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To all nominated members of the
Comrie Development Trust Board looking to
be returned on Monday 20th August
Filed 18 Aug 07
I am writing this as a plea
to you, to each seriously consider your own position on the question
of purchasing Cultybraggan Army Camp. I want you to honestly examine
your own conscience and ask yourself if, hand on heart, you truly
believe that as interim Directors, you have acted at all times in
the best interests of your members.
Rushing into a purchase, without a properly constructed
business plan is recklessly foolhardy. At best it makes you seem
naive and at worst, well words fail me. You are all intelligent
people, yet you are seemingly blinded by the low valuation put on
the camp into believing that you have at last found a free lunch.
In a commercial scenario, there is always a price to pay and in
the case of Cultybraggan Army Camp, the price will be paid for many
years to come by the community that you seek to represent.
Many of you don't have commercial experience,
and have worked for government agencies, where you may well have
internal "dog eat dog" politics going on, but you really
have no idea how the commercial world works.
DTZ and HTA have in the words of some comedian
been "having a laugh". Their presentations to date have
been woeful. Much was said about this at the last meeting and your
response was that you always said that the business plan would not
be ready for the 13th August.
What you actually said in the July bulletin was
that the consultants would present funding and running costs and
uses for a financially viable development. They did not fulfil their
brief and less cynical people than me are really surprised and disappointed
in you all, for allowing this to happen. You have experienced business
men like Marc van Grieken advising you on how to liaise with consultants.
How on earth has this happened? A standard grade business management
student would be able to advise you for free that taking out huge
commercial loans against a business proposition of allotments, sports
fields and a couple of storage units is not a great idea.
There is a reason why the valuation is so low.
You need to listen to the mumbled words of the HTA guy about contamination,
to the experienced words of Mr Denholm re road access, to the worries
of an experienced farmer re drainage.
You started this project with an application to
the Scottish Executive that promised sustainability, renewable energy,
employment and community engagement, yet 3 days before the members
vote (on un-numbered photocopied ballot papers), you are now basing
your case for purchase on a "worst case Scenario", pinning
your loan repayment on 8 homes yet to be sold. In my experience
purchasers looking for a £100k plot/200k build will not be
looking for lock up Nissan hut neighbours, just as I don't think
the Nissan hut neighbours will be able to get insurance to leave
valuable stock and equipment on a remote site with low grade security.
Its all a bad plan, it's ill conceived and it
is certainly not a plan worth 180k of Big Lottery money. In the
July issue of the Bulletin you stated that the Big Lottery would
not pay out grant claims if the work was not done. I sincerely hope
that this is the case here.
So, we have a situation where a lot of people in the village feel
badly let down/patronised/misled and very unsure as to whether or
not you have the commercial experience to handle a project of this
Given that this months DTZ buzzword is worst case
scenario, lets examine a few random, but real, possibilities:
• The Institutions providing the loan capital (for the purchase
and working capital) set conditions to maintain the commercial
value of the site, this includes a restriction on length of tenants
leases and a clause that in the event of bankruptcy of the CDT
the lease ceased. Lenders aren't interested in repossessing a
property with a whole range of low value "sitting" tenants.The
conditions placed by the lender put off any tenant interested
in a lease of reasonable length. Very few tenants come forward.
• Child has accident on site while playing on site with
no security guard and parents sue (yet apparently we don't yet
know any figures for insurance).
• We are able to gain interest of a few Nissan hut tenants,
but they can't move in because they cant get insurance for their
stock, because of lack of security.
• Vandalism increases and we have to employ a 26k security
guard as did the MOD before everything was nicked.
• Our interested Nissan hut tenants need large lorry deliveries
(a key benefit put forward by HTA) but the road access is incompatible.
• The contamination mentioned on 13th August turns out to
be hazardous and extremely costly and has to be removed before
any plans for tenants or luxury housing can be progressed.
• The cost of refurbishing the Nissan huts(12K) for tenants
to move in cancels out the first two years rental income, so year
3 becomes year 1 in terms of revenue.
