Silver Hill Statement by Cllr George Beckett Leader of Winchester City Council
Press Release: 14/01/2010
Council meeting 13th January 2010
At the end of last week the Council was informed by the managing director of Thornfield Properties that Thornfield Ventures Ltd (the parent company of Thornfield Properties Plc) has been placed into administration by its bank, HBOS, part of the Lloyds Banking Group. It is now clear that Thornfield Properties Plc is not, itself, in administration at this stage, nor is Thornfield Properties (Winchester) Ltd.
Although the Council’s Development Agreement is contracted with the latter two companies who are not in administration, the effect of the administration of the parent company is that neither is in a position to progress the Silver Hill scheme.
The administrator of Thornfield Ventures, Deloittes, has appointed Hammersons, a leading retail property developer, to advise them on whether they should consider pursuing any of the Thornfield portfolio of projects, including Silver Hill.
The Council’s property consultant, Drivers Jonas, has been in touch with Hammersons but it is not possible at this stage to say how long it will take for them to review the Thornfield portfolio and make any recommendations.
In the meantime the Development Agreement and agreement to lease Upper Brook Street remain in place because they have not, at this point, been materially breached. We await formal contact from the administrator. The Council is keeping the position under review with its lawyers Berwin Leighton Paisner.
The Council has no substantial sums of money directly at stake as a result of the administration or delay. At present the amount of fees which have been recently incurred but not reimbursed by Thornfield is believed to be of the order of £20,000. It should be added that most of these are not invoiced as yet and they will be presented to Thornfield Properties in the first instance in the expectation that they will be settled.
Work on the CPO will, of course, not progress for the time being and no further costs will be incurred. The Council will, however, now have additional costs in relation to negotiations with the administrator, Hammersons and others as required which will require the expertise of its external lawyers and property advisors. These will be kept to a minimum.
Although this is all extremely unwelcome news I want to stress two things. Firstly, there was nothing that the Council could have done differently that would have made a difference to this situation. Thornfield has run into problems in the same way that many property companies have run into problems, in particular with the major upheaval in the banking sector. This risk was always clearly identified, as was the fact that we could not isolate ourselves from it
Secondly, and most importantly, this does not mean that regeneration of the area cannot or will not happen. We all agree the Silver Hill area is the least attractive part of the town centre and represents an area with the huge potential to contribute to improving our retail offer, providing town centre housing and creating improved infrastructure. But this is in the context of Winchester as a whole – which is a great success story and which people will be willing to invest in. So we will not abandon the vision of Silver Hill, we will seek to bring it forward either with a new partner or in a new way or both. What Winchester needs is for people to talk up our prospects, be positive about the future and not let our vision fade.