Salford council has agreed in principle to sell a plot of land at The Quays in a deal which could end a multi-million pound legal action. The council and Trafford Park based developers Stama have been locked in litigation for three years since the local authority rejected the company's plans to transform the old Crescent Police Station into smart apartments.
The developer began High Court legal proceedings seeking damages of £6.5m for alleged breach of contract. The Manchester Evening News understands the council has already spent £160,000 in legal fees.
But a deal over an empty plot at Ontario Basin close to the Premier Inn, could be a solution to the dispute. It would see two apartment blocks built on the site. One would be 107 flats and be 100 per cent affordable and Stama are currently in "advanced negotiations" with a registered private landlord for the forwarded sale of the complete block, according to a council report.
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The second block would comprise 160 flats for sale on the open market. The report reveals that an earlier proposal which included a 162-bed hotel and 28 storey, 256-flat residential block, was scaled back due to "significant build cost inflation effecting the market, particularly in relation to high rise construction."
A potential second phase of development on the land could feature an eight-storey hotel with 154 bedrooms and a 12-storey block with 172 apartments. The land is owned by the council with part held by a third party on a long lease.
In a notice of decision published by the council, Deputy City Mayor, Councillor John Merry, delegated authority to senior council officers "to negotiate and finalise the commercial arrangements and all other necessary ancillary agreements to allow the completion of the arrangements as detailed in this report."
In a statement issued to the Manchester Evening News the council said: “Salford City Council has made a decision to approve the sale of land at Ontario Basin, Salford Quays. We are pleased that we have been able to work positively and proactively on the sale of this land and this will see a long standing empty site brought back into use for residential development with an anticipated high percentage of affordable properties. As this has been a one-to-one deal, the value of the site has been the subject of independent surveyors third party assessment to ensure best value obligations are achieved.”
The details of how much the land is to be sold for have been kept secret. In a report the council says the justification for this is: "The matter reported flows from a mediation session in relation to another property transaction between the parties that is the subject of ongoing litigation. That mediation session and the negotiations and discussions that have followed have been undertaken under the confidentiality agreed as part of the mediation engagement. The confidential arrangements extent to the reporting of the proposed agreements and have dictated that the decision to be made and full information shared will be considered as a Part 2 item (behind closed doors).
Councillor Robin Garrido, leader of the Tory Group on the council and fellow Conservative, Bob Clarke, had applied for the decision regarding the deal to be "called in" so that it could be the subject of further scrutiny but that was refused by the council's monitoring officer.
Councillor Garrido said: "I find it unbelievable (that it has not been called in). We are trying to look after the taxpayer's money in Salford. We feel this whole affair has been shrouded in secrecy. We will be asking more questions at the full council meeting next month.
"As far as we, the opposition are concerned, we will not be gagged, and will continue to demand call-ins where we think it is appropriate, and keep asking how money is being spent."
Stama Development told the Manchester Evening News in 2020 that they were left 'with no alternative' than to start proceedings over the police station proposal. The case was scheduled to be considered at a hearing at Manchester's Civil Justice Centre in March 2021. It was then rescheduled for May 2022.
Five current councillors and several former ones were to be called to give evidence at the hearing - some on behalf of the developers. Court records show that Stama brought the case against the local authority in June 2019.
The legal proceedings date back to 2017, when Stama’s plan to turn the former police HQ into flats was rejected because residents would have ‘dull views’ and little green space.
Developers wanted to transform the former police station - which has been lying empty since 2005 - into an £18m housing complex and had entered into a contract to buy the site from Salford council, providing planning consent was secured, for £1. 6m
But the scheme was rejected in 2017 by councillors who said that homeowners would have no gardens and that their windows would look out on dull and uninspiring views.
Property Alliance Group - Stama’s joint venture partner on the project - first threatened to take legal action against the local authority back in 2017, saying it had already sunk £230,000 into the project.
The Crescent Police Station, built in the 1950s, was shut down in 2005 and has been derelict since then. It is now earmarked for demolition as it sits in the middle of a district which is the subject of a masterplan for redevelopment.
