The compensation value of the land at the heart of the Manston airport site development consent order process has created a “wide divergence of opinion,” an examination hearing was told today (June 4).
The Planning Inspectorate examining panel, led by Kelvin McDonald, is examining the bid being made by firm RiverOak Strategic Partners (RSP) to acquire the site and create a cargo hub and associated aviation business.
However, the land is owned by Stone Hill Park which has submitted a planning application to create up to 3,700 homes, business and leisure and associated infrastructure.
RSP says compensation payable for the compulsory take over of the Manston airport site would be “no more than £7.5 million.”
However Stone Hill Park told examiners their valuation was nearer to a level of £20 million and, with relevant consent in place for development a benchmark figure of £38 million had been identified.
SHP own 742 acres of the site which totals around 770 acres with plots belonging to other interested parties.
Under provision?
The examining panel asked if the emerging Thanet Local Plan may have an impact on the valuation, whether the £2.4million paid for the 4.5 acre Jentex site gave a truer indication of the land value and whether £7.5 million was an under provision in compensation payment.
Michael Humphries, QC for RSP, told the examination that the figure still stood and was reached on the basis of ‘no scheme’ values.
He said: “(You would) assume our project is not coming forward and look at what someone would then pay for the land on the open market.
“You would look at the existing use value, in this case that is expected to be low, take account of the planning permissions, but there is no such planning permission in this case, take account of assumed planning permission (and arrive at) hope value.”
Mr Humphries outlined how the hope value would then discount money due to risk because no planning permission is in place and then discount for deferment of time before receiving such permissions.
He confirmed the Jentex payment did not form part of the compensation pot and claimed that a total of £13.1million had been set aside for costs, including noise mitigation. He added that the £7.5million was for the entire site and not just the holdings belonging to SHP.
Colin Smith, for RSP land valuers CBRE, said the baseline for the valuation was the sale by Infratil to Ann Gloag for £1 – and associated debt of around £350,000 – and the condition of the site when it was then bought by SHP.
He said: “My starting position was to examine what has changed since then for potential development value. Ms Gloag bought it with the stated aim to run it as an operational airport. That quickly changed, the airport closed and assets were stripped out and sold.”
He added that uncertainties over planning permission, and whether in the event a development did get the green light whether the owners could agree compulsory acquisition in order to take control of site drainage, contributed to the £7.5million figure.
‘Significant dispute’
However John Rhodes, for SHP, said valuation carried out by Avison Young had priced the site in the order of £20 million using three methodologies
He said No scheme values still had to recognise the existing use as an airport.
He said: “If we were to set aside this specific scheme there’s nevertheless existing use.”
The second basis was ‘hybrid’ recognising the site has a substantial area of brownfield with hard-standing and buildings which a buyer could put to different uses, adding there is “significant potential for range of different uses.”
The third basis was alternative development. He said: “In the absence of this scheme (RSP’s), which has sterilised our application and made it impossible for the district council to determine because the DCO prevents its examination, planning officers consistently recommended allocation of this land for residential, mixed use development, in the local plan.”
He said a financial valuation undertaken “identified a benchmark value of £38 million in association with that development. On that basis at least there is significant dispute.”
SHP say if the value per acre that was paid for Jentex was applied to their land they are again looking at a valuation of more than £20million.
Lease?
Reference was also made to previously submitted documents showing letters that outlined an offer from SHP to lease the land in a 125 year deal which included restrictions on night flights, development and a buy back option. SHP claim it was indicated RSP would deliver in the region of £25 million but then this was withdrawn.
RSP say the terms on which the lease was proposed were not commercially viable and were rejected on that basis.
Other owners of the land include the Ministry of Defence and the Met Office.
Funding
The issue of funding, and funders, was also covered – in part – in today’s hearing.
Lead examiner Mr MacDonald stated: “We have no evidence directly available to us that these funders have the resources to enable us to recommend that adequate funding is likely to be available to enable the compulsory acquisition, “ adding “We cannot ourselves as an examining authority verify this”
Mr MacDonald also made pointed reference to “3 gentlemen with xxxx in their name” due to RSP not naming investors on a ‘confidentiality’ basis.
