Some good news for the Harbour
We write with the momentous news on the Thorpes’ residential development scheme. A draft S106 agreement is in circulation that at last has the potential to safeguard the harbour’s interests. If we can now succeed in persuading the owners to be transparent about their financial affairs, this may actually result in some additional spending in the harbour – albeit limited and still unpredictable. Your support has got us this far – please help us to continue the good work.
But first, let us celebrate the enormous progress that has been made. This is a big victory for BHT, for all our supporters, and most importantly, for the harbour itself (if you consider what the outcome might otherwise have been). The IWC, after a decisive opinion from their planning QC, has agreed with our planning barrister and accepted the bulk of our recommendations. As a result the owners appear to be on the threshold of taking a significant step towards fulfilling their legal obligation to manage the harbour and to deliver at least some benefit to its users, which we acknowledge.
BHT has always accepted that when and if the interests of the harbour mean that its assets need to be developed, whoever shoulders the financial risk should be fairly rewarded. The agreement includes a formula whereby the developer will keep as profit 20% of the Gross Development Value – predicted at £6,221,500. This means that whoever finally brings this project to completion is in line to make £1,244,300, unencumbered by any liability to the harbour whose sacrifice of operational land and cooperation will have made this development possible. If the developer chooses to keep ownership of the new buildings, the majority of the profit will be represented by the buildings let at market value to the harbour company .
Under the formula, the harbour should receive any amount realised in excess of these figures – either if the revenues are greater or the costs lower than predicted. This has only been made possible because BHT have successfully insisted (strongly against the wishes of the harbour owners) that the profits should be calculated based on full disclosure of development finances to the planning authority. The developers last draft of the s106 could have meant there was no analysis of actual costs at all.
Furthermore, in contrast to earlier versions of the S106 proposed by the harbour owners, there is no longer a risk that the harbour could be obliged to take on yet more debt, in this case to fund the £1 million purchase of the new facilities from sister company Bembridge Investments Limited.
Overall, compared to the likely end position under the proposals just before planning committee 18 months ago, coupled with the terms sought by the developer in the s106 since then, this situation is better, if still far from perfect. The Statutory Harbour Authority could potentially have been deprived of the ability to put some £1.75 M towards improvements within the harbour itself. This is a huge figure in terms of the harbour’s sustainability .
All this simply would not have happened without the hard work of the trustees, the expertise of our professional advisers, and your financial and moral support. We have come under enormous pressure and sustained attack; agreement between by the IWC, the developers and harbour owners is a complete vindication of our stance.
It may be tempting to think that this important victory means that all will now be well. However, we cannot afford to give up until we achieve the ultimate goal of bringing about financial transparency in the affairs of the harbour. Without this, all our good work will be undone – the declared possibility that someone else entirely may be the developer coupled with the opaque and complex structure of the companies controlled by the owners could easily be used to make it impossible to know if the harbour is seeing a penny of the money it is due. Should the residential development ultimately get a planning permission and proceed, we will have to use every means possible to monitor progress and ensure adherence to the terms agreed.
Many in the community have misgivings about how acrimonious things have become these last few years; we regret that, and hope that they will come to see that this is the unavoidable price we have to pay to keep our harbour safe. Our harbour’s affairs have still not been addressed by the Department of Transport; we are optimistic this may change.
Ultimately we believe there will come a day when there is no longer any need for BHT to watch over the harbour. In the meantime we thank you for support thus far, and hope we may continue to count on you in the future, until that day comes.
With best wishes
Bembridge Harbour Trust