JPH (Jersey Property Holdings) had been working on a scheme to buy Lime Grove, the empty office block on the Green Stree/Tunnel roundabout, for use as the much-needed replacement police station. A blue light station for all services would then be built near the existing Rouge Bouillon site, and the land freed up would then be available for housing. That is my understanding.
Suddenly the Treasury took over, ordered JPH to play no further part in the deal-making, “secured” a deal at £500,000 less, and then watched as the “deal” evaporated and a Finance house took the site. Here is the reaction of the head of JPH, David Flowers, when answering the “wrap-up question” from the panel chairman:
“Senator S.C. Ferguson:
I am glad you can read it. Is there anything else you would like to say, Mr. Flowers?
Mr. D. Flowers:
Probably lots, but everybody has been here a long time. I would like to say that the failure to acquire this building is a major disappointment to the officers in Property Holdings and to the police service and I believe that people generally come to work trying to do a good job and I have a positive opinion of my staff and I try to support them. I do not see that being reflected elsewhere in the States. I do not believe that support has been given.”
source: Corporate Services Scrutiny Panel, Lime Grove House: Failure to Complete Transaction Sub Panel, hearing with David Flowers, on Friday, 9th September.
John le Fondre was fired as Property Minister by Treasury Minister Ozouf and replaced with John Refault, mid-way through this sorry tale. His “letter from the inside” was printed by the JEP and is reproduced below. Note that this letter was not selected for JEP Online !
Letter from Deputy John Le Fondre regarding Philip Ozouf (Treasury Minister) and Lime Grove
FOLLOWING the Scrutiny report on the failure by the States to acquire Lime Grove, I note that the panel has issued a further communication in which it is stated: ‘The balance of the evidence appears to support the position of Jersey Property Holdings (JPH)’ and therefore not that of the Treasury Minister and: ‘We have also been left with questions as to the conduct of States business, the management and treatment of employees and the conduct of the Treasury Minister and his team.’
The most significant outcome of this review has been the referral of this matter to the Comptroller and Auditor General. I believe that this is unprecedented, certainly in my time in the States. If the panel’s concerns are substantiated the consequences will be extremely serious. Whereas the Scrutiny panel is made up of politicians, the Comptroller is a totally independent authority and his views cannot be accused of political bias. Thus while this may not have been particularly well communicated, the referral would seem to be an appropriate course of action.
It is important that readers consider the reasons why the deal failed, the consequences for the failure, and how this has all been handled. Is the way that decisions appear to be have been made symptomatic of good and efficient government? The report highlights a number of questions that remain unanswered including, was it acceptable for individuals with limited experience of property matters to take over the purchase of Lime Grove and is it acceptable to base decisions on advice from shadow advisers rather than property professionals? The further examination of these and other questions is essential, and depending upon the outcome, could lead to potentially serious consequences.
What is fact is that the Treasury Minister and the acting CEO took the project away from the professionals at Property Holdings last November, and the deal eventually failed in July/August this year, eight to nine months later. The minister himself has stated that he is not a property expert. Yet he publicly challenged the two externally produced professional valuations, and described the basis on which they were prepared as `not appropriate’ for this property.
Equally, the minister has stated that the business case submitted by JPH was not capable of being signed, yet the external independent professional who reviewed the business case has stated on record that the business case was very robust.
The minister compromised the original deal in pursuit of reducing the price by £500,000 against advice. The logic of that approach should be weighed up against the fact that each resulting month of delay appears to be costing £90,000 to £100,000 in lost savings. Did the minister take appropriate professional advice to arrive at his decision? Or was he listening to a shadow adviser’? If the latter turns out to be true, is this the type of decision making appropriate for a minister?
To clarify one matter, the acting Chief of Police confirmed to me in December 2009 that for operational reasons the preferred option of the police was to be on two sites – to acquire Lime Grove for offices, and to construct an up-to-date `blue light’ police station at Rouge Bouillon.
Given my experience of this project i am surprised at recent suggestions that the south side of Green Street car park might be an option for a single site location, including the ‘blue light’ emergency service and facilities for police custody cells.
The Green Street site was not available for JPH to consider as an option as it was originally earmarked for sale for residential development to provide funding for the eventual reconstruction of Green Street car park. Although this site might be appropriate for an office block, it does appear to be a problematic location for the police ‘blue light’ service. Accessibility to the site even for cars looks difficult and potentially dangerous, and one might question the sense of introducing a new emergency operation into a residential, and congested, area.
The impact of the likely loss of car parking spaces, particularly after the recent closure of parking at Gas Place must also be an issue. However, I am not privy to the present decision making process.
My concern is that there might be an attempt to force through a lower cost sub-optimal solution in a vain attempt to justify the delays that have arisen. In my opinion the most appropriate solution would be to revert to the Plan B option, identified by JPH in 2009, of developing a single building on the Summerland site. While my recollection is that this was more expensive, it is critical to now deliver the best alternative solution for the police, not a politically expedient panacea and in so doing relaunch the annual savings that have been delayed.
To coin a much maligned phrase ‘all in all very messy and totally unsatisfactory’.
I shall await the Comptroller’s review with interest.