Niall Lawlor, RSP, said that the shell companies and holding companies were kept in that structure so there were “no contingent liabilities.” He said investors wanted “clean Special Purpose Vehicles” for funding. It was stated that Belize-based MIO Investments was still the lender for the project but the company structure of RiverOak Operations was now a UK entity.
Nick Rothwell, for RSP, said the restructure of the company had taken time due to needing tax advice and that funding coming from abroad qualified for business investment relief and added there was no stipulation for revealing investor identities.
RSP say in submitted documents: “Business Investment Relief is an HMRC-approved scheme introduced to encourage non-domiciled UK residents to invest in the UK and does not require those using it to be disclosed. For the ExA to insist on full disclosure of those individual investors has the potential to undermine this type of investment in the UK.”
However, SHP said the investors should be made known and questioned where their compensation would come from if the DCO was successful
Mr McNamara, for SHP, said: “If the application is upheld who, or what, would be the party funding the costs due to us? The applicant has no money, the shareholders have no funding and MIO are providing nothing to give any comfort.”
Mr Rothwell responded: “So far all costs have been met through RiverOak Operations….we have provided sufficient funding for all our liabilities to date.”
A question was also raised over the BVI status of HLX Nominees Ltd which owns 60% of shares in the new structure.
RSP said HLX Nominees were regulated in Switzerland. This was disputed in a submission by Five10twelve Ltd. RSP said they would provide evidence. They also told examiners they would provide RiverOak accounts for the period from September 2017 to May 2019 by Friday week but the identity of funders is still at issue.
Hearings resume tomorrow with a examination of socio-economic issues.
Hearings for the Development Consent Order are being held at Laurence Suite, Building 500, Discovery Park, Sandwich.
The full statement from Kelvin MacDonald was as follows
4th June 2019
Funding issues
Kelvin MacDonald Lead examiner
“When we are asked to explain to the SOS how the order will be funded. In our recommendation report we talk to the SOS about mechanisms such as the Joint Venture agreement. We can talk about our understanding based on your responses with a range of questions and range of appendixes that our understanding is the current funder are Mr Rothwell, Mr Seitz, and Mr Housler and 3 gentlemen with xxxx in their name, and other funders that are likely to come forward. But if the examination were to finish tomorrow, which it is not, with 5 weeks left we may also state we have no evidence directly available to us that these funders have the resources to enable us to recommend that adequate funding is likely to be available to enable the compulsory acquisition within the statutory period following the order being made……….we cannot ourselves as an examining authority verify this”
If the Verifiable Proof is not forthcoming the warning is very clear what they will say to the SOS
Still seeing the SMAA advert saying no night flights which is blatently untrue as the examiners have concluded using RSPs own documentation that the DCO application if passed would include them.
It doesn’t say no night flights, read it, it is quite clear about the exceptions
having a QC (Quota count) of 3028 means there will be flights at night. Humanitarian, Emergency, Military and Royal flights DO NOT count towards NF so this only counts towards the Cargo Flights they anticipate may be “delayed”. Delayed by what is never quantified. 3028 means a Boeing 747 landing at night (QC2) means they can have 1514 landings during the year which are “delayed”. Not very efficient are they?
Yet again, the DCO unpeels another layer of absurdity. No money. No viability. No need. No commercial competency. No transparency. No customers. No airlines and erm…. no land.
The RSP latest ‘advert’ remains insulting spin. No night flights, apart from the night flights. Excellent. Sp, the same as before then? Excuses, late running nonsense. Night flights.
Residents at that point can go cap in hand to the community fund for some ear plugs so that RSP can land these vital and in demand goods of national importance. Shellfish, race horses and hmm, I recall, luxury cars anyone? Thank goodness someone is looking out for the national interest.
I want a fully operational airport like it should be but by people who are not friends with an MP or thanet auditors who sold it from F to BS of Infratil who’s address is 50 lothian square Scotland an offshore Panama address for all of Infratil and Lothian shelf of his sister who had many shell companies in Panama who sold it for £1.? Why the heck are we dealing with an offshore company which means money laundering and there is more to F. Maybe one day you will be able to realise the crimes that have been committed
The only crime here is one against punctuation.
