George Square ‘mortgaged’ to Barclays Bank

“…Glasgow’s principal civic space, George Square, running through the conference as a leitmotiv…”

Glasgow has a new, timely, ALEO (arms length external organisation), City Property (Glasgow) LLP, to which Glasgow City Council will be transferring the rights to the income from hundreds of income-generating properties in exchange for £120m. The titles to the properties will still legally remain the council’s in most cases, although a small number have been already marked for sale.

“City Property (Glasgow) LLP was established on 1st October 2009, evolving from the property services previously provided by Glasgow City Council, Development & Regeneration Services. Operating as an autonomous company with its own Board and Managing Director will enable the organisation to efficiently and effectively deliver to the market a wide range of exciting property opportunities. City Property (Glasgow) LLP covers four main areas of activity: Disposal, Development, Regeneration, Investment Opportunities.”

Green Councillor, Nina Baker, has uncovered City Property (Glasgow) LLP’s business case was based on all the council’s properties, not just the ‘surplus’ or income-generating ones. The list provided to the consultants who did the business plan included the parks, George Square, etc, etc.

Bizarrely, Baker found, the £120m loan from Barclays required no due diligence, so none of the property titles have been checked; contamination hasn’t been checked. The LLP reckons it can easily pay off the loan from the rental incomes and will get £2m from GCC to manage other properties. However, one of its roles is to prepare surplus properties for sale, e.g. by decontamination and getting planning permissions, etc. But those may be more difficult than they think if any are Common Good Fund (CGF) or have other restrictions on the titles. To give an example, Overnewton community centre (in Overnewton Square) is one of the dozen closed by Labour’s budget cuts and was to be handed over to the LLP for demolition. However if they had done that, they couldn’t sell the land or rebuild on it because of the existing restrictions in disposition documents in the title. They have no way to know if any are CGF.

So the LLP is at significant risk of not realising the income it needs to pay off the £120m loan. All of the loan is already promised a few times over by the Council for paying redundancies, as well as building primary schools* and care homes, etc, etc…

It may soon be easier for residents of Glasgow to empathise with the citizens of Iceland.

* This is not the first time politicians have recently ‘wrongly accounted’. The principal reason put forward for the closure of 20 schools in the city last year could not be supported by official statistics. In April 2009 leading Labour politicians within the country’s largest local authority revealed that they intended to close a significant number of city schools because of “falling school rolls”, after which it transpired the principal reason put forward for the closures could not be supported by official statistics, but still intimated an extra £2million in cuts to the city’s education budget to accommodate for increased number of pupils in remaining city classrooms as the decision on closures would not be reversed.…

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