Buying Leale's Yard will 'cost taxpayers more'

The former developers of the Leale's Yard site have said the purchase of the site by the States of Guernsey will lead to the development costing taxpayers more than their plans.

Omnibus director Jeremy Rihoy believes on top of the additional cost, it will now take several years longer than planned to deliver any housing on the site.

Before the site was bought by the States for £4.5mOmnibus planned to build more than 300 new homes at Leale's Yard, if the States bought 90 of them for £34m.

In response, President of Policy and Resources Lindsay de Sausmarez said "value for taxpayers' money was a core focus" of this project.

P&R has proposed making clearing and commencing site development at Leale's Yard one of the States "super priorities" for this political term.

Deputy de Sausmarez previously said she wanted the site cleared by the end of 2026, but admitted it was unlikely there would be new finished homes before 2029.

P&R said "initial planning submissions to improve supporting infrastructure" have been made, while de Sausmarez added that the committee has "seen a healthy level of interest expressed to tender for site clearance and further development of the plans".

Rihoy said the opportunity of a public-private partnership with his firm on this development was "a massive opportunity missed" by the States of Guernsey.

He blamed the civil service for the failure of the deal: "The civil service in Guernsey really doesn't like dealing with the private sector. It's very much in the too difficult box."

"Anywhere else in the world, an opportunity like the Leale's Yard would have been embraced and there would have been a genuine private-public partnership, this project lent itself to that and it was there for the taking."

McHugh criticised the States for outbidding Omnibus to buy the site.

"I don't think the public sector should be competing with the private sector on housing sites.

"We'd made a bid to the Coop of £4m, we were in a non-disclosure agreement with the States and suddenly, without our knowledge, the States bid £4.5m for the site."

He also took aim at the States for allegedly breaking that non-disclosure agreement.

Guernsey's Scrutiny Management Committee confirmed it was investigating the States deal to purchase Leale's Yard, after concerns were raised at a public hearing last year.

The committee's president Deputy Andy Sloan said: "It's interesting to see Leale's Yard as a super priority in the government work plan.

"The scrutiny review of property services is still ongoing and has still to get to the bottom of how the site was purchased without a business case and without any real idea of the scale of financial commitment the States would be taking on."

De Sausmarez said: "My understanding is that the previous P&R exhausted negotiations with Omnibus, who were the development partner of the previous landowner.

"The scheme had moved through several iterations over the years, resulting in an offer that had become materially different to what had originally been proposed. This was compounded by uncertainty on the timeframe."

Rihoy said he was "completely fed up and disenchanted" after working with the States on the project.

While his colleague Omnibus director Charles McHugh said he felt "deflated by the whole thing.

"It wasn't some tyre-kicking casual exercise, we worked hard on this project.

"We brought our bankers into a P&R meeting and confirmed we had £100m of private sector funding and the backing of our bank."

"We were going to have this finished and delivered by the end of 2027. Now we're hearing nobody gets house keys until after 2029 and that's not even certain."

McHugh said he believed it would at least two years after this political term ends in 2029 before people moved into new homes at Leale's Yard.

"All we needed was for the public sector to seriously engage with us, but they just couldn't get past the fact they thought we were going to make too much money." said Rihoy.

Both developers said they were unlikely to work with the States again moving forward and they were not sure there were any local firms that were big enough to deliver a project across the site.

De Sausmarez said: "From my perspective, the States' purchase of Leale's Yard brings real opportunity for regeneration of the whole area.

"As the new landowner, we intend to work with private sector partners to develop Leale's Yard: a project of this size very obviously cannot be delivered simply using existing in-house resource.

"Financial viability, suitable experience and demonstrable competence will be central considerations identifying potential partners."

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