west*wales*news*review

West Wales News Review — analysis with a sustainability slant

Archive for the tag “Llanelli”

Councillors back flats plan for disused Llanelli church

See the Carmarthenshire Herald, August 19 2016, p.15. The yawning gap between conservation regulations and resources for conservation means that historic buildings can be left to fall down because the owners cannot afford to renovate them according to conservation rules. This conflict was aired by Carmarthenshire’s planning committee last week.

The issue has featured in this blog before — see https://westwalesnewsreview.wordpress.com/2015/08/18/poisoned-chalice-of-owning-a-historic-building/

Councillors rejected planning officers’ advice on Thursday (August 18) and approved a plan to construct nine flats in the disused All Saints Church, Goring Road, Llanelli.

The church, built in 1872 for £4,800, around three times more than the typical Victorian church of the time, is a listed building with stained glass windows, much interior ornamentation and a protected monument in the churchyard. The building closed in 2011.

Planning officer John Thomas told members of Carmarthenshire County Council’s planning committee that the church had been marketed for a number of years, with very little interest shown by potential buyers. The application would not alter the external appearance of the church, but he recommended refusal for several reasons including advice from the council’s Conservation Officer, and objections from the Victorian Society and the Ancient Monuments Society.

Councillors, though, feared that the alternative would be for the church to stand empty until it became so dilapidated that it would have to be demolished.

xxxxx

All Saints Church, Llanelli: dilemma of listing without financial backing. Photo from Wikipedia

Cllr John Jenkins (Ind, Elli) pleaded “don’t leave us with another large derelict church in Llanelli town centre”. Cllrs Terry Davies (Lab, Gorslas) and Peter Cooper (Lab, Saron) thought there was a high risk of the building being left to fall down. Conservation specialists are “so narrow-minded they don’t move at all”, said Cllr Davies, worried that conservation zeal without financial resources resulted in disused buildings remaining disused.

No committee member voted against giving permission to the applicant, P W Jones Contractors of Pear Tree House, 3 Harris Lane, Llanelli. Five abstained, and the majority voted for P W Jones’s proposal.

The application will now be referred to CADW, the Welsh Government’s historic environment service, because the committee rejected planning officers’ advice.

PDR

Advertisements

Loss-Making Private Hospital Link to Llanelli’s Planned Wellness Centre

Carmarthenshire enters exclusive agreement with Kent Neurosciences

A chain of companies and directors link the proposed Wellness Centre in Llanelli to a private hospital in Maidstone and to the tax haven of the British Virgin Islands.

The chain includes Kent Neurosciences Ltd, potentially a partner for Carmarthenshire County Council in the Wellness Centre planned for Delta Lakes.

The council’s Executive Board unanimously resolved, on May 23rd, to enter into an exclusivity agreement with Kent Neurosciences Ltd “with a view to ensuring the aspirations of the Wellness and Science Village within Carmarthenshire”.

Kent Neurosciences Ltd is one of a clutch of companies with various directors in common, now or in the recent past. Kent Neurosciences Property Ltd, KIMS Hospital Ltd, KIMS Property Co Ltd, and KIMS Property Holdings Ltd, have been variously concerned with the development, construction and operation of a private hospital in Maidstone, Kent – the KIMS Hospital, KIMS standing for Kent Institute of Medicine and Surgery.

KIMS Property Company Ltd owns the hospital, which is leased to and operated by KIMS Hospital Ltd. KIMS Property Holdings Ltd is the parent company of KIMS Property Company Ltd, and the ultimate parent of KIMS Property Holdings Ltd is Mercury Management Enterprises Corp, a company registered in the tax haven territory of the British Virgin Islands.

Here we enter the world of the leaked Panama Papers, which show that Mercury Management Enterprises Corp is a shareholder of Petrel Investing Ltd, also in the British Virgin Islands, and Petrel is a shareholder of Mercury. Petrel Investing has connections with other offshore companies – OMNI Capital Assets Ltd, OMNI Management Consultancy FZE, ONTARIO Inc, Sarama Beta Ltd – and an individual, Alexander Timofeev of Toronto, Canada, in linkages that are visible to the public only because of data breaches.

Private hospital required £20 million refinancing deal

The private hospital, which opened in 2014, has been struggling. Original estimates of income from the NHS and self-paying patients were over-optimistic. The initial management team – Franz Dickmann and James Dickmann, solicitor Steven Bernstein, and chief executive Jayne Cassidy – departed from the hospital operating company and new personnel took over. In March 2016 the Kent Messenger newspaper reported[i] that in its first-year, to April 2015, the hospital’s losses were over £15.2 million, nearly twice as great as the revenues, and so a refinancing was urgently sought from its major investors, Realta Investments Ireland Ltd and Regional Healthcare Ltd. Realta Investments Ireland had negative net worth of nearly €5 million in 2014. Regional Healthcare Ltd in the UK was dissolved in April 2015 (but a Cyprus company of the same name remains active).

