors not into Swanage.
Perhaps Swanage people would rather charge visitors more and pay less council tax. Judging by the number of cars about it does not seem to deter many people from coming here. Do I detect a note of wanting to have our cake and eat it?
Having gone over the reasonably impressive financials of Darwin Properties, I think I might flog off my caravan and invest the proceeds in that company. I will win; other investors will win; London wins; but as for Swanage?????...a short term boost to the town's ailing financials. I'll be back in five years to buy a flat......
Seriously, Darwin's approach to holiday parks is unique and may well be the wave of the future, in which case more tourism will come to Swanage. No bad thing, particularly those who come and STAY OVERNIGHT.
Perhaps STC should invest some of the proceeds into Darwin?? That would be an interesting twist to the story.
Perhaps you would like to give the links for Darwin so we can all look at the financial statement. They have been a company for 21 Months. Not exactly a history to base investment on. They are unregulated and an extremely high risk. Should you invest through an advisor you would have to sign a statement confirming you knew the high risk. You must be a councillor ( or work for the council) to have seen their accounts and it therefore follows you would invest. I wonder what the District Auditor would think of that.
I did post the link to Darwin before:
http://www.darwinpim.com/
As a Limited company, I would imagine they have to publish accounts like anyone else, that anyone can look at..
The small print on their website says Darwin Property Investment Management Ltd Company, Reg No. 06189407. Registered Office: 35 Vine Street, London EC3N 2AA. Regulated & Authorised by The Financial Services Authority"
As they had only been in existance or 4 months and they made a loss of £39k their accounts till march 2008 don't give alot. (available from companies house)
And?
If the accounts are only available for 4 months how "Having gone over the reasonably impressive financials of Darwin Properties, did we get that observation *
They are regulated. Any investment has a risk - even your home. It is not a place for the uninitiated (e.g. those who rely upon 'financial advisors').
Any new business runs at a loss during the start up. This one is buying up properties that have a long-term proven track record of producing profits. To get in on the ground floor (now) may produce rewards later. But nothing is guaranteed.
What I will say - is that STC has become utterly useless in running the Holiday Park as a business. I have high hopes that Darwin will rectify this very quickly. Their first challenge will be to re-establish good relations with the Owners which the Council has utterly destroyed - the DA is right: STC has no business running this business.
Caravan owners must also change their attitude toward the management. A healthy and positive attitude will help. Nothing can be gained if old attitudes and suspicions are transferred to the new managers'/owners' relationship.
I suggest that the Bay View Owners' Association elect a new leadership team as soon as the new management company is in place. Its officers have worked hard in dealing with STC; they deserve a break and new blood will be needed for the future. The game will change; new players with more experience are needed.
It is my view that we will see a tremendous improvement to the whole park. I think Darwin might
be the best thing for the owners. But I fear Swanage will suffer the affects when the 7.25 million evaporates and no more income (beyond 30k annually) supports the precept. The owners who stick it out will be the winners, as will Darwin - definitely NOT Swanage in 5 or 10 years.
Will I pay more for site fees if the park becomes 5 star? You bet.
If I don't like this, it will increase the value of my investment, and I can choose to leave. At the moment my investment is unsaleable.
One final word, to the people of Swanage - your attitude towards the 'muni' owners has been desultory at best. I know, as a former home owner in Swanage for 15 years, that this feeling exists in the town. Well, now the 'muni' owners are disassociated from Swanage. They can shop, eat and drink where they want. Swanage TC has cut the umbilical chord. The TC will no longer affect the enjoyment of the owners, nor will the Town Clerk, nor the Tourist Committee. We are liberated!
Just to let you know......
I agree - the Bay View Owners's Association leaders must stand down.
We need new blood!!
Hear hear
Hmmm....when the 7.25 million run out, the shops, restaurants and pubs of Swanage are going to have to generate income for the town from the park residents. Maybe they will make an effort to attract their custom - for a change??
I don't understand that. Please explain. Whoever owns the caravan site makes no difference to the local businesses catering to its users and to the users of the various private sites.
