- Lord Street debacle continues.
- Latest property company Wyyttavin Limited cancels bid.
- Talk of Lord Street revamp has been going on for a staggering 37 years.
- IoM government judgement now called into question.
- Bad news comes amid unrelated bombshell court case involving a different previous developer.
- Sondica Group Inc., is suing the government for upto £90 million for an allegedly corrupt tender – which the Treasury and DoI deny.
- Blue chip advisors Lambert Smith Hampton are also under fire.
- Huge sums at stake in legal fight put IoM’s credit rating at risk – potentially triggering a technical default of its £400m bond issue.
The calamity-hit Lord Street revamp has suffered yet another serious setback.
The latest firm to propose an initiative talked big last July – after announcing grandiose plans to build ‘an architectural landmark’ on the central Douglas carpark – often described as a ‘bombsite.’
But last week Wyyttavin Limited dropped its own bombshell by suddenly bailing on the much-vaunted project.
The key developer unexpectedly withdrew a planning application for 85 flats, a cinema, restaurants and shops.
Their drawings had also included a green roof terrace, private parking for 91 vehicles, and a bus information centre.
But now the ‘ambitious’ designs may never get off the page, even though another one of the firms involved says the scheme is ‘still progressing.’
The news sowed confusion last Thursday, as papers and websites on the Island, reported the death knell of the latest regeneration attempt.
However, a press release by a partner company seemed to offer hope that they would carry on regardless.
But the optimistic claims have been met with scepticism.
Lord Street Development SPV Limited – which was selling the ill-fated site – said Wyyttavin Limited had pulled out for unexpected personal reasons, but that the project wasn’t over.
In a statement, the company said it hoped to resubmit new plans by the end of this month.
However, sources on the Island familiar with project, told Expose.News that the owners behind Lord Street Development SPV Limited were the same people that had been struggling to develop the site for the last eight years.
Kane Limited – which won the bid to develop the site back in 2017 – is a sister company of Lord Street Development SPV Limited, the firm which they used to purchase the freehold from the Department of Infrastructure.
Both companies have made similar claims about building out the site before, but not followed through.
One property business owner said: ‘It’s very sad that Wyyttavin have pulled out. They had a decent chance of finally pulling Lord Street off and getting this project out of the weeds.
‘Now, it just leaves Lord Street Development SPV Limited, which is disappointing as they’ll now need to find another buyer and that will cause further delays.’
If the situation is complicated enough, the Lord Street renewal has been further tangled by a high-stakes court case going on in the background, which has threatened to spiral out of control.
For the past seven years another developer called Sondica Group Incorporated has been suing the IoM government.
Despite winning the original tender, Sondica was then accused of changing its bid, which resulted in the same tender being re-run.
But then Sondica lost out – coincidentally to Kane Limited – a decision which Sondica’s lawyers say was allegedly tampered with by government officials.
Kane Limited are not accused of any wrongdoing, and the IoM government have denied corruptly interfering in the process.
A scenario which the judge said in the latest hearing ‘is not that complicated’ despite having ‘dragged on’ since 2018.
However, it’s not the case itself which has worried residents and commentators, but the potential ramifications because the public purse is exposed to potential costs of tens of millions of pounds.
The costs could top £100 million, sources close to the case have warned.
The two government departments being sued are on the rack for any losses.
Which means that a bumper payout is likely to affect the island’s gold-standard credit rating on Wall Street and in the City of London – and, in turn, cause a technical default of the £400 million loan which the IoM took out in 2021 as bond holders could demand all of their money back now.
Sondica Group was initially chosen as the preferred developer for long-abandoned former bus terminus – which has been described as an ‘eyesore’ – only for its ‘state of the art’ plan to be rejected the following month.
The Treasury Department are also facing claims of negligent mis-statement, also denied.
The tender was eventually awarded to Kane Limited, which also had a big vision, but one that has remained unfulfilled – the site is still a grim-looking car park – adding to local concerns that the government made a bad call in squashing Sondica’s potential.
Residents claim that the same street has been a graveyard of broken promises since the old but much loved bus station was demolished in 2002.
However, Manx cultural supremo Charles Guard remembers that he first heard of a Lord Street scheme as far back as 1987.
Isle of Man businessman Stephen Bradley is listed as a director of both Kane Limited and Lord Street Development SPV, which is known as a ‘purchase entity’ as this took control of the Lord Street site in 2020.
According to the Isle of Man Company Registry, Lord Street Developments SPV Limited is currently in default.
Previous plans by Kane Limited – which included an 80-bedroom hotel, six-storey car park and seven-screen cinema complex as well as some bus passenger and driver facilities – were approved in July 2019 but never progressed.
Then five years later Kane Limited – sister company Lord Street Development Limited – linked up with Wyyttavin to launch new plans – which are the same designs that were withdrawn last week
‘When Kane bought the site, they said they were going to build,’ our source told us.
‘But that has never happened and it’s remained a car park ever since.
‘Then their sister company Lord Street Development SPV Limited had a second crack with Wyyttavin, but seemingly that has now faultered, too.
‘The whole thing is a mess. There’s court case going on over Lord Street.
‘Granted it’s nothing to do with the latest problem, but if the government lose that case, it will cost a huge amount of money.
‘And it’s the tax payer that will have to foot the bill.
‘Once again, it’s the residents of the Isle of Man who suffer.
‘Particularly, the young people who cannot get accommodation or even the tourists who don’t have access to the kind of shops and eateries that you see in Liverpool or Manchester
‘Everyone suffers.’
Part 2 follows