The hospital refinancing, worth around £20 million in total, included a rent holiday until April 2019, so the intended rent recipient, KIMS Property Company Ltd, will itself have a big income hole to try and fill.

KIMS hospital pioneer Franz Dickmann, and Phyllis Holt (who is also consultant cardiologist Dr Phyllis Holt Dickmann) are the major shareholders in Kent Neurosciences Ltd, according to Companies House on June 1st, with 8,535 and 9,040 shares respectively. Consultant neurologist Dr Mun Seng (Sam) Chong and ASB Law each owned 2,500 shares, and Richard Gullan, consultant neurosurgeon, and Alan Day, retired professor, owned 1,000 apiece.  ASB Law, a legal firm operating in Sussex and Kent, is the company secretary, and Dr Sam Chong, Richard Gullan and Alan Day are all current directors of Kent Neurosciences Ltd.

Head of Swansea’s Business School was on board of Kent Neurosciences

Why should Kent Neurosciences be interested in a start-up venture in Llanelli? There is a link in the accomplished person of Professor Marc Clement, Head of the Business School at Swansea University’s School of Management. Llanelli-born Professor Clement was a director of Kent Neurosciences between December 16th 2014 and August 21st 2015.

Currently Professor Clement, holder of patents relating to medical devices, is a director of nine companies, including four based at Technium 2 in Swansea – Cyden Ltd, Ipulse Direct Ltd, Ipulse Ltd, and MC500 Ltd, concerned with the supply of medical and dental instruments. The other five companies are Life Sciences Hub Wales Ltd, Arthurian Life Sciences Ltd, Swansea Innovations Ltd, WWII Ltd and Calon Cardio-Technology Ltd.

Swansea University is part of ARCH – A Regional Collaboration for Health – alongside Hywel Dda University Health Board and Abertawe Bro Morgannwg University Health Board. ARCH is behind the plan for a Wellness Centre at Llanelli, a venture for which Carmarthenshire County Council would provide the land. The ball-park cost of the project is £60 million, money which has to be raised. Abertawe Bro Morgannwg (ABM) University Health Board reckoned, in a press release dated December 2nd 2015, that “funding could come from the EU but also from private investment and match funding in various forms”.

The Wellness Centre would probably include a new leisure centre, a “wellness education centre”, hub for out-of-hours GP services and various therapies, a hotel and conference centre, and a Hywel Dda branch of Swansea University’s Institute of Life Science, which is based in the College of Medicine. The Institute of Life Science is a partnership between the university, the Welsh Government and ABM University Health Board.

ARCH itself “breaks free from an outdated healthcare system designed over 50 years ago and replaces it with an accessible one specifically planned for today’s needs”, according to ABM University Health Board’s December press release.

The practical benefits for the people of Carmarthenshire are not yet clear.

Echoes of Technium?

A millennial plan for entrepreneurship centres – called Techniums — throughout Wales did not live up to the original aspirations. Wales used to have 10 Technium centres, modelled upon the first, which was set up by the now-defunct Welsh Development Agency (WDA) and by Swansea University in 2001. They were small science parks, intended to foster local innovation and entrepreneurship in a programme which cost around £111 million, but the majority were not a success and in November 2010 the Welsh Government decided to close six of them, including one for performance engineering based in Llanelli, which Carmarthenshire County Council took over and renamed the Beacon Centre. It is now a conference and meeting centre.

Four Techniums remained, two in Swansea, including Technium 2 (the address for four of the companies on which Professor Clement sits as a director), and one each in St Asaph and Cwmbran.

An evaluation by property consultants DTZ indicated that each job created under the Technium programme cost, on average, £190,000 from public funds.[ii]

The inspiration for the Technium project came from a small group of people including Swansea’s Professor Clement and Professor Ken Board, and the WDA’s Gareth Hall (who was the Agency’s final chief executive, between 2004 and closure in 2006).

Professor Clement’s own role in higher education finance expanded in 2007, when he became pro vice chancellor – the chief executive — of the University of Wales, which at the time represented nine higher education centres in Wales. The University of Wales was raking in £ millions from accrediting degrees overseas, in a much-criticised programme which prompted half a dozen leading vice-chancellors to call for the University of Wales to be abolished. In 2011 the University of Wales was subsumed within the colleges of Saint David, Lampeter, and Trinity, Carmarthen, and Swansea Metropolitan University, in a sort of reverse takeover. Professor Clement returned to Swansea University, to be Executive Chair in the Institute of Life Science.

Now, his jobs include board membership of the ARCH programme.

