How Do The Figures Stack Up?
There is little doubt that the Waterfront Consultation document is a very detailed paper from a planning perspective and it raises a number of detailed issues. On closer inspection however there is very little about the financial viability of the project beyond headline figures in terms of expected States reward over time and a general assurance by WEB.
Taking a moment to put myself in the shoes of a States Member considering the proposition, I should have thought that the economic and financial viability of the project would bear some reasonably detailed examination, perhaps having regard to the following:
· Is the appetite currently there for eleven major institutions to let premises given current market turmoil, credit crunches and the slow down in the Western economy?
· What is the financial structure being entered into and what safeguards are there should development not proceed as envisaged?
· How are we to deploy the cash to the benefit of the economy, as inevitably there will be losers as well as winners?
· How is the development being financed and by whom? Is finance secure?
· What level of rents is expected to underpin the scheme? Are they inflationary?
· How does the development stand in with competing developments and are there enough requirements to take up over 600k sq ft. of space, bearing in mind new builds will accommodate circa 5500 workers, above and beyond new development to date on the Esplanade.
· The single developer risk is not discussed in any detail although we believe this has been a concern in previous State’s debates.
We live in very changed times from a year ago, credit is hard to get, markets are illiquid, property values internationally are falling and record losses are being reported. It is unfortunate in terms of timing for any debate, but should not be ignored given the major disruption proposed. I should have thought it is an aspect States members will require reassurance on.
Chamber of course is not privy by any means to specific negotiations. Also the issue of confidentiality between individual parties does present practical problems on transparency which are fully appreciated. We understand that these issues fall outside the Planning Minister’s brief following discussion with him. We have therefore written to Senator Walker asking that a third party professional financial and economic risk assessment be undertaken to provide the level assurance we believe market circumstances dictate. We have yet to hear whether our suggestion finds favour, but we do feel it is a wise undertaking given current market uncertainty before setting out on a project of such magnitude.
It may very well be this work has been done behind closed doors at WEB but if so it needs to be bought forward in a manner that comfort can be taken from. That assessment needs to be current, for interest shown a year ago may well not be the same now.