‘Let’s see plan B before you get penny of your £84m docks cash’
Artist's impression of the Leith Docks' deleopment
City council chiefs have been ordered to prove that an £84 million plan to trigger development work at Leith Docks remains viable before borrowing a penny.
The council had proposed becoming the first Scottish authority to use a “tax increment financing” (TIF) scheme to fund infrastructure work that would encourage developers to invest in the area.
Under the proposals, £84m would be borrowed to take four separate projects forward and then the loan repayments would be funded through an increase in business rates that would come from firms flocking to the area.
However, Forth Ports has announced it plans to focus development on renewable energy rather than housing, offices and retail – and that has led to concerns that the increase in business rates income, which the whole plan is based on, will not be as significant as first expected.
Now officials have been asked to provide details of a fallback plan before pressing ahead with any of the four projects: an access road, an esplanade outside Ocean Terminal, a new finger pier and “lock gates” that would allow more cruise liners to access the port.
Following a debate in the City Chambers on concerns about the business case for the scheme in light of the new Forth Ports plan, city leader Jenny Dawe said: “We will ask for a further report on the issues raised, in particular the impact that the change in direction has on the finances of the TIF and what the return will be. We do need a piece of work that gets more detail on that.”
There are fears that the council could have to fund the borrowing through its revenue budget if the increases in business rates do not happen.
Councillor Tom Buchanan, the city’s economic development leader, said: “I think it would be useful to get information about what mechanism the council will put in place if we don’t get the uplift we expect from business rates. We need to know any assurance that the director can give that there will be a mechanism to cover for that.”
It emerged last week that the council is expected to formally begin the hunt for a contractor for the first part of the TIF project – building a £16m road to link Constitution Street and Seafield Road – early next year, with work expected to get under way in 2013.
The three other projects are on hold until a masterplan is provided by Forth Ports. A new public esplanade for shops and restaurants had been proposed outside Ocean Terminal, while there were also plans to create lock gates that would allow more ferries and cruise liners to dock in Edinburgh, and a new pier for the Royal Yacht Britannia.
Dave Anderson, director of city development at the council, said full details of the impact on business rates income will not be known until Forth Ports brings forward a new masterplan. But he added: “We are already in discussions with two major renewables companies that have indicated that they want to look at Leith as a new major location and five or six are looking at the east of Scotland.
“We will have to remodel non-domestic rate income relative to that so we will have to go back to the drawing board project-by-project to look at risks relating to non-domestic rate income.”
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Comments
There are 17 comments to this article
Page 1 of 2
Mr Flubbleghast
Thursday, November 10, 2011 at 02:18 PMSo, Dave Anderson wants to re-model non domestic rates, well that should scare away the potential commercial investors, brilliant plan ! Here's a better idea, ban the council from commercial projects altogether and leave it to the experts.
RS here
Wednesday, November 9, 2011 at 10:26 PM8 jams..............Plan A. .....involved the Trams......
RS here
Wednesday, November 9, 2011 at 10:25 PMWhy is the EDINBURGH taxpayer helping Private companies make a profit..............and with NO trams........how will the transport infrastructure cope .....
muppetfinder
Wednesday, November 9, 2011 at 07:36 PMwe had TIE now we have TIF what's next TIG where councillors run around passing the buck to each other.
Leith Heights
Wednesday, November 9, 2011 at 06:51 PMLets not let 'Mad Jenny Dawe' anywhere near this proposal. £84 MILLION........in ECC terms this is £840 million
leithforme
Wednesday, November 9, 2011 at 06:32 PMthe Seafield to Constitution Street 'bypass' is long overdue, but as to worrying about Forth Ports plans to turn a residentialofficeretail area into an industrial one to maximise their short term profits, before moving on and leaving a smoking polluted wasteland (and cutting income they can throwaway on vanity projects as usual), the answer is simple - don't give them planning permsion to do so!
Nome Deplumb
Wednesday, November 9, 2011 at 06:05 PMPLAN B Council please take an ounce of sanity- the borrow of anything before delivery of income is a RISK some mad USA accountancy to rig a case for infrastructure borrowing.Even the accountants know its bonkers-TIF funding -paying tax through revenues which might never be built to pay back-the loan. When the outcome of that risk is unknown would you take it if you knew there was potential unrecognisable benefit, surely NOT- Dear Council -if you want to do a TIF buy the Airport-you know what it does on the TIN...That makes a commercial profit-
judgedredd777
Wednesday, November 9, 2011 at 05:38 PM#9 emc...........continued driving straight and ended up on Seafield Road (you can tell by the smell). How was that then, was Jack Dawe and her cronies from the council holding their meeting at the Edinburgh Sh*t Catcher again. Just so they can Pooooh everything that comes out of their mouths.
emc
Wednesday, November 9, 2011 at 03:51 PMA road that connects Constitution Street and Seafield Road for £16m. Is that not what Baltic Street does already? I used that street yesterday and it seemed to work well. I was on Constitution Street, i turned onto Baltic Street, continued driving straight and ended up on Seafield Road (you can tell by the smell).
Jams
Wednesday, November 9, 2011 at 02:02 PMAsking about plan B implies there is a Plan A. I woudl ask for firm evidence of that one first, unless of course the assumption is that plan A will fail anyway.
searchanddestroy
Wednesday, November 9, 2011 at 01:47 PMLet businessmen concern themselves with business funding. Let the council provide the required services to the existing citizens and the obligations of local government. Leave the pie in the sky expansionism to real people and get the roads fixed and the bins picked up.
edinburgh100
Wednesday, November 9, 2011 at 01:33 PM"the loan repayments would be funded through an increase in business rates that would come from firms flocking to the area." Youve got to laugh when statements like this are made. Tom Buchanan,said: “what mechanism the council will put in place if we don’t get the uplift we expect from business rates. We need to know any assurance that the director can give that there will be a mechanism to cover for that.” simply put borrow more cash. They havent even got over the fiasco of the TRAMS and here they are planning another BAWLS UP.
badboysinc
Wednesday, November 9, 2011 at 01:16 PMDoesn't anyone realise that TIF means we are borrowing from the future, our childrens future? It is not our money to borrow. And to RISK money in this manner is exactly the same as what happened with the Credit Crunch? It beggars belief.
Logie88
Wednesday, November 9, 2011 at 01:15 PMForth Ports have made millions on the back of local taxpayers for years. It's about time someone had a long hard look at them. Why on earth should the local council put money into a cruise liner terminal? Where is the benefit to the public purse? In fact Forth Ports were given permission to bild Ocean Terminal on the basis that the income from that lucrative project would be used to fund a cruise liner terminal. The income was quietly pocketed instead.
Mario Antoinette
Wednesday, November 9, 2011 at 12:58 PMThey're skint. Expect this to ahead ... Never.
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