The concept of a medical research centre in Llanelli, raising the profile of Wales as a country of scientific excellence and innovation, has a definite allure. Even so, and allowing for  Professor Clement’s recent involvement with Kent Neurosciences, is this company – full of medical expertise but light on proven business success in the ‘wellness’ arena – the most appropriate partner for Carmarthenshire County Council in the Wellness Centre project?

And, perish the thought, could the Wellness Centre be a conduit for public money to flow through networks of companies into far-away entities registered in the British Virgin Islands and other tax havens?

 

PDR

 

 

 

 

 

 

 

 

[i] ‘KIMS Hospital in Maidstone sought £20m hand-out after making huge loss’. by Chris Price, March 11th 2016.

[ii] ‘What we can learn from £100m and 10 years wasted on the Technium programme’ by Dylan Jones-Evans, Wales Online, June 1st 2013.

Stadium Casts Long Shadow Over Scarlets’ Financial Outlook

With a lot of support from deep-pocketed directors, the Scarlets rugby region soldiers on. The accounts for Scarlets Regional Ltd to June 30th 2015, signed off in March 2016, reveal a net loss of £987,615 — nearly £1 million — and net liabilities of £4.543 million.

The Scarlets, currently fifth in the Guinness Pro 12 league of Irish, Welsh, Scottish and Italian clubs, is the best-performing Welsh club of the season, only two points behind fourth-placed Ulster, and the players and coaching staff have worked heroically to keep the squad at the pinnacle of Welsh rugby, but the stadium is, like gravity, continually pulling them back down the mountain.

The Parc y Scarlets stadium at Llanelli’s Pemberton Retail Park, seating 14,870 people, is valued in the accounts at just on £9.621 million. The auditors, Broomfield & Alexander, point out that: “The trading conditions referred to above [in their report], along with the other matters explained in the accounting policies to the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about the carrying value of the stadium. Were these key assumptions to which the accounting policies refer not realised, the result would be a requirement to reduce the carrying value of the stadium.”

The average gate in 2014-15, according to the chairman, Welsh Whisky Company’s Nigel Short, was 7,000. That’s less than half capacity, and less than 2012-13’s average of over 8,000, but not bad at all considering that the whole population of Llanelli town and the surrounding urban area is only around 45,000.

This begs the question: why was such a large, expensive stadium constructed, when filling even half of it with local paying customers would require one in six of the urban population – from babes in arms to centenarians – to buy tickets? The business plan was just too rose-tinted. And would anyone else be willing to pay £9.621 million for the stadium, on land which the Scarlets do not own?

The debts exceed even the optimistic £9.621 million valuation of the stadium. Scarlets Regional Ltd’s debts, repayable after more than a year, rose to £12.194 million from £12.037 million the previous year.

The crunch year will be 2023, when £2.614 million should be repaid to Carmarthenshire County Council (which also provided the land for the stadium, at a nominal rent for 150 years, and allowed the club to sell part of the site to pub chain Marstons for £850,000 and to keep all but £200,000 of it).

It’s hard to see where the money to repay the county council is to come from. Scarlets Regional’s turnover did rise almost 13% in 2014-15, to £8.977 million from £7.953 million the year before, and the loss for the year almost halved from £1.746 million to £987,615 – but it was still a loss, and to repay its debts in the crucial year, 2023, the company has either to generate profits exceeding £1.5 million for each year between 2016 and 2023, or raise the money on assets, essentially the stadium.

In January 2016, before the latest Scarlets Regional accounts were released, its formerly dormant subsidiary Llanelli RFC Ltd suddenly increased the director count from one, Huw Dewi Evans (to whom Scarlets Regional owes over £2.179 million) to six, four of whom – Huw Dewi Evans, Phillip John Morgan, Jonathan David Daniels and Richard Meurig Griffiths – are also directors of the parent company. The flurry of new directors suggests that a revitalised role for Llanelli RFC Ltd may be in the offing.

While Mr Evans has more money outstanding to Scarlets Regional than any other director, according to the 2014-15 accounts, Mr Timothy Philip Griffiths, chief executive of the Jersey-registered Cpaush Ltd and of 17 other companies in addition to Scarlets Regional, is owed nearly £1.003 million, Mr Granville Harold Wise £1.491 million, and real estate company Nednil Ltd, £2.117 million. Nednil’s chief executive Philip James Davies is also on the Scarlets Regional board. Three more directors have smaller loans to the company, ranging from £40,000 to £420,000.

XXXXX

The Trostre steelworks,  put on the market by dumping-damaged Tata Steel Europe, are over the road from the Scarlets’ stadium. Trostre’s uncertain future is casting a shadow over the stadium — and over the whole of Llanelli.

Tata Steel Europe’s Trostre steelworks, close by the Scarlets’ home at Pemberton Retail Park, could well play a role in the future of this story. Tata has put its UK steel operations onto the dumping-deluged market, and the approximately 650 jobs at Trostre, home of tinplated steel, are by no means safe. If Trostre went, the economic impact on Llanelli would be horrible, and Scarlets Regional would not be able to escape the hurt.

