Sunday, 6 July 2008

Best laid plans...

From Scotland on Sunday:

Glasgow 'will struggle to sell properties' to raise £100m for 2014 Games

Published Date: 06 July 2008
By Nathalie Thomas

CONCERNS are growing that Glasgow City Council will be unable to raise up to £100m towards the 2014 Commonwealth Games due to a decline in interest for regeneration projects.

The council is hoping to raise funds from the sale of 56 "surplus sites". But commercial property experts warn that, given the current state of the market, it is unlikely the properties, which include several former schools, will achieve anywhere near the expected sum.

The market has been slowing down and prices falling and few expect a recovery until next spring at the earliest.

There are also mounting fears that the council will not be able to find an appropriate private sector partner for the sales, which it is proposing to carry out through a joint venture. With many of the major building companies suffering severe financial strain, sources say there is no appetite for the project. If it fails to get off the ground, sources warn that the council is going to fall short of the £375m cost of the Games. Around 80% is expected to be met by the Scottish Government, with Glasgow City Council providing the rest. One leading commercial property consultant said: "I'm not sure there is an appetite for the joint venture in the commercial sector. If it doesn't happen, they are short of a fairly serious capital receipt."Another source said: "Companies that tend to get involved with these joint venture projects rely on banks and debt financing, and that's incredibly hard to get your hands on these days. It doesn't surprise me that they'll experience difficulties."

David Bell, director of the public sector group at CB Richard Ellis, warned that regeneration projects are always the first to fall by the wayside during economic downturns due to the higher risks involved. "They are now really quite peripheral in this market," he said.

A spokeswoman for Glasgow City Council said the process of finding a joint venture partner is "still ongoing". She added that the money raised through the sales will go towards supporting "a number of the council's priorities", including the Commonwealth Games, but a specific proportion of the £100m has not been earmarked for the sporting event in 2014.

The deadline for proposals was March 14. It is understood the council wants to transfer all 56 surplus sites to the new joint venture by the end of the current financial year.

The news comes just a few weeks after Lend Lease, the Australian developer working on the £1bn Olympic Village in London, admitted it has so far not been able to raise the £450m it needs to fund the site in Stratford. Lenders are increasingly reluctant to back the project because they fear falling property prices could lead to them not regaining all of their money.

And from Halifax, more news about the failed Canadian bid:

Bid report bang on — councillors

Sun. Jul 6 - 11:29 AM

A handful of municipal councillors feel the findings of an independent review of Halifax’s failed 2014 Commonwealth Games bid are bang on.

The councillors that The Chronicle Herald spoke to Saturday admitted that they haven’t had a chance to read the entire report, which was released to the public Friday. But they said everything they have heard so far backs up their earlier complaints about the bid process.

"I don’t disagree with anything they said," Coun. Andrew Younger (East Dartmouth-The Lakes) said of the review by the Public Policy Forum in Ottawa. "Their findings are exactly the same things that myself and a number of other councillors complained about from early on."

The nine-page report highlights a number of problems with Halifax’s $1.7-billion bid, primarily its lack of transparency.

"It was very frustrating," Mr. Younger said. "I’m sure members of the legislature felt the same way. MLAs, councillors, none of us knew anything about the bid.

"We’re supposed to be the guardians of the public purse, yet nobody would tell us anything."
Coun. Gloria McCluskey said it was "ridiculous" to think that everything had to be kept hush-hush so as not to tip off the competing cities of Glasgow, Scotland, and Abuja, Nigeria.

"Something that’s handled like that, to me, is doomed to failure," said the Dartmouth Centre representative. However, Ms. McCluskey said not all the blame can be put on the bid committee.
"Everybody was sworn to secrecy," Ms. McCluskey said. "That’s the biggest mistake I made was agreeing to that going the way it went."

Coun. Sheila Fougere (Connaught-Quinpool) said the failed bid should be used as a learning tool.
"No matter how you look at it, from beginning to end, it ended up being a huge disappointment," she said. "But there are lessons to be learned from it.

"Secrecy and lack of transparency . . . it just breeds distrust and discontent. Whereas if you put everything above board, people have the opportunity to not only react but to perhaps react in a positive way."

Mr. Younger agreed any Canadian city thinking about hosting an international event could learn a lot from this, especially what needs to be in place before the city signs on.

"I don’t think as a country we can be bidding on international events of this magnitude without early in the process knowing how much the federal and respective provincial governments are going to contribute to the bid and what facilities are needed," he said.

Mr. Younger also criticized Ottawa for only offering money for recreation facilities if Halifax agreed to take on the bid.

"If a community needs facilities, the federal government should be there as a partner, regardless of whether there is a major event coming," he said.


No comments: