Daft Old Duffer returns. Guest opinion articles do not necessarily reflect the views of the publication.
Daft Old Duffer’s predictions below are his own opinion and not based on the facts as they are set out in the contract. Ed
Having read Sally’s detailed analysis of the Winter Gardens situation I make the following prophecy:
That within five years from now the site will house a block of luxury apartments, sold at prices few Islanders can afford, and used by its wealthy overner owners as retirement or holiday homes.
I don’t have any insider information, and I certainly don’t have access to some crystal ball. My prediction is based purely on what I consider a common sense, feet on the ground, appraisal.
So here goes
When the Hamborough Group snapped up the Winter Gardens site, it acted as any other development business, snapping up a prime town centre site before some rival beat them to it.
Of course, it made noises about restaurants and hotel accommodation. But that was, in my view, merely to sweeten the deal.
Chefs are chefs
Chefs have two low level skills. They can prepare food and they can bully underlings. Why would anyone seriously consider putting such a bloke in charge of a building site – except for show?
The Group grabbed the site, using monies that would otherwise vanish into the coffers of the Government, because it was confident it could make a profit on the deal, no matter what the outcome of any future arrangements.
And turning a profit for its shareholders is its primary function.
Selling on the site
It could, for instance, without laying out a penny more, simply sell the site on after a year or two, making a worthwhile profit, to some other speculator.
Or, it could clear the site first and sell it at an even higher price as ripe for development.
It could hire an architect to lay out a general arrangement drawing, get planning permission, and sell it on as ‘with planning consent’. At an even huger hike in profit.
Or it could actually develop the site and either run it or sell it on as complete and ready to run.
And here’s the bad news
None of the above is likely to happen until and unless the flow of visitors and new inhabitants increases substantially, which, given the present economic climate, won’t happen for years and years. If it happens at all.
Except, quite possibly and I believe, probably – the apartment outcome.
And a further reason for thinking the apartment block(s) the most likely outcome is simply that pre-sales of some of the apartments would help finance the deep piling necessary on the site before any sort of construction could begin. And by the time the block or blocks was complete, the profits would be securely banked.
High profit margin with little outlay risk?
In other words a secure high profit margin, promptly returned, with little outlay risk.
No proposed eatery or hotel could produce that.
Not on the Isle Of Wight.
Buy-back option
There is of course a get out clause that allows the Council to buy back the site if it wishes.
But do not make the mistake of assuming the cost will be in the region of one pound plus a few thousand pounds.
I believe it will be in the region of the same amount the Group could obtain by selling on to another business – in other words a price the Council would find hard to find or to justify.
And if the Council do decide to bite the bullet and regain possession, what then?
Just further on-going costs as they strive to maintain the ever–crumbling, rat infested property, employ a security firm to keep out squatters, and go through the same process of seeking a buyer all over again.
