Riveroak - Why not

The report into the suitability of Riveroak to be an indemnity party to facilitate the CPO process has been published today and it doesn't pull any punches over the way Riveroak has managed the whole process.

The history of this whole sordid process goes back to Riveroak being rejected by the Labour administration in December 2014 and little has changed since despite UKIP saying they would get the planes flying again.

3.0 RELEVANT CONSIDERATIONS

3.1 The objective of seeking an indemnity partner is to ensure that if the Council

determines to pursue a CPO a viable airport comes into sustainable long term

operation as quickly as is reasonably possible without any residual cost to the Council.

3.2 A majority interest in the site was acquired by new owners in September 2014. The new owners state they intend to bring forward regeneration proposals for the site. The new owners have a business record that includes the Discovery Park Enterprise Zone.

3.3 The new ownership of the site and any proposals put forward would make it much

more challenging to demonstrate an overwhelming case for compulsory purchase.

This compares to the situation before September 2014 when the then outright owner

had announced no specific proposals following the airport closure. Given the now

increased challenge of securing a CPO, it is essential that the Council establishes

thoroughly on objective grounds the financial status of any prospective partner. The

assessment must have due regard to the potential scale of the project, and the need

to demonstrate that resources are available to complete it.

3.4 Any viable indemnity partner needs to demonstrate the resources to acquire by private treaty well before the stage of seeking a CPO.

3.5 There are numerous local authority examples of stalled developments or developments where the partner proves not to have the financial capacity to complete the agreement. This experience in other local authorities emphasises the need to ensure a prospective indemnity partner has the resources in place to acquire the site and complete the development. Once the land transfers to the indemnity

partner any redress for delay or non completion could prove difficult to pursue. The main purpose of the CPO is for the authority to achieve a viable development, so the status of the indemnity partner to deliver the development in its entirety is highly relevant.

 Of more relevance is this :"The Council does not have the resources to proceed with any CPO and the subsequent development in the event the indemnity partner could not raise investment resources."

All the above are excerpts from the decision to reject RO the 1st time around, so what is different this way round?

"The main material change since the December 2014 Cabinet decision is the provision of an escrow account which will guarantee the funding of the CPO process. This is welcomed and means that the CPO process can be run at no cost to the authority as a whole process rather than the step approach as originally proposed"

However this is about choosing an indemnity partner not about running a CPO process a fact that Riveroak fail to understand. TDC have to ensure everything is in place prior to starting a CPO not start it and hope everything is in place 

However the purpose of the Council using its CPO powers is not to run a CPO process, but to ensure that a viable airport comes into sustainable long term operation as quickly as is reasonably possible without any residual cost to the Council. In order to do that, both the land acquisition and airport development, will need to be funded.

The only evidence to support other funding are two non binding, conditional and redacted letters of support and a similar letter of support from an American company

There is uncertainty about how any shortfall in funding will be met and indeed the offer of a bond at any stage of the CPO process now appears to have been withdrawn by RiverOak.

Officer conclusions 

 There remains the lack of evidence that financial resources are in place or proposed to be in place to acquire the land prior to the confirmation of the CPO despite the fact that the Council is obliged to attempt to purchase the land by negotiation in parallel with the CPO process.

There is insufficient evidence currently available for the Cabinet to be satisfied that a proposed CPO is likely to be successful which would justify its entering into an indemnity agreement. There is good reason to consider the principle of the CPO alongside the decision to enter an indemnity agreement.

Finally the officers and legal advisers stated:

Given the above, your legal advisors and officers are not satisfied at this moment in time that the information or assurances provided to date by RiverOak justify the Council deciding to make a CPO or as part of that process to support the appointment of RiverOak as the Council’s indemnity partner in advance of deciding whether to make a CPO

Well it seems this has provoked the Pro Facebook sites into a frenzy and I will post some of the more lurid comments here. Needless to say they do themselves no favours with the tone of the remarks.

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