Of course, the steel crisis might moderate, but even if Llanelli escapes an economic mauling, the Scarlets’ own stretched finances cast a long shadow over the club’s prospects.

 

 

 

 

‘Wellness Centre’ to Worsen Financial Starvation?

Part 1

Talk of a £60 million ‘Wellness Centre’ in Llanelli is not unalloyed good news because such a major complex would bring with it major running costs – when public authorities of all kinds are having to axe services because they have no money.

Cllr Meryl Gravell (Independent, Trimsaran),  Carmarthenshire County Council’s board member in charge of regeneration and leisure, spoke in quite rapturous terms in praise of this flagship/iconic project during Wednesday’s council meeting.

The Wellness Centre would be linked to ARCH, ‘A Regional Collaboration for Health’ between the health boards Abertawe Bro Morgannwg and Hywel Dda, and Swansea University. The £600 million ARCH plans include expansion of services at Morriston and Singleton hospitals, a medical science park at Swansea University, and the Wales Centre for Rural Health on sites across the Hywel Dda area of Carmarthenshire, Ceredigion and Pembrokeshire.

The Wellness Centre would be funded with the help of grants from the European Union, and built in the Llanelli area, possibly the Old Castle Works ex-tinplate factory site, which Carmarthenshire County Council bought in 2005 intending to build a leisure village for which funding never materialised, or at the Delta Lakes industrial park.

The Wellness Centre would incorporate a replacement for Llanelli’s leisure centre, and probably a day centre, health and social services and occupational therapy. The town’s existing leisure centre in Park Crescent, which had expensive repairs last year after storm damage, appears more conveniently sited for townspeople, though.

But of course everyone visiting a Wellness Centre for occupational therapy, or to see their social worker, would both own a car and be able to drive it, wouldn’t they? Well, no – there would be big public transport implications. Centralisation of services shifts transport costs (and time) onto the ‘clients’ or ‘customers’, often to the detriment of their ‘wellness’.

And what happens when the council’s share of the running costs starts to appear in the accounts? The portents are not good, as if there is no interest from the private sector, projects which turn the revenue accounts red are either closed or passed to community councils or voluntary groups, for them to contemplate the gaps between expenditure and income. Currently Carmarthenshire is trying to offload 96 parks and playgrounds, and this week confirmed a decision not to prioritise saving the meals on wheels service (now costing £3.70 a time). A hot meal delivered to the door, and a local park in which to take the air, both contribute to ‘wellness’. If the county council can’t guarantee these basic services, what chance is there of contributing to keep a Wellness Centre, somewhere outside Llanelli, operating as comprehensively as its founders would wish?

Grants for the capital costs of new projects can turn into fool’s gold if there are scant prospects of the projects operating at a profit, and there are insufficient subsidies towards the running costs.

Despite our ageing population, Carmarthenshire County Council plans to cut spending on social care, health, housing and leisure by a net 6.4%, £5.8 million, between 2015-16 and 2017-18, which can hardly be done without also cutting ‘wellness’. A huge cut in home care services run directly by the council will reduce net expenditure from £5.568 million this year to £530,000 in 2017-18. The work will go to the private sector, who will get £3.561 million-worth of extra work – but this still means an overall budget cut of almost £1.5 million.  How this will assist ‘wellness’ is, as yet, a mystery.

More coming in Part 2  

PDR

East Gate Subsidies to Help Generate Profits for Standard Life

East Gate, the leisure/retail/commercial development in Llanelli in which Carmarthenshire County Council was a partner with Henry Davidson Developments, has been sold to Ignis UK Property Fund for £14 million.

The county council’s share of the proceeds is £0, zero.

Press officer Ron Cant explained that the council’s aim had been to secure the redevelopment of the run-down site, a search that had taken years until Henry Davidson came along, ready to be persuaded to take on the £15 million project.

Final planning approval was given in February 2011, and work was quickly under way. Jonathan Fearn, the council’s head of corporate property, was quoted in the Llanelli Star[i] as saying that, by November 2012, financial support by the council for the scheme amounted to £3.4 million.

Ongoing commitments include rent of £100,000 a year for the car park, and rent currently £250,000 a year, for the 20-year agreement to take the 1,989 square metres of office space in the Landmark Building, which works out at nearly £126 a square metre.

This is a big premium over typical Swansea Bay rents for modern offices. Examples today include £91.51 a square metre for 371 square metres in Dafen, £91.62 per square metre for 461 square metres in Swansea, and £98.44 a square metre for 64 square metres in Gorseinon. The council is now advertising to sub-let the office space at £12.50 a square foot, which is £134.55 a square metre, an even greater premium above the typical local rate.

