Has the deal the Town struck to dispose of Bay View Holiday Park got a nasty sting in the tail?
I have learned that there are several conditions in the contract that might severely reduce the amount the council eventually receives. One condition is that up to 600,000 pounds each year will have to be returned to Darwin if it is prevented from raising the site fees by the Owners' powerful Association. That condition is for three years, so in theory as much as 1,800,000 pounds could be reclaimed by Darwin. And up to 50,000 pounds can be recovered by Darwin for legal costs it incurs in pursuing this.
Swanage's 7,250,000 sale price could be less if these rebates occur, as low as 5,400,000. And we don't know the sums that Swanage incurred in disposing the site, including legal and survey fees.
Questions should be asked.
Tuesday, March 16, 2010
23 comments:
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Anonymous said...
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I've heard this too but 600k sounds too high. But I'd believe 60k a year.
Heard that the Owners Association meets with Darwin (plus lawyers) on Friday about the site fees. Word is insufficient objections were raised. -
16/3/10 6:27 pm
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Anonymous said...
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The first year is £600k (this year). The total is £1.8 million over 5 years.
There is also £50k in the first year in legal fees to fight the BVO. These are indemnity's.Darwin did not have them put in not to use them. So STC got £5.4 mil for the park with £30k a year. Peanuts on what they were getting. Who will have to pay the short fall? -
16/3/10 11:08 pm
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Anonymous said...
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84% voted against the fees. BVO have more than enough objections. You don't expect Darwin or the staff to admit to this?
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16/3/10 11:11 pm
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Anonymous said...
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The SBV staff claim the wording of the BVO's objections to the site fees was not 'correct', or some such twaddle. That's an easy issue for a judge or lawyer to unravel.
It would appear that Darwin is playing a cat and mouse game to appear to be fighting the owners, but will in fact accept a reduction in site fees, knowing that they will be recompensed by STC. So Swanage will indirectly let the caravan owners off any increase by recompensing Darwin. That sounds like a win-win for the BVO and Darwin, and a distinct loss for poor old Swanage.
Hey, people of Swanage, let's do a little tally here to see how well we have been treated -
In late 2009/early 2010, Swanage has:
-lost the annual income from SBV for ever, thanks to STC
-lost up to two million from the sale price of SBV, thanks to STC
-lost the chance for a secondary school in Swanage, thanks to DCC
-lost the link to the main rail line, thanks to PDC
-lost three tier education, thanks to DCC
-lost a care home, thanks to DCC.
I am sure DCC, PDC and STC have done something that's good for Swanage. Oh, yeah, new bollards and a bit of new pavement. It's just that they have inflicted so many bad things on Swanage, which these councils must view as some distant, unimportant cul-de-sac on the road to no-where, surrounded by the sea and sheep, inhabited by a population of aging Tories guaranteed to vote them back into power, no matter what #$%^ they have shoveled onto them........
I'm off to the pub to drown my sorrows...... -
17/3/10 12:25 pm
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Anonymous said...
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yes Station Yard all over again
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17/3/10 2:14 pm
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Anonymous said...
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It would be interesting to know what advice STC received from their agent and anyone else whose opinion they relied on in this matter. It would be unusual to say the least if they had not acted on professional advice. Clearly if they acted in a manner contrary to such advice there is a possibility of maladministration. Does anyone imagine there was a queue of solvent applicants interested in buying this property? I think that would be fanciful.
If anyone thinks there were other possible courses of action which were not explored in sufficient depth and that as a consequence of such a failure STC failed in their fiducary duty perhaps they can take the matter up with the local government omsbudsman and the question can then be properly examined. -
20/3/10 1:33 pm
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The Prisoner said...
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lets build something that will generate money.
how about that harbour idea?
lets at least move forward with the money in a positive direction.
lost the annual income from SBV for ever, thanks to STC ( it was peanuts!!!)
-lost up to two million from the sale price of SBV, thanks to STC. ( crying over spilt milk...)
-lost the chance for a secondary school in Swanage, thanks to DCC. ( jez... kids don't want to stay in swanage forever- let them spread their wings... we don't need a secondary school!!)
-lost the link to the main rail line, thanks to PDC. ( is that dead and buried??)
-lost three tier education, thanks to DCC. ( get used to it.. the majority of the country operates likes this- its not the end of the world)
-lost a care home, thanks to DCC.
( council care homes are closing down all over the country- its not a DCC thing- it uk wide- the aged population will have to move to purposed built centres outside of swanage- its not like families visit everyday!!!)
can we just spend the money on a positive move for the future-
maybe a surf reef............lol.
spend the money on something tangible-
reopen the debate on the harbour (1-3 day moorings only)
build a harbour wall- great snorkelling- better public and fishing facilities, shops etc.. etc.. -
20/3/10 3:33 pm
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Anonymous said...
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....and just how much money will a bunch of dinghy sailors and divers (who already have facilities here) bring into Swanage???
