The Savills report of November 2013 states very early on that they will only give a RICS (Royal Institute of Chartered Surveyors) defined Market Value for the Glasgow City Council public lands sold to Celtic.
However is this correct?
Apart from the facts that in 2005, when the valuations were defined in options and agreements, and in 2009 when the options were exercised and the lands transacted were not dealt with “in an arm’s length transaction after proper marketing”. In fact the lands sold were:
a. Closed transactions with Glasgow City Council only dealing with Celtic and there was no marketing therefore they were not open market transactions.
b. Celtic had the use of the land in the Celtic Triangle for years without paying any rent apart from the London Road Primary School which was leased and was being used as a Ticket Office in 2005.
c. Celtic were leasing Westthorn in 2005 and had a Sales Agreement defined for the end of the lease in 2009.
All of which destroys the idea that only a market valuation should be used.
What Did the District Valuer say about Special Purchaser in January 2005?
From the District Valuer’s letter 19 January 2005, and someone in Glasgow City Council has written in the margin ‘Special Purchaser’, the DV states definitively:
“The definition of Market Value does not necessarily require the valuer to ignore the existence of the ‘Special Purchaser’.”
And did Savills consider Special Value to a Special Purchaser. No. Why? That would increased the prices that Glasgow City Council should have charged Celtic.
Special Value definition
From the RICS Valuation – Professional Standards of 2012 covering 2005, 2009 and 2013, Special Value is defined as:
Note the last sentence “When special value is identified, it should be reported and clearly distinguished from market value“.
Savills ignored the RICS standards deliberately to give lower valuations.
RICS response to the International Valuation Standards Council (IVSC) in June 2016 on Special Value
In this RICS response dated 28 June 2016, to the International Valuation Standards Council (IVSC) when commenting on Special Value it says if:
” a special purchaser can be identified and, if so, there is an obligation on valuers to highlight the fact and draw the client’s attention to it. Since market value excludes such element, the additional bid that might be made by this know potential buyer must be identified and reported appropriately ie separately from market value”.
Savills did not follow RICS standards and unprofessionally chose to ignore the Special Value of all the lands sold by Glasgow City Council to Celtic.
Special Assumptions Definition
Again from the RICS Valuation – Professional Standards 2012
The first bullet point states “a situation where a bid from a special purchaser has been made, or can be reasonable anticipated”.
And the bullet point in 1.2:
“planning consent has been, or will be granted for development (including a change of use) at the property”.
Does that sound like a hotel development next to Celtic Park?
Clawback Recommended by District Valuer Ignored by Glasgow City Council
Where is the proposed Celtic Hotel development next to Celtic Park announced late 2016 to be located?
Well it will be on one of the plots of land that Glasgow City Council sold to Celtic.
Only place it could go would bottom right hand corner.
Oh that’s Site E referred to in the District Valuer’s letter dated 19 January 2005, under Conditions/Clawback.
What is Clawback, well it’s where a public authority, say like Glasgow City Council, is selling a public asset that may be valuable in the future. Clawback conditions are incorporated into the contract so that the public benefits from any future value increase. This means the public purse gets it’s share if the land is re-zoned say from Industrial or Recreational to Residential or Commercial then the value of that land increases dramatically. So that all the benefits from the sale of a public asset do not go solely to a private company.
Could that be like say like a plot of land that was going to be near new Commonwealth stadia for athletics and cycling as well as football. Possibly a plot of land that was sold as industrial which may be going to be used for a commercial hotel.
The District Valuer recommends in the above paragraph that Clawback be set at:
£750,000 per acre less the actual acquisition cost
What size was Site E? It’s 2.98 acres as per the DV letter Jan 2005.
What was the actual acquisition cost? Well the council don’t break it down. They sold all the Celtic Triangle land (excl the London Road Primary School) for £375,000 in the GCC Executive Committee 19 January 2007:
Taking the total cleared sites (which didn’t include the London Road Primary School in Jan 2007):
the total acreage is 6.87 acres for £375,000. That’s £54,585 an acre. That’s very very cheap. That’s Barras prices for prime land.
So the price for Site E would have been set at 2.98 acres x £54,585 an acre = £162,664.
So Clawback should have been set at £2,235,000 less £162,664 = £2,072,336.
Was Clawback incorporated into the sale of Site E by Glasgow City Council as recommended by the District Valuer? It doesn’t appear Glasgow City Council did.
So ratepayers will potentially miss out on capturing a portion of the £2 million if the hotel goes ahead. Now that clawback amount may have gradually been tapering over a long period. So being fair the clawback may be between £1 – £2 million.
Wonder the when Glasgow City Council give the Celtic hotel detailed planning approval that anything will be mentioned or will it just be hospitality at Celtic Park for the councillors again?
When Glasgow City Council started lying then more lies have had to be generated to cover-up their initial lies. Then the council ‘bought’ themselves a Savills ‘special’ report without Special Value for Special Purchasers just for the EU State Aid case response.
The Scottish Government had to keep the lies going and obviously did not get a second opinion on the documents supplied by Glasgow City Council, if they supplied all the documents?