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From: Colin Campbell
Sent: 24 February 2015 09:47
To: Scrutiny
Subject: Jersey International Finance Centre
The economic situation in 2015 is very different from that prevailing in 2008 when the Masterplan for the Esplanade was agreed by the States and the recent survey of major firms in the island does not indicate they anticipate matters improving in the near future.
One fundimental point that has never been addressed is WHY the States of Jersey are insisting on going into competition with the private sector as in business any potential profit always has to be balanced by the equally potential risk - despite inferences to the contrary by both politicans and the SoJDC there is no such thing as a guaranteed profit!
Despite repeated claims over a lengthy period by the SoJDC that "negotiations with potential tenants are well advanced" there still appears to be no firm evidence that appropriate pre-let agreements are in place to allow development to commence.
On the contrary the current development of the Dandara building on the Esplanade has taken the one large finance company that was known to be looking to move (RBC) out of the equation whilst also placing a further large amount of office space (50% of the building?) on the market - presumably Dandara is thus in the prime position to attract further tenants.
The movement of RBC to the Dandara building will release its present substantial site yet neither SoJDC nor the Treasury Minister have offered any explanation as to why that building will not prove equally attractive to 'potential' developments on the waterfront. There is also a large amount of other office space in St.Helier that has been available for months/years without any takers.
Equally there are approved planning applications where private developers have held back from starting work - presumably because they cannot find companies willing to sign leases?
Are SoJDC pre-let agreements at full market rates (as at 2015) and include at least a cost of living increase annually for the next 25 years?
How has the much quoted £50 million 'profit' on the finance centre development been calculated:
- Do the calculations take into account the inevitable toxic materials that will be 'discovered' below the car park when excavation commences - evidence other developments on the reclaimed land around this area where 'great surprise' was voiced at the problem after theproject was underway although everyone was fully aware of the random dumping that had been allowed years ago.
- How have building costs been calculated when the project may take a decade or longer?
- Do the plans include any changes to the underpass?
- How has the rental income been calculated - 100% occupancy?
- What happens to the calculations if only 1 or 2 blocks are ultimately built?
- Is the £50 million based upon 2015 values or when the project is finished?
Colin Campbell