SBV brought over 600k to the town coffers a few years ago. Hardly chicken feed. Perhaps in your eyes, yes??? -
20/3/10 9:11 pm
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Anonymous said...
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A couple of years ago SBV made £1.5mil which went into STC coffers. The STC thought they could do better, got rid of the manager and ran it themselves. Tried to get greedy and it went down hill.
The distrct Auditor has said they can not use the money. It has to be ivested and the interest used to replace the money SBV used to bring in. -
20/3/10 10:37 pm
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Anonymous said...
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It will never replace the income from SBV unless capital is sold off.
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22/3/10 1:51 pm
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Swananon said...
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There were 12 offers made for the caravan park, however only 4 were taken to the second stage of submissions. Darwin , Park Holidays, D Hollis Ltd and Park Resorts.
Darwin premium of £ 7,250.000 + £ 30,000 per year lease for 105 years
Park Resorts. Premium of £ 6,7500,00 lease for 105 years or £ 390,000 per year.
Park Holidays. Premium of £ 6,000,000 + subject to more information'
D Hollis Ltd £ 300,000 rent to be increased annually by inflation.
I am reliably informed that the proceeds have been invested at 3% giving an income of £ 217.500+£30,000 rent = £247.000.
£ 53,000 less than would be received from D.Hollis Ltd.
However my own opinion is that the best offer was from Shorefields Holidays Ltd, which was not even considered in the second round.
Shorefields Ltd 12% of annual turnover for the term of the lease they suggest a rental on account of £260,000 for the first year.
The last paragraph of their offer states "Our clients are prepared to consider other forms of agreement or terms and will be pleased to discuss these with your clients if the opportunity arises".
One has to ask the question
1 Why were Shorfields not included in the second round?
2 Why was the £ 7.250,00 more important than the rental? If one takes the governments average figure of 3.5% inflation per annum The rents in 25 years would be D Hollis Ltd £ 560,000 per year. Shorefields £ 486,000 without any increase due to better management. If one takes it further into the future 50 years could see £ 1,047,500 and £ 908,000.and 75 years £ 1, 958,000 and £ 1,797,00
3 It is rumoured that the Council wants to sell the Allotments and the Town Hall. Is there an agenda to use this money on some Grand Scheme such as the Grand Seafront enhancement favoured by Councillor Suttle
Taking the sale figure into the future using the 3.5% inflation figure the £ 7,250,000 (assuming it had not been spent) would be worth about £ 3,000,000 in 25years 1,279,000 in 50 years and £538,00 in 75 years -
28/3/10 7:25 am
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Anonymous said...
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Extract from the Business Sale Agreement for the sale of SBV
25 indemnities and dealings with the Owners' Association
25.1 The parties hereby acknowledge that all costs and expenses (including but not limited to reasonable management costs) incurred in connection with any outstanding or future disputes with the Owners' Association (limited to matters already Disclosed or which ought to have been disclosed) shall be borne by the Seller and the Seller shall indemnify the Buyer against all costs, claims, Losses, liabilities, demands, damages and expenses incurred or suffered by the Buyer in relation to any outstanding or future disputes with the Owners' Association with a maximum liability of the Seller under this clause limited to Fifty Thousand Pounds (£50,000.00) for a period of twelve (12) months from the date of completion
25.2 The Seller shall indemnify the Buyer against all costs, claims, losses, liabilities, demands, damages and expenses incurred or suffered by the Buyer in the event that the Buyer is unable to increase the pitch fees pursuant to the terms of the Caravan Licences as a direct or indirect result of any action or omission of the Seller (whether past present or future) including but not limited to custom and practice, variations to the form of Caravan Licences agreed by the Seller (whether such variations have been made in writing or verbally) or as result of any of the Seller's dealings with the Owners' Association or any individual caravan owner(s).
25.3 The Seller shall at its own cost do all things reasonably requested by the Buyer to assist the Buyer in running the Business for a period of six (6) months following Completion subject to any involvement of the Seller remaining confidential.
25.4 The Buyer hereby undertakes to use reasonable endeavours to increase the pitch fees in accordance with industry standards, practices and guidance
25.5 The indemnities contained in this clause are subject to the following:
25.5.1 The Buyer shall as soon as practicable give written notice to the Seller of any such costs, claims, losses, liabilities, demands, damages and expenses being threatened brought made or lodged against or suffered by the Buyer in respect of such matters.
25.5.2 Notwithstanding the existence of the indemnities in this clause the Seller shall still be obliged to mitigate any costs, claims, losses, liabilities, demands, damages and expenses
Page 19
25.5.3 The maximum liability of the Seller under this clause shall be limited to: (a) for the period from Completion to/14th October 2010 the sum of £600,000;
(b) for the Ń€eriod from 15th October 2010 to 14th October 2011 the sum of £450,000;
(c) for the period from 15th October 2011 10 14th October 2012 the sum of £350,000;
(d) for the period from15th October 2012 to 14th October 2013 the sum of £250,000; and
(e) for the period from15th October 2013 to14th October 2014 the sum of £150,000
in relation to any claim or series of claims from one event or series of connected events .