The owners have their own site but you can only post on there if you are a member and there are no posts asking for “New Blood”
If you were a member you would know that a new committee was only elected by the membership on 31st august 2009. and we had 20 new members of the committee. How much “New Blood” do you want?
Most owners are happy that the site will be run by someone else as the attitude and service has plummeted. The Council want to rip us off and are greedy. They use us to cover up their financial mistakes.
The owners have a love for Swanage in the main and are upset that they see the Town loosing out BIG time.
The Council were told about an arms length company. A couple of our members are “authorised “ and sit on boards of other authorities. So they had all the expertise and help.
They haven’t even had the decency to inform caravan owners about the sale!!!!
OK - fair 'nuff - what Swanage needs to recognize is that the sort of tourist they benefit the most from are those who stay overnight - or over many nights. They will buy groceries, shop, eat and drink, and get involved with the town's arts and organisations.
The point is: treat these as your best non-resident customers, just as you would treat those with second homes in Swanage. I know several owners at SBV who have come down less frequently this season, due to the negative atmosphere surrounding SBV. Council has been less than welcoming or reassuring to the owners at SBV; they will need to feel welcome in the town again - no doubt they will once STC is out of the picture.
Does anyone know who STC's investment advisors are? As we know they have very little choice but to act on professional advice so they are covered if investments go the wrong way. I am given to understand that there are some banks in Iceland which pay nicely.
A new owner for the site will get the Vista up and running. Reasonable meals for families, may be takeaway. Who will want to go out to the town? Swimming pool for the kids, Bars for mum & dad
The site will never be 5* we would need piped gas for that and because of the nature of the site and the ground flexibility it would not be safe for site or town.
I agree - it will be great for the town if the Vista is done up and offers what we need.
Do we know for sure whether the new owners will have to keep it open for the town (at reasonable rates) and also what about the shooting club, bowls club and opera society? I know they have leases - am I right to assume that they will respect these?
Re: investment advisors.
Why not ask the town hall?
I would think that the town's investments would be restricted to safe/low risk investments by the District Auditor. After all, it was he who condemned the sale of caravans as being too risky with public money.
Having said that, PDC got into a mess with its Icelandic bank shares, so anything might be possible.
Re: Piped gas
My understanding is that gas could be piped to units by installing a number of above-ground gas tanks (the ones that look like a bit like a fat submarine) around the park that would be connected to a cluster of adjacent caravans. This would prevent the need for underground gas piping. Would this be cheaper? I don't know, but at least there wouldn't be a need for checking and changing gas cylinders when they run out.
I learned this from a previous site manager, so I can't guarantee it is accurate, but anyway.........
I don't think I would like that sort of gas supply. The pipes would still have to go underground and the land does flex. We still get water leaks from the new pipes laid a couple of years ago.
Bournemouth Council are putting their assets in a charitable Trust to protect them. This saves on business rates and VAT. Swanage Council sell their assets off. Why because it has run out of money. What has happened to our Money?
I was told today that the new owners are planning to stop locals using the pool!
Can anyone confirm this?
Highly unlikely, from all I understand..
In all honesty what would it cost for the new owners to hold a public meeting to explain there aims, and allow people to put forward there questions as to whats happening. But as per usual we are all left in the dark trying to find the light switch, which sadly doesn't exsist.
To be fair.....
They won't 'own' the park until 15 October.
Owners of caravans (stakeholders)
have been told NOTHING.
Employees of the Park have claimed that they know NOTHING.
Wait until Oct. 15th. Ignore rumours.
The new owners are a business. Expect all aspects of the Park (including swimming) to be run 'for profit'.
That will be one of the 'benefits' you get from the council's decision to sell the lease for 105 years.
BTW the pool at Wareham (and fitness suite) is/are far better. And is more likely to offer 'free' swimming for OAPs than Swanage.
The quote about the pool came from a council member
If true, that Council Member has breached the embargo on all official communications about the sale of the Park, imposed by the Town Council and Clerk.
But he may be right.
At a recent Town Hall meeting the Mayor refused to answer the question, asked by a member of the public, whether or not the pool and other facilities of the Vista would remain open to the public. At previous meetings, prior to the tendering, assurances about the pool access were given in Council Meetings.