Apparently the council committed to renting the offices, large enough for about 200 staff, to ensure that the development went ahead, and that Llanelli would become another hub for international brand names like Costa Coffee, Nando’s and Odeon. The Scarlets rugby region is there too, with a shop and café, the fitting of which was paid for, indirectly, by the people of Carmarthenshire. Henry Davidson Developments lent the Scarlets £280,000 for the fitting out of the premises, and the loan was repaid with £280,000 from the £850,000 proceeds of selling part of the Scarlets’ car park to the pub chain Marstons. The proceeds should have been shared between the county council – the landowner – and the Scarlets, but after the Scarlets claimed for the costs of fees and expenses, including the repayment of the £280,000 for kitting out a shop nowhere near the stadium in Trostre, the council received only £200,000.[ii] In the end, the argument that East Gate needed the Scarlets’ shop to increase footfall, and thus to help attract tenants to vacant units, was given greater weight than the fairness argument for an equal distribution of the land sale price.

Scarlets Regional Ltd, which already owed £2.616 million to the county council, has not yet filed accounts for 2012-13, and is late doing so. The accounts should have been filed by March 31st 2014, which was a month after the company’s auditor resigned on February 27th 2014.

Meanwhile, Ignis UK Property Fund, proud new owner of East Gate, is itself part of a change of ownership. Ignis UK Property is part of Ignis Asset Management, which has been owned ultimately by Jersey-based Phoenix Group Holdings. In a deal in March 2014, Phoenix agreed to sell Ignis Asset Management for £390 million to Standard Life Investments, part of Edinburgh-based Standard Life plc.

Profits from the East Gate development should in future go to shareholders in Standard Life. They will not flow to the people of Carmarthenshire. As in the asymmetrical Scarlets arrangement, the council, representing the residents, is subsidising the private sector — but there is no matching requirement for a share of profits to be returned to the community.

 Pat Dodd Racher

[i] ‘Council defends £5m office rental decision’, by Alana Lewis, www.llanellistar.co.uk, November 28th 2012.

[ii] ‘Call for investigation into £850,000 land deal between Scarlets rugby region and Carmarthenshire council’, by Martin Shipton, Western Mail, April 23rd 2014.

BIG bad news?

by Pat Dodd Racher

Here in Carmarthenshire, sports clubs await huge rises in fees to use county-council owned venues, after the said council has given at least £160,000 and perhaps £200,000 to Clays Golf of Wrexham, the firm which has walked away from Garnant Golf Club, just as the BIG subsidies from the council were coming to an end.

As for the one-way money pipeline between the county council and the Scarlets rugby team, it is hard to see how this arrangement can have a happy ending. The whole Llanelli Scarlets debacle seems to illustrate the hazards of relying on BIG ‘prestige’ projects to provide regeneration.  Instead, they tend to provide years of bills to be paid by the hapless public. Llanelli is saddled with an unwise housing development at the Scarlets’ old stadium, Stradey Park, which threatens to increase the flood risk for the existing homes and other buildings nearby, while the new Parc y Scarlets is unaffordable for a club with an average gate of about 8,000 – usually less, but the average is boosted by higher gates for the most important matches. In addition, the adjoining retail park with its free parking has removed trade from the centre of town, which is replete with businesses signalling hard times – pay-day loans, pawnbroking, charity shops.

The county council’s munificent support for the Scarlets since 2008 is in the order of £20 million. A BBC news story, ‘Llanelli Scarlets £20m aid by council concerns raised’, by Steffan Powell and published on December 17th 2013, points out that the council provided £18.3m of the £25.4m cost of the new stadium, which seats almost 15,000 people – nearly double the average gate. The council retained the freehold of the land – on which the Scarlets have a 150-year lease — but unlike local sports clubs there is no charge to the team for using it. The team would pay only in a rose-tinted future of bounteous profitability. And then, as another example of  generosity, we have the sale of the council-owned overspill car park there for £850,000 – some £600,000 of which found its way into the Scarlets’ sparse coffers, instead of helping Carmarthenshire to avoid alarming cuts in public services.

Eastgate, Llanelli, and another strange deal. The council is renting offices in the (to my eyes) unlovely development, paying £250,000 a year for 20 years – but the offices are not required! It is a case of shifting staff from elsewhere, and facing the issue of what to do with vacant offices. Knock them down, perhaps, like the plan for Llandovery’s well-maintained and locally valued comprehensive school?  The council wants to build houses on the school site, while 11 to 18-year-olds from the town and its hinterland will face a daily trek to the other side of Llandeilo, where a ‘super school’ – the seduction of BIG, again – is to be constructed by the river Tywi. Flooding? Not in the council’s vocabulary.

I could go on about the phoney attractions of BIG, but no one in the county council is listening. BIG means kudos (until it all goes wrong), and often it means BIG MONEY too.

