News: Council left £466,000 out of pocket by town centre developer
Cash-strapped Rotherham Council says that it has exhausted all the avenues in a bid to recover a £466,000, decade-old debt from a company it selected as a development partner for a high profile town centre regeneration scheme.
The Westgate Demonstrator Project was part of the much-vaunted Rotherham Renaissance programme that introduced apartments to the riverside in the Old Market and Keppel Wharf buildings and included the restoration of the Victorian, Grade II listed, Imperial Building.
Now council documents show that the developer, Iliad, never paid a premium to the authority after the work was completed in 2013. The debt remains unpaid despite the developments being sold on behalf of client and original developer, Iliad, in a deal worth close to £4m in 2019.
The debt relates to the invoice for the lease premium and is listed as £466,360.22. The council is proposing to write it off having been unable to get it paid.
In a bid to kickstart housing and mixed use regeneration, and reduce the risks for a reluctant private sector, Rotherham Council sought a developer in 2005 to bring forward projects on authority-owned sites. Sale documents showed that all the completed blocks were held long leasehold on new 160 year leases from September 2006 from the Council at a peppercorn rent.
The multimillion pound schemes resulted in 61 new apartments and around 20,000 sq ft of ground floor retail space but the economic downturn following 2008 meant that a proposed Iliad scheme for the site of the former All Saints Building was scrapped.
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Council papers state: "The Council proposes to write off a debtor balance in relation to IIiad (Rotherham) Ltd, to the value of £466,360.22, dating back from 27.03.2013. The debt stems from an old regeneration scheme where RMBC entered into a Development Agreement with the developer Iliad to deliver the Westgate Demonstrator Project.
"Under the terms of the Development Agreement just prior to commencement of construction on site Iliad and the Council would enter into a long term lease. As the buildings were completed Iliad would then pay to the Council a Lease Premium. However, IIiad got into significant financial difficulty and were unable to meet the lease premium and ultimately fell into liquidation.
"The invoice/debt relates to the invoice for the lease premium. The Council has pursued this debt through a variety of channels over a significant period of time, however, it is now believed that all avenues have been exhausted and the debt should be written off."
The Council added that it has used normal debt collection routes and hired a legal firm to lodge its case, only to be told that "the Council is unlikely to ever see any return from this process."
According to Companies House, Iliad (Rotherham) Ltd continues to trade and there are no listings in the London Gazette regarding its liquidation.
Iliad Group continues to develop properties in its native Liverpool, most recently a 120-apartment project called "The Eight" in 2021, and the restoration of a Georgian Terrace, also in The Ropeworks area of the city in 2024.
The Council said that it will continue to monitor the case and added that there would be "no impact on the Council’s reported financial position" as provision had already been made in its accounts in preparation for the debt being written off.
Iliad website
Images: GVA
The Westgate Demonstrator Project was part of the much-vaunted Rotherham Renaissance programme that introduced apartments to the riverside in the Old Market and Keppel Wharf buildings and included the restoration of the Victorian, Grade II listed, Imperial Building.
Now council documents show that the developer, Iliad, never paid a premium to the authority after the work was completed in 2013. The debt remains unpaid despite the developments being sold on behalf of client and original developer, Iliad, in a deal worth close to £4m in 2019.
The debt relates to the invoice for the lease premium and is listed as £466,360.22. The council is proposing to write it off having been unable to get it paid.
In a bid to kickstart housing and mixed use regeneration, and reduce the risks for a reluctant private sector, Rotherham Council sought a developer in 2005 to bring forward projects on authority-owned sites. Sale documents showed that all the completed blocks were held long leasehold on new 160 year leases from September 2006 from the Council at a peppercorn rent.
The multimillion pound schemes resulted in 61 new apartments and around 20,000 sq ft of ground floor retail space but the economic downturn following 2008 meant that a proposed Iliad scheme for the site of the former All Saints Building was scrapped.
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Council papers state: "The Council proposes to write off a debtor balance in relation to IIiad (Rotherham) Ltd, to the value of £466,360.22, dating back from 27.03.2013. The debt stems from an old regeneration scheme where RMBC entered into a Development Agreement with the developer Iliad to deliver the Westgate Demonstrator Project.
"Under the terms of the Development Agreement just prior to commencement of construction on site Iliad and the Council would enter into a long term lease. As the buildings were completed Iliad would then pay to the Council a Lease Premium. However, IIiad got into significant financial difficulty and were unable to meet the lease premium and ultimately fell into liquidation.
"The invoice/debt relates to the invoice for the lease premium. The Council has pursued this debt through a variety of channels over a significant period of time, however, it is now believed that all avenues have been exhausted and the debt should be written off."
The Council added that it has used normal debt collection routes and hired a legal firm to lodge its case, only to be told that "the Council is unlikely to ever see any return from this process."
According to Companies House, Iliad (Rotherham) Ltd continues to trade and there are no listings in the London Gazette regarding its liquidation.
Iliad Group continues to develop properties in its native Liverpool, most recently a 120-apartment project called "The Eight" in 2021, and the restoration of a Georgian Terrace, also in The Ropeworks area of the city in 2024.
The Council said that it will continue to monitor the case and added that there would be "no impact on the Council’s reported financial position" as provision had already been made in its accounts in preparation for the debt being written off.
Iliad website
Images: GVA
16 comments:
If RMBC are so cash strapped how are they able to commit to more than £1m to its household support fund?
And waste millions on cycle lanes that not only are dangerous but virtually no one uses!
Definitely agree, absolute waste of money
Money for the household support funds are awarded from the Government (via the DWP) to local councils to distribute. The money for cycle lanes is also awarded from Government for as part of environmental and transport improvement schemes, so in both cases this is not negatively impacting RMBC finances.
Whilst the money for cycle lanes comes from the government they are very rarely used and while council employees are constructing these lanes then they are not able to maintain the highways.
Just a polite suggestion here and I am genuinely trying to be helpful. Is it possible that you could find out a few facts before posting? It would involve a little reading and research but would be well worth it.
Support fund are awarded from the Government. Using Sheffield as an example, this doesn't seem to be the case, at least for not all the funds:
https://www.bbc.co.uk/news/articles/c7741y53x83o
The cycle lanes seem to be more popular just lately. Seen quite a few families using them. Well done RMBC.
Won't be long before Rotherham town centre hosts a stage of the Tour de France.
On yer bike!
One is too many
Only in your mind
Apparently the council is considering a proposal to build cycle lanes on Centenary Way.
A delegation from the French Cycling Federation was being shown round the cycle lanes earlier this week. A member of the delegation remarked that the provision was "magnifique".
Well, I would certainly support that proposal!
Mais oui
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