I rather doubt that any for-profit company that stumps up 7.25 million will run their investment to benefit the town, unless it produces a profit for their investors. A charity it isn't.
(The residents of Swanage must understand that the Council has exchanged all interests and benefits - for the next 105 years - for a large sum of money. The town could have formed a community trust to run the park as a charity, thus bypassing the auditor's objections and continuing to receive an increased annual income, due to lower taxation as it would have been a charitable organisation. Bournemouth is doing this with some of its major assets.)
As it is, the Vista bleeds money and has been subsidised (to the tune of over six figures per annum) by the caravan site fees. To make it profitable, they will have to upgrade it, such as by adding healthclub facilities, and then charge more to all caravan owners and users, such as done by Haven, Rockley, and so on. Or simply reduce its use and savagely cut costs.
I wonder whether they will have to honour the leases issued to the Operatic Club, Bowls Club and Shooting/Archery Club? We will soon find out.
I reckon we need more flowers and flower beds in Swanage.;) seems about the most important things in Swanage. Definatly not anything else by what the council do!
I disagree - they built a lovely new cark park with electronic gates for the Town Council's use. It is very nice indeed.
I can't wait to see the new chauffeured limousine for the Mayor sweeping through those electronic gates. Luvverly.
Is there any truth to the rumour that Darwin will convert at least a portion of the park to hire fleet - the part lowest down, nearest the Vista. Have heard a rumour that they will buy out or move caravans in that area (somebody told me that they have permission to build more pitches further up the hill.
From ThisIsMoney.co.uk:
'The fund, Darwin Leisure Property, is unregulated, so you can't hold it in an Isa — but you can hold it in your pension using a Sipp (Self Invested Personal Pension).
It also means if it all goes wrong you won't get your money back. It was launched at the start of this year - it is up about 1% compared with a 13% fall in the FTSE 100 since January 1.
Its managers buy family-owned caravan sites — residential and holiday sites — and run them. Currently, it owns four sites in the South-West but it's planning to extend eastwards.
Ben Yearsley, of advisers Hargreaves Lansdown, has 5% of his Sipp in the fund. 'I like it because I think more Britons will holiday at home due to rising oil prices and travel problems. The fund will benefit from this. However, I am young and far from risk averse — this is a high-risk investment.'
The same fund managers are considering investing in marinas. Because it's not a regulated fund, if you buy it through an adviser you would have to sign a risk-warning notice, proving you understand how risky it is.'
Two comments:
-if this business goes belly up, what happens to the park? Will the council revert to owning it?
-could this group have their eyes on resuscitating the old plan to build a marina by the sailing club?
"-if this business goes belly up, what happens to the park? Will the council revert to owning it"?
Sorry, probably just being pedantic, but don't they still 'own' it? They've only leased the running of it - haven't they?
"-could this group have their eyes on resuscitating the old plan to build a marina by the sailing club"?
Ooh, remember last time, town split into internecine warfare, pledges made and broken, rivers of ..... OK, I may be exaggerating, but discussed in the House of Lords, a local referendum.
Could be fun! Or not.
The council will continue to own the land, but not the business (I assume the 30k a year is 'ground rent'?). If Darwin goes into receivership, then there will be an almighty legal situation to unravel. Meanwhile, who will run the park? I suppose a firm that deals with companies going into receivership would take over the responsibility for running it, and disposing the assets. But it will be a lengthy legal mess to unravel.
Does anyone know whether the town will receive the 7.25 million up front as cash, or in instalments, or in part as shares in the fund? Just wondering. Seems to be a lot of money to come up with all at once.
I wonder what guarantees the council has had to give (two would be the potential environmental toxicity of the capped landfill at the top of the park, plus any liabilities incurred before the effective date of the lease).
As I did with another thread, I suggest we close this thread and post updates on the new Transition thread elsewhere in this blog.
There is little more to say on this topic. Darwin will have to woo the owners, who have been badly and unfairly treated by the Council and Town Clerk in recent months. The Town Council will be under close scrutiny over how it uses its 7.25 million pounds. Let's hope - perhaps hope against hope - that in six, or twelve months, everybody is happier and better off from this. Cynicism makes for an unhappy life for all.
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