But  I don’t think there are any matching BIG benefits for residents.

Officegate at East Gate: liabilities loom in Llanelli

Ah, the prestigious East Gate development in Llanelli, the £26-million regeneration ‘quarter’ with cinema, restaurants, shops, hotel – and loads of office space. How come there isn’t a queue of eager applicants for the 21,000 square feet – 1,989 square metres — of office accommodation?

Carmarthenshire County Council is masterminding the £60 million redevelopment of Llanelli, of which East Gate is a key part. Council chief executive Mark James was soothingly emollient at the council meeting on November 7th. He did not actually answer a question from Councillor Sian Caiach about the rental income likely to come from an interested business, should it sign a deal for the offices, but referred instead to “lots of exciting private-sector interest in Llanelli”. Councillors cannot ask follow-up questions, I was told by my learned neighbour in the public gallery. This means that a councillor who is fobbed-off with an uninformative answer just has to accept it.

East Gate has been developed by Henry Davidson Developments Ltd, a subsidiary of Development Securities plc, with the aid of £15 million in funding from Banco Santander. National names Odeon cinema and Travelodge hotel have signed up, and so have Carmarthenshire County Council. Development Securities’ website says that the office space was pre-let to the council. The website of builders Britannia Construction says that the office space has been built for the council. We know that the council is committed to paying Henry Davidson Developments about £250,000 a year for this space — for 20 years.

Now, Carmarthenshire will soon be awash with unwanted council-owned buildings, if the comprehensive schools in Llandovery and Llandeilo are closed, as planned. Director of Education Robert Sully bemoaned the flat property market when speaking at the September meeting of the education and children scrutiny committee. According to the minutes, he said that a vacant school site had recently sold at a very low value.

The main workplace for council staff in Llanelli is the five-storey Ty Elwyn, which is exactly 30 years old. It needs refurbishment costing over £1 million, the council says – but then what? Will the council tax department and the others based in Ty Elwyn move across to East Gate, or will outlying offices close so that East Gate is fully occupied? The office space is sufficient for about 200 people, and the rent to Henry Davidson will be some £1,250 a year for each of them.

The ultimate beneficiaries will be the main shareholders in Henry Davidson’s parent, Development Securities, and they are the huge US asset management firm BlackRock Inc, owner of 17.3% of the equity as of November 7th; Prudential plc, with 8.92%; and F&C Asset Management plc with 6.04%. Three more asset management companies each own over 5%.

It doesn’t sound a top notch deal for the people of Carmarthenshire, left to pick up the bill for offices that may be comfortable but which are not actually needed. Indeed, if council staff are moved out of local offices just so that East Gate will be occupied, more travel is very likely to result, with more fuel use, more emissions, and a continuation of the worrying centralisation of services, far away from our villages and small towns.

The official view seems to be that shipping council staff into Llanelli will be wonderful for the town, because they will be “footfall”, spending money in the shops, restaurants and of course the cinema. Yet if they are spending in Llanelli, they are not spending in the neighbourhoods around their old workplaces, which would be at high risk of descending down the spiral of decline.

Carmarthenshire seems keen to offload the East Gate offices, which are being marketed by estate agents Knight Frank for an annual rent of £12.50 a square foot, £132 a square metre. If  they remain unlet, and council staff have to occupy them, alterations will be needed to the open-plan space, costing more money.  If — if — the council can find one or more tenants, would the rental income match the amounts that Carmarthenshire is contracted to pay to Henry Davidson? That’s doubtful, because £132 a square metre is a lot in West Wales!

The grand Llanelli schemes, for a theatre and the refurbishment of Llanelly House and the library, as well as East Gate, have drawn in funding from the Welsh Assembly Government (about 20% of the £60-plus million), the European Rural Development Fund (18%), as well as smaller amounts from other sources. Carmarthenshire’s own share of the costs appears similar to the Welsh Assembly Government’s. Henry Davidson has an even bigger role as the provider of East Gate.

The news that one of the East Gate restaurants is to be a branch of Greene King’s budget chain Hungry Horse is a pointer to the future ambiance of this costly development. There’s the chicken chain Nando’s too, and a Scarlets restaurant (indirectly backed by the county council). Overall it’s not very upmarket, geared more to the cash-strapped than to high rollers.

Given the neglected air of much of Llanelli’s faded town centre, wouldn’t it have made more sense to concentrate the investment there, rather than in a new build of dubious utility? There’ll be a long time to ponder, as we pay for it.

A Council, a Rugby Club, and a Scary Debt

The Scarlets rugby club owed £2.496 million to Carmarthenshire County Council at March 31st 2012, £72,000 more than a year previously, according to the council’s accounts.