Houses Airport cargo hub whatever happens there will be pollution more noise fact. At the moment we have hundreds of houses with permission to be built and hundreds more built in the last ten years on farmland.what is going to happen?? More houses will be built in thanet one way or another we have just voted in a new council the previous one agreed for more housing in the Haine Road and Nash Lane areas in westwood set on farmland including other building areas located around the island comes to between 3,000 & 4,000 houses leaving 13,000 more to be built in thanet before 2032. I wonder what is the most logical place to build these houses school industrial units we could put a of solar panels on the Manston site to supply all these new houses with electricity which would solve a lot of the pollution problems and more trees to make more fresh air. If an airport was going to work it would have 15 years ago as for a hub the road network is to bad for 40 plus miles and the m25 is no better. I just hope they sort it out quickly as sitting there waiting for a sunny day or Xmas each year is ridiculous and a waste.
What i wonder is why, given the crisis of climate change, one of our recent governments hasn’t passed a law saying that every new house or block of flats must have solar panels on its roof.
Mar Rees, I totally agree with your comment about the desirability of a law to require solar panels to be incorporated in the roofs of all new houses and commercial buildings.
This is becoming a farce.
For over a year the Examining Authority has been asking RSP where the money is, and for over a year RSP has prevaricated, obfuscated and evaded answering the ExA’s questions.
It is quite obvious that the few £M they have access to is sourced from an off-shore tax haven, and that they don’t actually have the £100M’s needed to do the job, even if the DCO was successful
They don’t know if their scheme is viable, they misquote their own data.
It’s really quite disgusting that this tin pot company of chances, led by a struck-off solicitor, should be able to interfere with the legal owner’s plans in this way.
So what was the difference with shp bought for a pound with around 350,000 pounds worth of debt a running so many shelf company’s and money from lots of dodgy accounts. Shp are not whiter than white !
The difference is that the land is legally, lawfully and legitimately owned by Stone Hill Park. When it was up for sale for 22 months, anyone could have bought it. RSP could have bought it, but they missed the boat.
Now they are trying (for the third time) to get their hands on the land using planning legislation. Twice they were turned down by TDC (Labour once, UKIP once), because RSP was unable or unwilling to say where the money, if any, was.
Now they’re trying again, using the DCO process. And once again, they can’t or won’t say where the money is coming from.
The difference between SHP and RSP’s accounts is that one is completely open and transparent and published at Companies House, the other is closed and secret and hidden away in some off-shore tax haven.
Well if RSP has not got the money , no DCO but we all know that is not the case and the majority of Thanet want there airport back which has totally been stripped of all assets! Not bad for a pound.
But it most certainly is the case.
RSP have made it clear that although they do have access to about £15M, the vast majority of the £300M needed to get the airport going again they don’t have. Their intention is to try and raise that money post DCO.
The majority of Thanet do not want “their” airport back. If the majority of Thanet people had flown from Manston when it was open, it wouldn’t have failed.
Sorry Andrew I beg to differ on surveys that have been carried out over the last two years have been in favour of the airport returning for business and most definitely not more housing development .
Of the councillors elected in May 2019 the majority in Ramsgate wards were elected because they didn’t want an airport flying over Ramsgate. 75% of Ramsgate Town Council is opposed and 12 of the 18 TDC Ramsgate councillors were chosen because they oppose the airport. So NO, Ramsgate chose to oppose the Cargo Hub
It certainly looks as if RSP has no money.
What reliable impartial surveys have been carried out in Thanet during the past two years to assess the percentage of public support for a 24/7 cargo hub airport at Manston, with both Herne Bay and Ramsgate being under the proposed flight path?
It doesn’t matter, in the case for or against RSP, whether anyone in Thanet wants or doesn’t want more housing development, as that’s a separate issue.
My last comment has disappeared, no idea why. How strange.
I was listing those national interests we need these imports for according to RSP; shellfish, racehorses and luxury cars I seem to recall from the last public hearings?
And I was also saying that yet again this application examination consistently demonstrates there is no evidence of need or viability.
Alas yet again we have to misleading adverts in respect of investment commitments and jobs and night flights. The ad that states no night flights, apart from the exceptions, like last time. Night flights. Even the inspector challenged it during the last round and we simply will not be fooled by the semantics of flight types or exceptions. Irrespective, it is the day flights we should be concerned about with those luxury and important langoustines rumbling in for an urgent delivery 500 feet over our royal harbour.
