Council to set up joint company with Friargate developers - but it comes at a cost
Taxpayers will pay millions of pounds to the Irish government to clear the debt of the developer which owns the Friargate site in order to clear the way for the £100million scheme to progress.
Cannon Kirk, the founders of Friargate LLP, which is responsible for developing and marketing the site owes an eight-figure sum to the National Asset Management Agency (NAMA).
NAMA was created by the Irish government in late 2009 to provide loans in response to the financial crash and the bursting of the Irish property bubble.
Senior Coventry councillors have told the Telegraph that, as a result of the debt, the developers have been prevented from moving development forward in recent years - with the land acting as loan security.
Now, Coventry City Council is set to enter a 50/50 joint venture with the Irish landowners in a move that will see the council agree to clear the developer's debt with NAMA by issuing a loan of its own.
The new company will replace Friargate LLP and it is understood senior figures involved in the existing firm are to be ousted after a decade of failure to significantly progress the city's business district project.
But council officials insist the cost of the venture will pay for itself, and turn a profit, over the next 20 to 30 years - pointing towards a predicted uplift in business rates of £20million a year.
The scheme is now expected to be completed by 2027 - which should eventually see 25 new buildings, including 14 Grade A office blocks, housing and a hotel.
Asked if the reason the joint venture company was being set up was because the Irish developers had the council over a barrel, Cllr Mutton said: "No. It is because we need to see this land, which has been derelict for the last 10 years, developed."
I said at the very start the developers would go bust before it was built!