• No one wants to buy the house plots because they don't
want to live on an ex prison camp from the second world war with
large lorries making deliveries to tenant businesses.
This may all seem negative, but these are all
issues that the CDT directors and its bespoke consultants should
have considered in detail as they embark on their present course,
these factors could seriously undermine the viability of any of
the options advanced to date, and lead to a perpetual negative cash
flow; particularly during the vital years 1 to 3.
But you see, I think that with a couple of exceptions, none of you
are actually this naive.
I don't believe that you haven't envisaged all
of these worst case scenarios.
I don't believe that the Tudor Trust whose average
non repayable grant stands at 45k would enter into a repayable loan
of this nature without seeing a detailed business plan.
I don't believe that we couldn't get grant money
because we are too affluent as a community.
I believe that there is indeed a very detailed
business "scheme", a long game, which is unlikely to be
placed before the ordinary members of the Trust, because it does
not meet the strict sustainability and renewable criteria that this
project was sold to us on in the first place.
This of course is the same reason why we can't
get grant monies.
At the meeting on the 13th August, Mr McDowell
of DTZ referred to Cultybraggan as real estate (very OC) and reference
was fleetingly made to the potential of an anchor tenant. If I was
the Director of the Tudor Trust (Christopher Graves?) I would not
be mightily impressed at the possibility of several small sitting
tenants, probably local people, all difficult or embarrassing to
get rid of if the loan had to be called in. I would be definitely
looking for the security of an anchor tenant, a tenant of substance,
willing to enter into a tenancy for a reasonable period.
But a tenant of this calibre will only commit
to this project if they are sure that the CDT is financially stable
and that the site has a good road access. This is where the real
reason for the community project lies. To entice the anchor tenant
or indeed an overall purchaser there would be a need to gain agreement
for road access. To the road planners DTZ will spin/enhance and
talk up the community aspects of the plan. DTZ already hold the
key to the anchor tenant/ long term purchaser, but they in turn
only want to take the key from DTZ once the road issue is sorted
and other planning issues smoothed. This is what DTZ do, find good
sites, make them better as cheaply as possible and then sell/lease
them on. It is their bread and butter, why should they be behaving
any differently on this project?
The bit I'm really personally upset about is the morality of this
situation. I'm concerned about the application form sent to the
Scottish Executive at the start of this whole process. This promised
so much for our community (signed off by AC) and then all the endless
press releases and ra-ra about community benefits (largely quoting
hen the clause 51(2b) ballot question which in
the May bulletin was sold to the wider community as a stage along
"this is why you are only being asked
if you want the opportunity to purchase the land at this stage".
In the July bulletin we were told that local people
voted overwhelmingly to have the opportunity to consider this purchase
and yet as if by magic in the August bulletin we are told that
"our community vote had a 72% turnout
with a 97% yes majority in favour of taking this opportunity."
So, Board of Directors, in May did we vote to
take this opportunity or consider this opportunity? Most people
in the village are quite clear that they voted on the basis of the
May bulletin, why wouldn't they, they believed you back in May.
So, why am I writing this? I think you all need to individually
examine your own role in this debacle and re-assess whether or not
you personally want to continue along the path we seem to be going
along. Everything seems to be becoming increasingly desperate, with
talk of worst case scenarios.
As Dr Irvine rightly pointed out it is not nice
to use up the goodwill of funding agencies and it is really not
nice to be involved when a loan is called in. It is just not as
simple as saying your liability is just £1. It is not nice
to have to throw tenants out when they have invested blood, sweat
and tears to get businesses going.
Of course you may not agree that doing the right
thing by people and telling them the truth are important elements
of a community project, I happen to think that they are fundamental
to its success. Remember on 25th June (just two months ago) DTZ
and Alan Caldwell were selling this project to us as a flagship
of community ownership, which, as model of sustainable development,
could be rolled out across Scotland.
Obviously none of this criticism applies to the
newly nominated members of the Board, but I would also ask them
to personally consider what I have said and ask themselves if they
really want to become involved in what is happening at the moment.
Think about this and do the right thing on Monday, there really
is no shame in standing down.