Deals in the Dark: Council’s involvement in failed property schemes
Recent police investigations into the numerous stalled projects around the city have brought to light a suspicious web of dodgy deals and undocumented meetings.
The sites promised to put the city on the map: state-of-the-art developments would create new jobs and new homes, in addition to revitalising declining areas, such as Chinatown, showcasing ‘ground-breaking’ new creative designs. Instead, Liverpool has been left littered with developments in various stages of incompletion, and a trail of angry investors overseas.
The developments were part of several schemes in northern England that were promoted to investors in Asia. Baltic House (in the Baltic Triangle area), New Chinatown, and North Point Pall Mall were all taken on by development company, North Point Global, and were flogged at ‘lavish roadshows’ to potential investors in Hong Kong, who were promised a high yield of return.
Buyer-funded development has bloomed since the financial crisis in 2008, when banks became wary of giving out finance to developers, leading to companies turning to smaller investors, who buy units in new developments under the promise of a profit.
Those who invested in North Point Global projects were made to pay 80% of the cost upfront – many put their life savings into the scheme, or remortgaged their homes. However, the abandoned projects mean they have seen no return in three years, and are now demanding a total of £90m to be returned.
A brief look into North Point Global quickly leads to one central figure – Peter McInnes. From a fleeting search on Companies House, it is clear to see he has fingers in a lot of pies, and has set up, and subsequently liquidated, multiple companies – and that is excluding the ones he has created and named his sister as the director, instead.
In 2009, JGLT Developments, of which McInnes was one of the directors, was given the lease to Eldon Grove in Vauxhall (this story has been covered extensively in the Scottie Press).
The company was only incorporated a few months earlier in April 2009, and since being given the lease, has left the Eldon Grove site to deteriorate to such a point that it is unlikely the building will survive another winter. McInnes left JGLT Developments in January 2010. In December of the same year, he set up Peckers Hill Development Company, alongside his wife and Anthony Quigley who was imprisoned last year for supplying heroin. This company was dissolved on 3rd March 2015, shortly before Quigley was arrested in June 2015.
Now onto the company in question – North Point Global (NPG). NPG became an incorporated company on 28th April 2015, yet entered into talks with Liverpool City Council regarding the New Chinatown site on 16th March 2015 – so before it was even incorporated.
Alt Valley Voice submitted a freedom of information (FOI) request to Liverpool City Council, requesting the minutes from these meetings, attended by Cllr Ann O’Byrne, Nick Kavanagh, Mark Kitts, and Nik Puttnam, held between 16th March and 2nd June 2015. The council replied that these meetings were ‘informal’; therefore, no minutes were taken, despite it being a £200m project.
The contract for the New Chinatown development was given to NPG in June 2015: a brand new company with no financial history, no portfolio, and a leading individual who had previous involvement with the derelict Eldon Grove and strong ties to criminals, yet, according to a response to a FOI request, ‘scored higher than other organisations in the process’, even though there is no record of this, as there are no minutes from the meetings. This lack of transparency means questions have arisen: what due diligence, if any, was done?
Following the appointment of NPG as developer of the New Chinatown site, the hunt for investors began. According to Liverpool City Council, they do not ‘engage in direct selling or marketing to investors of any schemes, other than those wholly owned and run by Liverpool City Council’, but does, however, ‘promote schemes across the city as part of its job of increasing investment and growing the economy’. The council certainly took a leading role in the ‘promotion’ of the New Chinatown development.
Mayor Joe Anderson himself made a trip to China, alongside then-Chancellor George Osborne in September 2015, as part of a UK trade mission. In an interview with the Liverpool Echo, Osborne said the pair were ‘pitching two different projects – the new Chinatown, the old Tribeca site’ to potential investors, and that he and Anderson were ‘going at it as a tag team’, persuading people to put their money into the development.
There is no problem with bettering the city through the promotion of legitimate, properly researched projects. However, the simple association of council officials and the Chancellor with NPG lent it a credibility that did not exist, making it appear as though it was endorsed by an official body, and persuading people to part with their money and invest in what looked like a stable and solid development.
This has led to speculation as to whether there was a hidden agenda for certain council officials over the New Chinatown site – otherwise, why was everything not done above board and minutes taken? Why would the council put their reputation in jeopardy for an unestablished company linked to people with a murky past?
In April 2016, allegations of money laundering began to arise in the press, in connection to McInnes’ links to Quigley, and drug dealers Stephen and Peter Clarke. As this progressed, McInnes moved to dissolve PHD1 (the parent company of NPG) and its associated companies, seamlessly transferring council contracts to the newly founded Bilt Group, of which his sister, Julie McInnes, was named as director. It also happens that the council doesn’t have to carry out due diligence on companies that contracts are transferred to.
Finally, in July 2017, NPG announced that they were pulling out of the various contracts around the city, including the New Chinatown site. Since then, they have been embroiled in legal battles with the council over fees and leases. The site has finally been sold to Great George Street Developments, who will apparently not be relying on individual investors to fund the remainder of the project, and have reassured existing investors that their money is safe.
There is now a police investigation into the schemes, and a recent BBC Panorama programme brought some of these issues to light. Hopefully, the ongoing investigation will reveal what the council want to keep in the dark.