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Financial Integrity, Football, HMRC

District Valuer condemns Glasgow City Council concessions to Celtic in February 2007

In November 2016, Glasgow City Council thinking they solved the EU State Aid case against them and Celtic PLC by the unprofessional Savills report thought they could halt or reduce the flow of FOIs by listing ‘their narrative’ and documents relating to the case. Unfortunately the schedule of documents and the information therein has stirred up more questions.

Previously we discussed the Savills Report bought by GCC to get them out of the justifying the land valuations which generated the EU State Aid complaint and the said report’s unrealistic valuations of Westthorn at £200,000 under three residential scenarios in the years 2005, 2009 and 2013. 

Originally the District Valuer (DV) who works for the District Valuer Services (DVS) was brought in to assess the GCC’s land transactions with Celtic. Now who is the DV? Well here is what they do:

dv-description

They provide independent valuation services to the public sector and where public money or assets are being sold or acquired. Ultimately the DVS is under the HMRC.

That was a problem for the GCC and Celtic who did not want the District Valuer to encroach on their cosy little land deals.

This blog focuses on the DV letter of February 2007 and the dirty dealings of the GCC and Celtic to get rid of him. We shall dissect the DV’s letter and read not between the lines because he makes it plain his utter condemnation of those deals in which value was lost from the public purse.

District Valuer letter February 2007

The letter is listed on the GCC Schedule of Letters related to their land transactions with Celtic. Let’s take it paragraph by paragraph.

dv-feb-2007-para1

Note the DV’s disappointment that the taxpayer is getting screwed and condemns the GGC’s ‘proactive approach’ which means giving Celtic preferential treatment.

dv-feb-2007-para2

The DV makes it clear that the terms agreed were not commercial and ‘potentially’, he’s being diplomatic, says it’s ‘a windfall to Celtic’. 

dv-feb-2007-para3

Celtic told the GCC they only wanted to spend £675,000 and that was their starting figure for the GCC land transactions and Celtic wanted the GCC to come under that cap. Should this be the way fair and transparent land dealings on public assets are held? The DV says plainly that how the GCC is operating are not the way true value is obtained in commercial dealings.

Note: The GCC only dealt with Celtic these parcels of land which were not openly negotiated or advertised for other parties.

It’s Negotiation 101 that you create competition when tendering but what does the GCC do, it narrows the field to 1 candidate, Celtic, while the GCC hands out concessions for no reason. 

dv-feb-2007-para4

The DV doesn’t agree with the Celtic deals and says Westthorn is decided by arbitration. 

Well here’s where the DV was duped. And we’ll show it below. After the DV sends this letter the DV leaves the stage because he has been convinced that the GCC and Celtic will decide Westthorn’s valuation by arbitration BUT it didn’t happen. The GCC rolled over and gave Celtic everything they wanted. 

In fact the DV letter of February 2007 sets out his worries that the public purse was being plundered. And historically and financially he was correct.

dv-feb-2007-para5

The GCC always maintained that the land could only be sold to Celtic and using any of them for non-football related use would be difficult. In order to keep the value of the land down with no alternative use.

I’ll just drop this in here from Celtic spokesman, sorry journalist Stephen McGowan, in the Daily Mail in October 2016:

dm-celtic-hotel

What did the DV say in February 2007? ‘I consider that at least two of the five sites could easily be developed for non-football related uses, for example, as a HOTEL’. 

The DV highlighted to the GCC that the land was valuable and had other uses but no the GCC wanted to give the land as cheaply as possible to their favourites, Celtic. The DV’s saying that taxpayers were being set-up to be screwed badly and he was proven right.

But the EU State Aid case submission written by the Scottish Government cleared the GCC and Celtic.

Hmm…. Well did the Scottish government see the DV letter of February 2007? Or even worse it saw it and ignored it because it didn’t match the ‘narrative’ they were trying to weave with the Savills retrospective valuations.

DV Feb 2007 para6.PNG

Here the DV makes states bluntly that Celtic wanted the DV, defender of public assets, out of negotiations and did not handle the DV’s involvement in good faith. In fact Celtic went behind his back with the GCC to get rid of him by the stalling tactics of refusing to negotiate and push the valuation to arbitration which then of course never happened. GCC folded and gave Celtic everything they wanted.

dv-feb-2007-para7

dv-feb-2007-para8

The DV emphasises Celtic’s stalling by refusing to negotiate with the government Independent Valuer.

He then says that Westthorn should be valued against the sale of Belvidere, the former hospital right next door to Westthorn, which was to be turned into a residential development. Ground conditions would be very similar to Westthorn therefore Belvidere should be used to generate the Westthorn value. The DV says to obtain a Site Investigation Report on Belvidere.

Did the GCC give that Site Investigation to the arbiter? – No.

Was it used to value Westthorn by the GCC? – No.

Was this used by Savills in their valuation? No.

dv-feb-2007-para9

An option priced by the arbiter? The GCC gave Celtic a FREE option allowing them to decided when they paid the purchase price.

The DV also condemns the price for Westthorn being incremented by the RPI (Retail Price Index) instead of the 4% which should have been paid on the price until the deal was settled in 2009 by the latest.

Here we have commercial land being incremented based on the basic of groceries instead of commercial interest rates.

The GCC made no attempt at commercial negotiations and lay down submissively in front of Celtic.

dv-feb-2007-para10

Again the DV, without any need of a crystal ball, predicted that the land around Celtic Park and Westthorn would increase in value and there should not be incremented by the RPI.

dv-feb-2007-para11

So instead of the £30,000 annual rental Celtic was paying between 2005 and 2009, the DV said Celtic should have been paying £67,500, 10% of the 675,000 agreed. But the GCC agreed to less than half the DV recommended value. Again taxpayers pay for GCC’s lack of vigilance with a loss of £150,000 (4 x £37,500).

dv-feb-2007-para12

Again the DV says there was a loss to the public of £150,000+ on the Celtic Triangle lands which the GCC gave rent-free to Celtic for the years of free usage.

dv-feb-2007-para13

Celtic never paid any money for the option to acquire the London Road Primary School and the GCC also lost out since there was no rental of the building paid by Celtic while holding the option. £30,000 lost for every year.

dv-feb-2007-para14

The DV laid down every paragraph above condemning Glasgow City Council’s land dealing with Celtic.

Historically he was proven correct. He did his best to steer the council’s planning dept but the council and Celtic squeezed the DV out with the excuse that valuations were to be decided by arbitration.

The only watchdog was duped and the GCC & Celtic got what they wanted.

Glasgow ratepayers and UK taxpayers did not and were let down by the lack of due diligence, honesty and checks & balances by Glasgow City Council.

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