This loan debt prompted the questions:

  • How healthy are the finances of Scarlets Regional Ltd, formerly Llanelli Rugby Football Club Ltd, the famous rugby union club in the former industrial powerhouse of Llanelli; and
  • How much more money, over and above the loan, has the council pumped into the club ?

Scarlets Regional Ltd’s figures for the year to June 30th 2011 are in the public arena, and show that the turnover of £7.591 million was not enough to cover the combined £5.807 million costs of sales and the wages bill, for 125 employees, of £5.807 million. Despite the pre-tax loss of £1.819 million, the directors received a total of £117,694. There were 11 of them, so the payments work out at an average of under £11,000 each – quite restrained in the context of bankers’ bonuses, but should they be taking anything at all out of the club?

Total liabilities added up to £13.497 million, which was better that 2009-10’s £17.395 million and the preceding year’s £15.577 million, but still short of covering the total assets of £11.551 million. The gearing ratio — the ratio of debt to equity — was a scary -477.6% and worse than in the previous two years. The figure is negative because in fact there was no equity: the company’s net worth was also a minus, a negative £1.946 million.

There is a sizeable risk that the only way to repay the debts would be to incur even more debt in a major refinancing, if backers could be found, or to sell the stadium and the club’s other assets, which would be Goodbye Scarlets. A middle way could be a combination of refinancing and cost slashing, including players’ wages — but would the club then be able to retain enough top players to keep it in the top flight?

Carmarthenshire County Council, which has invested heavily in the Scarlets, claims that the millions paid in on behalf of the county’s residents is money well spent. Council chief executive Mark James told walesonline.co.uk[1] that the authority “invested £10.2 million in the development [of the club’s new stadium at Parc y Scarlets, Parc Pemberton, Llanelli] along with £5.6 million Section 106 legal agreement money from the sale of Stradey Park for development. The council also gave the club a £2.4 million loan on top of that.” That makes £18.2 million. In fact £18.3 million, because the £2.4 million loan had grown to £2.496 million by March 2012, as noted at the top of this post.

A Section 106 agreement covers monies paid by developers, in this case the developers of the Scarlets’ old ground at Stradey Park, to the local authority.

Carmarthenshire County Council’s officers, it seems to me as an outside observer, sometimes show a tendency to reject policy criticisms with counter-attacks directed at the objectors personally, apparently with the aim of belittling them and thus implying that any views they hold are not worth a candle. Tessa Finch, an accountant, had told walesonline that the county council had invested around £40 million in the Scarlets, a claim that chief executive Mr James decried as “ongoing nonsense peddled by a small minority of people who didn’t want the stadium built”, adding that he was “concerned but not surprised about the language used by those who would wish the club and council harm.”

It’s a huge assumption to make that criticism of the amounts of public money spent inevitably come from critics who wish harm to the authority. I would guess that most critics just want a democratic dialogue and have no intention of starting a vendetta.

Local resident Richard Roper pointed out to walesonline that Carmarthenshire’s figures for the amounts invested by the local authority excluded the value of the council-owned land on which the new stadium had been built. Mr Roper estimated the value as £14 million, which added to the £18.3 million gives £32.3 million.

Mr James dismissed the figure of £14 million as “just nonsense” and claimed: “We would never have developed any of the land in the area, had it not been for the decision to build a stadium, so it had no value.”

Can it be correct to say that such a large site had no value? I find that very hard to accept. It seems that the council has given a free loan of the land to the Scarlets, until such time, if ever, when they no longer want it.

The Scarlets are an important sporting asset, and the club has a superb history, but genuine concerns about the amount of council money injected into the Parc y Scarlets development are just that, genuine, and should be treated with respect and answered in clear detail.

Grant Thornton, auditors of Scarlets Regional Ltd, added a note to the 2010-11 accounts, expressing concern that “the existence of a material uncertainty …. may cast significant doubt about the company’s ability to continue as a going concern”.[2]

This doubt, from the auditors themselves, means that Carmarthenshire’s investments in the club are likely to come under rising scrutiny from the county’s residents.

Pat Dodd Racher, August 4th 2012


[1] ‘Scarlets in revival plan after financial auditors issue earning’, by Martin Shipton, May 3rd 2012, http://www.walesonline.co.uk

[2] ‘Scarlets in revival plan after financial auditors issue warning’, as above.

Why more shops will not regenerate Llanelli

Pugh Brothers used to be  well-known furniture store in Cowell Street, Llanelli

Pugh Brothers: the name on this once smart building in Cowell Street, Llanelli, harks back to the last century, when it denoted a smart, family-owned  furniture store.

The store closed in autumn 2004. Now, at street level the Smith & Jones pub sells £1.99 breakfasts, and the adjacent betting shop is there to offer the prospect of a free lunch.