The quicker this DCO is rejected, the more faith we will all have in evidence based decisions and assessments.
someone seems sensitive about that misleading advert it seems
Not at all, I have no idea where Emmeline’s comment is, it isn’t showing on the back end
Seems my comments about the misleading SMAa advert have disappeared too, very strange !!
There was a rather disgusting comment in the thread which appears to be why it got dumped (I don’t manually approve every single comment, only new users or suspect IPs or obviously offensive ones)
Thanks Cathy, it came back. Now I’m just repetitive!
Sorry. Kathy not Cathy.
The thread was in spam. I have released it (so to speak)
I’m quite surprised that the Application has got this far. It’s quite obvious that RSP’s project fails on at least a couple of major points:
Need: there is no shortage of dedicated air cargo capacity in the UK, and even if there were, Manston would not be the place to meet that need;
Funding: on the one hand the £15M RSP claim they’ve spent is totally unaccounted for, coming as it does from secret investors in an off-shore tax haven; on the other hand, RSP expects to be given SHP’s land *before* they try to raise the money (which they haven’t got) from banks and investors to complete the job.
All the way through, RSP’s application has been an exemplar of how not to launch a DCO application. The Planning Inspectorate could use it as a template for worst practice.
It’s time, surely, for the final curtain to be drawn on this farce.
Estate Agents still waiting for your business —–> Enter.
Very well balanced account of the days hearing, guess those who were not here are twisting the facts to their own agenda.
Hmm nothing changes there.
Having watched it Live I suspect you haven’t
I am here again where are you.?
Here again where are you, and Marva Rees why are you not here I can then formally introduce myself to you.
“Like Xmas” is the “Youth of Thanet” – I claim my £5!
Humbug, more like.
How interesting;
A year ago, almost to the day, the Thanet Extra online news thing published a headline:
“Where’s the money to pay for Manston?”
And here we are, 12 months on, and exactly the same questions are being asked.
I think we know what the answer is.
How long do these things need to go on these days? Can anyone make a decision and get on with it. Dont forget the site is contaminated from WW2.
If you look on the Planning Inspectorate web site, you’ll see the time table for the Application.
Contaminated or not, it didn’t stop several attempts to run commercial aviation from the site.
Here you are:-
https://infrastructure.planninginspectorate.gov.uk/projects/south-east/manston-airport/?ipcsection=advice
Marva Rees,sorry about the mangling of your name in my previous post: predictive texting strikes again. Your views on RiverOak’s lack of access to money should be deflected by the thought that the preparation of their DCO Application and legal submissions as well as the huge amount of work in refining and providing further and better particulars, higher levels of compensation for persons affected by noise, etc., all involve commitments and expenses. I am reliably informed that as many (or more) as 100 professionals have been involved in preparing and integrating these thousands upon thousands of reports. All of them have been paid or are sure they soon will be. None of them are fools or knaves. They understand the merits of the project and their back offices need feeding and know their customers. These teams have been working together across years, now. All of that would long ago have come a cropper in the absence of money and most of those people have regulators or professional bodies who remain vigilant and protective. Apply Occam’s razor: you can’t see the money but you can see evidence that it has been there when required, day in and day out. Has the same been true of Musgrave & Cartner?
Musgrave and Cartner are not attempting a land grab. RSP is.
It seems to be the case that RSP has access to around £15M. This, indeed, will pay for the Application process. But just whose money this is, and where it comes from, remains a mystery. First it was a Belize registered company, now it’s BVI. But, despite the PI and the ExA asking for over a year, the details remain hidden.
Be that ad it may, RSP does not have the £300M to actually bring the airport back on line. RSP says so in its documentation. Its plan is to get Compulsory Aquisition first, then look to raise money from banks and investors subsequently. They want the ExA to recommend to the SoS a CA even though there is not the slightest guarantee that the necessary funding will materialise to see the project through.
Sorry, thousands upon thousands of pages of reports, but hundreds of reports.
I don’t think there should be an airport at Manston anyway, whether RSP can fund it legitimately. Aviation should be reduced, not expanded.
Whether or not…
For those who keep banging on about tax havens, stop and think for a moment. If you have a private pension fund or an investment account, rest assured that banks and pension providers make ample use of tax havens in order to maximise the returns they give you. In light of this, will you cash in your investment or forgo your pension? No, I didn’t think so.