City Council

Waverley Market lease 1p a year for 206 Years

By The Basa ⋅ October 16, 2006 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

What a bargain. Edinburgh Council leased the common good-owned (i.e. ours - the citizens) site of the Waverley Market for 206 years at the rate of ONE PENCE per year! So in the year 2188 when the lease expires the citizens of Edinburgh will have profited to the tune of £2.06 pence for a site that should have brought in the region of £20 million into the common good fund.

Andy Wightman brought this scandal to the attention of the Local Government Committee of the Scottish Parliament—who are investigating common good asset abuses as part of their examination of Public Petition PE 875—and the City of Edinburgh Council were ordered by the Parliament to explain this misuse of the public’s funds.

One might assume that the Common Good Fund would receive a significant boost from the Princes Mall development. This, however, never happened. Instead the Common Good Fund lost both the revenue and the capital value inherent in perhaps its most valuable asset.

Prior to the development of Princes Mall, the annual revenue accruing to the Common Good Fund was £13,000 from car parking charges.

In March 1982, a 125 year lease was granted by the City of Edinburgh District Council to Reed Publishing Pension Trustees Ltd. and Reed Pension Trusts Ltd. (who were responsible for constructing the new shopping centre). In April 1988 the Council leased back the new shopping centre. In November 1989, the Council agreed to extend its ‘head lease’ from 125 years to 206 years (i.e. from 1982 to 2188).

Immediately afterwards, the Council terminated and sold its 1988 sub-lease interest to Letinvest plc and Speciality Shops plc who, at the same time acquired the Reed Pension Trusts’ leasehold interest. The Council thus exited from the leaseback deal but the Common Good Fund remained the owner.

In 1998 the leasehold interest was sold for £21,300,000 to Scottish Metropolitan Property plc. In 2005 the leasehold interest was sold first for £40,500,000 to Continental Shelf 274 Ltd. and PM Limited Partnership and then for £37,600,000 to PPG Metro Ltd., a company owned by David Murray. The annual rental roll stood at £2.3 million.

In the Financial Appraisal prepared for the Council on 4 June 1981, the value attributable to the site is stated as 50% of the realisable development value. In other words, the Common Good Fund as the owners of the solum or site would, had things been organised differently, have received half of the £37.5 million paid for the leasehold interest by David Murray and be in line for some 50% or so of the annual rental income.

Instead, since 1982, the Common Good Fund of the City of Edinburgh has received the grand total of 23p for one of the most valuable pieces of real estate in Edinburgh since the site is let for a rent of 1p per year (if asked). If the penny rent was not indeed asked for then the Common Good Fund has received precisely nothing.

The City of Edinburgh responded by saying that the transfer of the Waverley Market site out of the Common Good Account and into the Council’s Account where it was then given away for a penny a year was a “mistake” — shurely shome mistake!

No mistake says Wightman—who responded with a written response that blasted holes in the Council’s excuses. Wightman has demolished the Council’s arguments by quoting their own minutes and records which clearly show this was no mistake.

Wightman is nothing if not detail-orientated. Now if as is expected, the council are found to by lying when they say it was a mistake, who is going to be held responsible. The tale takes some reading but the following are some links which will explain it all and show the council to be liars:

Original report by Andy Wightman into City of Edinburgh Council & Waverley Market:
http://www.caledonia.org.uk/commonweal/docs/edinburghcg_20060426.pdf

Local Government Committee meeting to discuss petition PE 875 & City of Edinburgh Council re Waverley Market etc.:
http://www.scottish.parliament.uk/business/committees/lg/or-06/lg06-1702.htm#Col3879

Response by Andy Wightman to City of Edinburgh Council report of a £20 million “mistake”:
http://www.caledonia.org.uk/commonweal/docs/aw_response.pdf

Can’t wait to see the Council response to Wightman’s…..

Random Posts you may have missed

• September 30, 2006 -- Liar, Liar, Pants on Fire
• June 24, 2005 -- The knives are out
• April 29, 2005 -- Locals have shamed the council
• August 22, 2005 -- Airport Taxis - open for comment
• July 30, 2006 -- MSPs, Please speak out publicly

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