You can see the actual amounts involved. This makes the amount the site was sold for look even less good value -
3/4/10 2:59 pm
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Anonymous said...
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That's an interesting couple of posts.
I'm neither a caravan owner nor an economist, but huge wedge in the bank earning interest, doesn't seem too bad an option.
I know that STC can't use that wedge for much, but what are they allowed to do with the interest? -
7/4/10 5:11 pm
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Swananon said...
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Anonymous said...
"I'm neither a caravan owner nor an economist, but huge wedge in the bank earning interest, doesn't seem too bad an option"
But look at the other side of the coin.....
When did you last see a person or business owner with a sudden windfall in their bank account actually invest it wisely. Most just fritter it away, usually on projects which boost their self esteem amongst their peers.
Self grandiosement is almost certainly what this sale is about, and sadly time will undoubtedly prove me right.
Otherwise, why take a relatively low cash offer (although £7m, or is it now £5.4m, does seem a huge sum of money to many of us here in Swanage) when there were better long term offers out there which would have given far better long term income to STC. The income from the rental offer by Shorefields (which was ignored for some inexplicable reason which has yet to be explained) far exceeds the interest payments, even if you stuck the capital in some dodgy overseas bank.
The offer from Shorefields was initially £260,000pa which would have increased over the years, nearly £300,000pa in five years time (allowing for the modest 3.5% figure used for long term increases by HM government for inflation), and would have been 366,000pa in ten years time. By the time you get to a mere 15 years time, we are looking at a combined total rental income of £5.44 million which would exceed the sale price if Darwin got the site for a mere £5.4 million as quoted by anonymous at the start of this thread.
Words fail me as to why the Shorefields offer was ignored, and I look forward to someone enlightening me on this anomaly. -
7/4/10 6:30 pm
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Anonymous said...
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I have heard the Council discuss using the proceeds from the sale of town assets - Bay View, the TIC, and some other, to refurbish many facilities that have been poorly looked after and are now in bad shape. This conversation happened about a year ago, before the park was sold. Top of the list is, of course, the crumbling, unsuitable town hall.
No doubt some of this money will be used to pay for these necessary repairs; if the DA disallows this, then the interest can be used to pay the interest on a bank or other loan raised for this work. -
10/4/10 9:35 pm
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Anonymous said...
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Correction - It is 'Swanage Bayview Holiday Park', not Bayview Caravan Park'. And it is not the 'muni'.
The Holiday Park aspires to the Kate Moss lifestyle, so the term caravans is not longer used. Darwin has told us this, so it must be true. -
13/4/10 4:30 pm
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Anonymous said...
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What is aspirational about the Kate Moss lifestyle ?
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13/4/10 10:16 pm
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Anonymous said...
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Don't ask me. Ask Darwin! They said it.
I think the present use of the park (primarily as a weekend get aways for owners) works well for us and for Swanage, with a few letting units available for lettings to help Swanage's tourism industry. Owners develop a real bond with the town and are happy to spend locally, and certainly not outside school holiday times. A Haven-type holiday park (even an upmarket version) wouldn't attach itself to Swanage as much, I believe. Some owners even get quite involved with local events, clubs, churches, charities and so on. It's all good.
If you come up to visit us, you will find a lot of happy owners enjoying Swanage, few of whom would care to aspire to a Kate Moss lifestyle, and who certainly do not emulate her model figure (I include myself at the top of the list of well-padded owners...!).
(Note to Darwin - we corpulent owners definitely need our gym back!!!!! Well, I certainly do!!) -
14/4/10 10:17 pm
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Anonymous said...
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Going back a way to the posting at 1.33pm which stated
"If anyone thinks there were other possible courses of action which were not explored in sufficient depth and that as a consequence of such a failure STC failed in their fiducary duty perhaps they can take the matter up with the local government omsbudsman and the question can then be properly examined."
In reply, unfortunately the Ombudsman does not deal with complaints regarding parish and town councils.
http://www.lgo.org.uk/complaints-about-parish-councils/ -
15/5/10 10:59 pm
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Anonymous said...
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On 13 October 2009 Darwin West Country (Guernsey) Limited signed and completed the purchase of Swanage Bay View Holiday Park at a cost of £8,219,940. During the year a deposit of £725,000 had been paid.
Page 31,
http://www.cisx.com/download_news.php?newsID=47294&format=pdf -
13/8/10 11:41 am
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Anonymous said...
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STC Draft Statement of Accounts year ended 31st. March 2010, Page 27. Costs of Caravan Park sale £137,774.
http://www.swanage.gov.uk/pdf/general/DraftAnnualStatementOfAccounts-Signed.pdf -
2/9/10 12:27 am
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Park Holidays Caravan Park said...
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Not sure some of this info is correct
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28/11/10 11:43 am
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Anonymous said...
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How unsure are you about what info?
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28/11/10 2:04 pm
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