At street level, this pub is the centrepiece of the old Pugh Brothers building

A stroll round the corner into Stepney Street reveals the breadlines on which many residents try to exist. Pawnbrokers are back, big time, with firms including Cash Generator and Cash@Maxx. The bargain shelves in discount stores like Poundland are cornerstones of Llanelli shopping. The profits generated by shoppers’ £s rarely stay in Llanelli, though — they disappear down the M4, for distribution to the directors and shareholders, wherever in the world they may be.

Pawnshops and charity shops are central to Llanelli shopping

Central Llanelli is not devoid of attractions. Free parking in the multi-story car park above the indoor market brings people in. There was scarcely a space when I visited. You can buy a value breakfast, furnish a home and replenish your wardrobe from the charity shops, get a payday loan (at colossal interest rates), and  buy excellent local produce in the market. And you can wander around the pedestrianised town centre without worrying about being flattened by a passing bus. 
If you want premium brands, or designer labels, Llanelli is not the town for you. If you need a lift to the upper floors of the car park, think again. When I visited, the lift was out of order, causing problems for people with poor mobility or in wheelchairs.

Bad news for the disabled 

At the other end of the modestly-sized St Elli shopping centre is an ASDA superstore, with its own extensive car park. ASDA has a doorway opening into the shopping precinct, but seems self-contained.

It is designed to be a one-stop shop, after all.

ASDA-land in the heart of Llanelli. Functional, but not great architecture

A mile to the west, on the huge Trostre and adjacent Pemberton retail parks, the car parking is free and plentiful. In fact, much of the vast space was empty.

Trostre has Tesco, Pemberton has Morrisons and Parc y Scarlets. The supporting stores are big national chains — PC World, Currys, Argos, Homebase, Comet, Halfords and many more, the same occupants that we see on retail parks all over the UK.

The retail parks were supposed to be regenerative magnets. They are magnets, but have proved the opposite of regenerative because providing a shop is not the same as increasing local cash flows. The amount of disposable income in the hands of households does not expand magically every time a new shop, or cafe, or leisure attraction, opens its doors. At least, if the shops are locally owned, the cash circulates locally. Money spent in national and international chains with branches in Llanelli is, after the wages have been paid, soon on its journey to distant horizons.

Pemberton Retail Park, Llanelli: plenty of parking space

 Llanelli has received emergency cash infusions in regeneration schemes masterminded by Carmarthenshire County Council. The current regeneration efforts date from 2008 when the Eastern Quarter development, close to the ASDA car park, was being planned. ITV Wales carried a news report in October 2008 about Llanelli becoming a ghost town, because of the Trostre and Pemberton retail parks. The council protested that the report “virtually ignored all the work, improvements and regeneration which have been happening”.*

Now in 2012, the Eastern Gateway development is a bulky construction site costing £25 million and renamed East Gate, to contain more shops and cafés, six restaurants, a Travelodge budget hotel, a six-screen cinema, 20,000 square feet of offices, and 240 parking spaces. East Gate is on a rather grand scale.

The current redevelopments are costing £60 million. The major funders are Carmarthenshire County Council and the European Regional Development Fund. Apart from East Gate, refurbishment of the library has a £3.5 million budget, the restoration of Llanelly House, opposite St Elli’s Church, has a £6 million price tag, and a theatre and creative industries quarter in the former Zion Chapel and Old Sunday School are taking £14.8 million. Improvements to the town centre account for the balance of the £60 million — cosmetic changes, a “showcase” to “promote the vision and provide information about the regeneration”, and a “Centre for Economic Inclusion”.**

£60 million, if divided between every adult and child in Carmarthenshire, would come to about £333 each. It’s a lot to pour into one town which has already been regenerated several times with lavish numbers of shopping opportunities. The latest incarnation, with its  offices and creative zone, may generate some incomes and jobs, but the emphasis is still on spending, mostly in outlets run by organisations which move profits out of the region.

Pawnbrokers meet a need, but do not indicate a population with stuffed wallets

What will happen to stores on the retail parks when East Gate opens? Towns full of pawnshops are not Bond Street or Mayfair, and Llanelli’s shoppers are already focused on stretching their incomes to the maximum. If new look Llanelli draws customers from Swansea, Neath and points east, businesses there will languish. Money in people’s pockets and wallets is not elastic, and the plastic elastic has shrunk. The rise of online commerce in an era of falling real incomes means that shop numbers ought to fall, not rise. Are there other, better ways of spending £60 million to regenerate Llanelli?  It’s too late to change direction now, but worth keeping a close eye on the economic impact.

The Pugh Brothers store was once the epitome of progress, after all.

Patricia Dodd Racher, May 18th 2012

* ‘Traders’ anger at TV slur’, http://www.thisissouthwales.co.uk, October 16th 2008.

** Details on http://www.trefllanellitown.com.

A few green shoots in Llanelli — and not provided by multinational business, either


Post Navigation

%d bloggers like this: