‘The Jersey International Finance Centre as presently constituted is not considered viable and is unlikely to to even fund the cost of the underground car park needed to replace the parking on site, let alone generate the previously step return of £50 million.’
UPDATE: Full report available to read online here.
(** Make sure you have Radio Jersey (online or on 88.8FM) on tomorrow from 8.00am to hear what’s happened and to hear our responses.)
The release today of the long awaited CSSP (Corporate Services Scrutiny Panel) report has triggered a lot of interest. BBC Radio Jersey have asked various figures involved in the report, as well as those who have followed the development since it was first planned, to be on air tomorrow on their breakfast programme.
The report slams the viability of the project and is a damning indictment of the financial viability of the project… and casts serious doubts on whether it can even make a profit. It also quotes parts of the Ernst Young Report which itself casts doubts on the viability of the project.
THE PANEL CONCLUDE:
‘The Panel recommends that an updated viability assessment of Building 4 is required to be undertaken by the Treasury Minister, taking account (as recommended by EY) of the actual tenant (both agreed and proposed), together with due allowance for all known and planned costs of delivery, with immediate effect.’
**SOS Jersey Co-ordinator Dave Cabeldu has been invited to discuss the contamination issues with Planning Minster Steve Luce and will be on after the 8.30 news.
**We understand that CSSP Chairman Deputy John Le Fondre will be on the programme as will former Deputy Sean Power who, with the Waterfront Action Group, arranged the ‘Ring Around the Car Park’ event last June which 3,000 members of the public enthusiastically attended.
SOS Jersey have been involved with the Esplanade project from the very start (even when the site was a beach). We monitored the reclamations and ash dumping, and have for many years worked to safeguard the marine environment (and the public) from the toxins that are currently being excavated.
Unfortunately in this case our warnings were swatted away (notably by the Treasury Minister who incorrectly informed the States that there would be little or no contamination). The reality of the amount of contamination could not be hidden, however.
Since the project started SOS J have received a number of public complaints relating to Planning Breaches on the site and and the dossier is currently with the Planning Department’s Compliance team awaiting a response.
SOS Jersey have a web page which deals with some of the issues surrounding the contamination and it’s here: http://sosjersey.co.uk/esplanade-building-4-breaches-in-pl…/
Some bullet points that can be taken from the report together with excerpts are reproduced below:
~ Low profit warning – Unsupportable profit forecasts:
~ Profit margins below the level at which a normal developer would proceed:
~ Ernst Young report has ‘severe reservations regarding future demand in the medium term’ and EY believe it could generate ‘only a marginal return’.
~ ‘The Jersey International Finance Centre as presently constituted is not considered viable and is unlikely to to even fund the cost of the underground car park needed to replace the parking on site, let alone generate the previously step return of £50 million.”
~ Lack of clarity about site contamination – no provision for contamination costs
~ Additional costs now becoming apparent – the profit figures is before any allowance for costs that need to be written off.
~ ‘The Masterplan will be unachievable’
~ ‘…the parties should seriously review their aspirations for both the JIFC and the Esplanade Quarter as a whole to arrive at a more balanced and commercially viablle mix of uses and public realm improvements…’
~ SoJDC operating in secrecy even from Scrutiny
~ Scrutiny require disclosure by SoJDC to the shareholder representative (Treasury Minister) a full and up to date viability review on Phase 1A… shared with the Panel in full.
Watch this space!