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A decision made (18.06.2009) in relation to the purchase of 46 residential units at La Providence and the immediate onward sale.

Decision Reference: MD-PH-2009-0035
Decision Summary Title :	DS - Purchase of 46 residential units at “La Providence” from Bel Royal (Jersey) Limited and the onward sale to 46 purchasers in accordance with P74/2008 and MD-H-2009-0049 & 0055.		Date of Decision Summary:	4 June 2009
Decision Summary Author:	Principal Valuer		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR - Purchase of 46 residential units at “La Providence” from Bel Royal (Jersey) Limited and the onward sale to 46 purchasers in accordance with P74/2008 and MD-H-2009-0049 & 0055.		Date of Written Report:	4 June 2009
Written Report Author:	Principal Valuer		Written Report : Public or Exempt?	Public
Subject: PG 2091 - Purchase of 46 residential units at “La Providence” from Bel Royal (Jersey) Limited and the onward sale to 46 purchasers in accordance with P74/2008 and MD-H-2009-0049 & 0055.
Decision(s): The Minister: accepted the recommendation of the Minister for Housing (MD-H-2009-0049), in relation to the purchase of 46 residential units at La Providence from Bel Royal (Jersey) Limited. approved the immediate onward sale of those units to the 46 purchasers selected in accordance with the “Gateway“ process and under the terms of the attached report. authorised the Director of Jersey Property Holdings (or in his absence the Assistant Director - Finance and Investment) to approve each of the onward sales under his delegated authority. approved the use of receipts from the sale of residential units at "La Providence" to fund purchase of the units and for these transactions to be managed through a rechargeable account.
Reason(s) for Decision: 1. Under Standing Order 168 (1) (a) and 168 (2) (a) and (b) the Minister accepts the recommendation of a body established by the States to manage land and buildings owned by the Public of Jersey. 2. Under Standing Order 168 (5) the Minister hereby authorised the Attorney General and the Greffier to pass any contract which is required to be passed on behalf of the Public.
Resource Implications: There are no financial or manpower implications in respect of this decision other than those detailed in the report.
Action required: 1. In accordance with Standing Order 168 (3) this decision must be presented to the States at least 15 working days before the contract is passed. After the expiry of 15 working days following presentation to the States the transaction may be concluded. 2. The Director of Jersey Property Holdings is to instruct the Attorney General and the Greffier to pass the necessary contracts and to copy this decision to the Minister, Treasurer, Deputy Treasurer and the Minister for Housing.
Signature:		Position: (Minister) MD-PH-2009-0035
Date Signed: 18/06/09		Date of Decision:

"La Providence" - Purchase of 46 residential units from Bel Royal (Jersey) Limited and immediate onward sale.

TREASURY AND RESOURCES DEPARTMENT

JERSEY PROPERTY HOLDINGS

Property Transaction for Ministerial Decision - Minister for Treasury and Resources

Purchase of 46 residential units at “La Providence” from Bel Royal (Jersey) Limited and the onward sale to 46 purchasers in accordance with P74/2008 and MD-H-2009-0049 & 0055

PG 2091

Purpose

To seek approval from the Assistant Minister for Treasury and Resources for the Public to enter into an agreement to purchase 46 residential units at “La Providence” as shown, as plot numbers, on the attached schedule from Bel Royal (Jersey) Limited and thereafter the immediate onward sale to the 46 purchasers selected under the “Gateway” scheme, the individual sales to be approved under delegated authority by the Director of Jersey Property Holdings (JPH) or the Assistant Director (Finance and Investment) in his absence.

Background

On the 10 July 2008 the States approved P74.2008 “Jersey Homebuy Housing: Amendment to Island Planning Policy H1”. This proposition amended the Island Plan to include a provision for “Jersey Homebuy Housing” within the definition of “Category A” housing for the remaining H2 housing sites.

Current Situation

In May 2007 a planning permit was issued by the Minister for Planning & Environment to Bel Royal (Jersey) Limited for the construction of 102 residential units of accommodation on fields 848, 851, 853, 854, 861, 862A & 863A Bel Royal St Lawrence. The development is now known as “La Providence” and has now been identified as a Jersey Homebuy site with 46 of the 102 units being designated.

The scheme requires the developer of a designated site to sell the completed Jersey Homebuy Homes to an approved Not for Profit Body (NPB) at less than the First Time Buyer value. The NPB then sells the homes for the same value while taking a second charge on the property for the difference between the value it paid and the First Time Buyer Market Value when next conveyed.

The Housing Department itself qualifies as a NPB under the scheme and as such will be the nominated party to be the beneficiary of the second charge held against each of the 46 properties at the La Providence site.

It has been agreed that the properties will be purchased and sold on with a discount of between 40% and 44% as shown on the attached schedule.

The valuation of the 46 First Time Buyer properties has been assessed at £20,536,000.00. The Public acting as the NPB will acquire the 46 properties for £12,005,000.00 with an estimated value of £8,531,000, secured as second charges, representing the deferred payment.

The Ministerial Decision will approve all the transactions but they may not all pass contract on the same day. It should be noted that the Public will not acquire an individual property unless it is to be resold in the same court sitting.

It has been confirmed by the Housing Department that the purchasers of all 46 properties being acquired and then resold will benefit from the warranties, guarantees etc. normally provided by a developer, that a buyer would usually expect when purchasing a new property. For the avoidance of doubt the Public does not confer any warranties or guarantees in respect of these properties, and no liability is to be taken on by the Public.

The sale of a property will take place immediately following the purchase of that property in an uninterrupted or back to back process. The total cash receipts and payments from these transactions will be equal. It is proposed that these transactions are managed through a recharge account under Article 33(3) of the Public Finances (Jersey) Law 2005. The substance of these transaction is that the States own each property temporarily whilst it is sold on to the individual. The purchase by the States only being enacted on the basis that the property will be sold on. Ministerial approval is required to use receipts from the sale of capital assets.

In accordance with MD-H-2009-0049 & 0055 the Minister for Housing seeks the acceptance of the Minister for Treasury and Resources to the terms and conditions which have been agreed by the Housing Department on behalf of the Public for these transactions.

Recommendation

It is recommended that the Minister accepts the decision(s) of the Minister for Housing in accordance with the terms and conditions found here in.

Written By: Paul Griffin

Signature …………………………

Authorised By: (Director JPH)

Signature ………………………… Date 4 June 2009