The project to repair Bembridge No 1 Groyne has been abandoned
Bembridge Harbour User Group (BHUG) have confirmed that after five years’ effort they have decided to wind up the project to repair this vital piece of harbour infrastructure. We have every sympathy with those who had to take this heartbreaking decision and understand their reasoning. As they were reviewing their options, BHUG considered canvassing support from the wider public, whose economic and social health relies on the harbour. Such a campaign would help inform and put pressure on Malcolm and Fiona Thorpe, the directors of the statutory harbour company (SHA), to allow progress and meet its statutory obligations; we hope this can be progressed cooperatively with other stakeholders. In the meantime set out here the most up to date background to this sorry situation, so that members are fully aware of how we got to this point.
How has this happened?
BHUG had committed to raising the bulk of the c. £250,000 cost of the groyne repair project from the community; it had commissioned extensive financial, geological, technical and legal analysis to ensure its feasibility. The direct beneficiary of all this effort and expertise would have been the SHA, which has a legal obligation to keep the harbour navigable.
In August 2019 the Thorpes halted negotiations to repair the groyne until they had received a guarantee that BHT would not make any future comment on the highly contentious planning application by their property company, Bembridge Investments Ltd (BIL), for housing around the harbour. Ultimately the Thorpes insisted that they would not remove their ‘Limbo’ unless the planning permission was granted with an s106 planning agreement in terms they found acceptable. After very extensive negotiations, BHUG concluded that the Thorpes were not prepared to abandon their position and therefore the project was no longer feasible.
The directors of a company have a legal duty under the Companies’ Act to protect and promote its interests; it is hard to see how these actions by directors of BHIC could be said to comply with that duty.
What are the terms of the property development?
We remind members that the property development application as it stands seeks to obtain special permission under “enabling development” provisions to build in a place where permission would never normally be granted for houses. The grounds for this special permission are that the very survival of an asset of vital importance to the community – the harbour – depends on an urgent injection of cash that the proposed housing development would create.
Clearly however no such development could take place unless the developer was able to make a reasonable return. And indeed, the planners have already agreed that the developer retains all the predicted profits from the development, 20% of the £6m project value – i.e a profit of £1.2m.
One might however expect profits beyond this to go to the harbour so as to meet the urgent and pressing needs that were used to justify the development in the first place. This is not effectively secured. The application BIL have put forward predicts no cash to the harbour. Indeed, if there were any profits beyond the 20% already agreed, the S106 allows room for BIL ( or any eventual developer) to manipulate those too. Instead, carparks, office buildings and shower facilities will be moved around and upgraded. BHT argue that this is like fitting a new kitchen when the roof is leaking. A more rational priority would be the essential maintenance work (of which the groyne is only one example) and catching up on a seven year dredging backlog.
To make matters still worse, not only does the harbour get no cash, but the development would actually deepen the SHA’s financial plight: land which it does own would be lost to BIL without compensation; land which it does not own, but to which it has always needed access in order to operate, would be lost to new houses; there would be a dramatic reduction in harbour side access, critical entertainment space and parking. What future potential for expansion does this leave the harbour?
On top of all this, the agreement burdens it with ongoing financial and contingent liabilities. The most extraordinary of these is that it will pay full market rent for the next 25 years for those very facilities which the application claims to be what the harbour desperately needs to survive but cannot afford to build for itself out of its own revenue streams.
These revenue streams would be considerably healthier if the Thorpes had not consistently been making unreasonable and in some cases , what appears to be unlawful extractions from BHIC’s incomes – which have made it loss making . As a result it has been starved of the maintenance funds it is legitimately entitled to. The Thorpes have also made BHIC liable for loans and cross guaranteed the debts of other companies (the very same mechanism that caused it to go into administration 2011).
What is the connection between the groyne and the property development?
There is no indication whatsoever that the harbour will see a penny of cash from this project. Neither project depends financially, commercially or legally on the other. There is no connection between the two projects. The only link is that the Thorpes have made it clear that unless BIL gets its houses built and its profits made, they will not let the public donate a huge amount of money towards a project which they have declared to be a top priority for the harbour.
BHT recognise that shareholders and directors should enjoy legitimate financial returns. We do not seek to restrict these legitimate incentives. We do not press for anything outside the simple application of the laws, regulations and government guidance relevant to all SHAs . BHT only do so in the interests of the harbour and the communities that rely upon its sustainable use. If any members read our actions differently, and so in some way conflicting with their own objectives for the harbour, we would be very pleased to talk, answer questions, and provide evidence.
Chris Attrill, Jonathan Bacon, William Bland ( co-opted), Jeremy Gully (chair), Felix Hetherington (secretary), Phil Jordan (co-opted), Norman Marshall, John Raymond, Sara Smith, as Trustees
For and on behalf of
Bembridge Harbour Trust