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The dry cleaners that was sold for £20,000 |
Sold for £26,000... the shop worth £200,000
FINANCE chiefs have been accused of botching the sale of council-owned properties after a £200,000 shop changed hands for the bargain price of £26,000, the Tribune can reveal.
Stunned shopkeepers are calling for an inquiry after it emerged the dry cleaners in desireable St John Street, Clerkenwell, was sold for £26,809, a fraction of its true value, during last year’s disposal of 222 properties.
Details of the sale emerged after Elizabeth Eldridge, chairwoman of Islington Conservative Future, a group for under-30s Tories, called for caution over plans to sell the former Moorfields School site in Finsbury – approved at a council cabinet meeting last week – with the warning that rushing the procedure could lead to similar mistakes.
Ms Eldridge said an administrative error led to the council selling the dry cleaners for nearly £174,000 less than it was worth. She added: “A number of mistakes were made, including missing a zero off one of the properties. There was a lot of pressure from up above in general. It wasn’t managed very well. It is a scandal and disgrace that Islington residents have not been allowed to tender their own bids. A public auction would be far more fair.”
Ms Eldridge wants the council to be more open in its handling of the Moorfields site sale. “The more secret these property sales are, the more pressure is on officers on the inside,” she said. “I’m bringing this up because I want the system changed, I don’t want the incompetence to continue.”
The news has angered neighbouring shopkeepers and residents, who failed to come up with the money they needed in time to buy their own properties.
When the properties were originally put up for sale, businesses and residents were given the chance to buy but only if they could match the bid offered by Structadene, an Angel-based company run by property developer David Pearl. In all, the council raised £69 million from the sale – £11 million more than expected.
The Town Hall is unable to say if the owner of the dry cleaners was ever told his property – valued at £200,000 – would be allowed to go for just £26,000.
Alex Wright, who has lived above the dry cleaners for 13 years, said: “If I had been given that price, I’d have got my brother to lend me the money. There should be an inquiry into this.”
James Coles, who runs neighbouring shop Dress for Less, interrupted his holiday in Spain to speak to the Tribune. He said: “There should be an investigation. Why wasn’t it offered to the leaseholders at that price? When you’re up against a big company there’s nothing you can do.”
Tony Taiano, 61, owner of Dino’s restaurant and a next-door beauty shop in St John Street, raised the £1.1 million needed to buy the shops but missed the deadline by two hours.
Now, he says his business is suffering from crippling rents and he is planning to sue his bank over the delay. He is furious at the way he has been treated, particularly after learning that the dry cleaners was sold for such a low price.
Mr Taiano said: “It’s absolutely disgusting they sold the dry cleaners for so little.”
Lib Dem finance chief Councillor Andrew Cornwell, who is in charge of property disposals, has refused to discuss how the property came to be sold for just £26,000, and instead referred questions to Lib Dem housing chief Councillor Terry Stacy.
Cllr Stacy said: “The council ran a qualifying process and the occupier failed to qualify at the earliest stage.”
But, Cllr Stacy was unable to say if the occupier had been offered the valuation price of £200,000 or the much lower price Structadene bought the shop for.
He added: “The council got more money than was anticipated for the package. Some of those properties would have come in at more and some at less.”
Labour group deputy leader Councillor Richard Greening said: “It’s certainly unfair. There should be some process for challenging individual bids if someone comes in with a ridiculously low price. We’ve just lost a huge amount of money. I’m angry and frustrated about it but there’s little we can do.”
A council spokesman said: “We noticed during the bid clarification stage in May 2007 the bid was significantly lower than for any other property, so the council queried the price apportionment for 393 St John Street with Structadene, who stood by their overall figure and apportionment.
“The portfolio disposal team regularly updated senior managers in the finance and property department as well as the council’s legal team and members of the council’s executive.”
of mistakes were made, including missing a zero off one of the properties. There was a lot of pressure from up above in general. It wasn’t managed very well. It is a scandal and disgrace that Islington residents have not been allowed to tender their own bids. A public auction would be far more fair.”
Ms Eldridge wants the council to be more open in its handling of the Moorfields site sale. “The more secret these property sales are, the more pressure is on officers on the inside,” she said. “I’m bringing this up because I want the system changed, I don’t want the incompetence to continue.”
The news has angered neighbouring shopkeepers and residents, who failed to come up with the money they needed in time to buy their own properties.
When the properties were originally put up for sale, businesses and residents were given the chance to buy but only if they could match the bid offered by Structadene, an Angel-based company run by property developer David Pearl. In all, the council raised £69million from the sale – £11million more than expected.
The Town Hall is unable to say if the owner of the dry cleaners was ever told his property – valued at £200,000 – would be allowed to go for just £26,000.
Alex Wright, who has lived above the dry cleaners for 13 years, said: “If I had been given that price, I’d have got my brother to lend me the money. There should be an inquiry into this.”
James Coles, who runs neighbouring shop Dress for Less, interrupted his holiday in Spain to speak to the Tribune. He said: “There should be an investigation. Why wasn’t it offered to the leaseholders at that price?”
Tony Taiano, 61, owner of Dino’s restaurant and a next-door beauty shop in St John Street, raised the £1.1 million needed to buy his shops but missed the deadline by two hours.
Now he says his business is suffering from crippling rents and he is planning to sue his bank over the delay. He is furious at the way he has been treated, particularly after learning that the dry cleaners was sold for such a low price.
Mr Taiano said: “It’s absolutely disgusting they sold the dry cleaners for so little.”
Lib Dem finance chief Councillor Andrew Cornwell, who is in charge of property disposals, has refused to discuss how the property came to be sold for just £26,000, and instead referred questions to Lib Dem housing chief Councillor Terry Stacy.
Cllr Stacy said: “The council ran a qualifying process and the occupier failed to qualify at the earliest stage.”
But, Cllr Stacy was unable to say if the occupier had been offered the valuation price of £200,000 or the much lower price Structadene bought the shop for.
He added: “The council got more money than was anticipated for the package. Some of those properties would have come in at more and some at less.”
Labour group deputy leader Councillor Richard Greening said: “There should be some process for challenging individual bids if someone comes in with a ridiculously low price. We’ve just lost a huge amount of money. I’m angry and frustrated about it but there’s little we can do.”
A council spokesman said: “We noticed during the bid clarification stage in May 2007 the bid was significantly lower than for any other property, so the council queried the price apportionment for 393 St John Street with Structadene, who stood by their overall figure and apportionment.
“The portfolio disposal team regularly updated senior managers in the finance and property department as well as the council’s legal team and members of the council’s executive.” |
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