Belfast Telegraph

Files binned on public land sold at cut price to mystery buyer

By Adrian Rutherford

Questions are piling up as to why files at the centre of a controversial public land sale were destroyed — months after it came under investigation from the Audit Office.

A prime 2.5 acre-site on Belfast’s Malone Road was sold for £1m below its estimated value to a mystery buyer, who then resold it on the same day.

Now it has emerged that key documents linked to the deals no longer exist.

The files were destroyed in 2010 — even though an Audit Office probe began the previous year.

Yesterday members of Stormont’s Public Accounts Committee said urgent answers were needed. “There are a lot of unanswered questions and they need answered,” DUP MLA Adrian McQuillan told the Belfast Telegraph.

“We as a Public Accounts Committee are here to make sure the public gets value for money.

“At this moment I’m not sure they did get value for money with that site.”

The Malone Road barracks site was sold without planning permission for £3.8m — some £1m below its estimated value — in October 2003. It was then resold on the same day.

The identities of both purchasers, and the sell-on price, have never been revealed.

The Audit Office began investigating the case three years ago, but on Wednesday a PAC meeting heard that important files linked to the sales were destroyed in 2010, after the probe had begun.

According to officials, the files were destroyed while staff were moving to new offices.

However, Mr McQuillan said it was not acceptable.

“It is far from satisfactory, and it makes the whole thing far more suspicious,” he added.

“It makes people believe there is something to hide, even if there isn’t. Whoever is responsible for this has made a serious error of judgment.”

East Londonderry MLA John Dallat said it was “astonishing” that details of who purchased the site were unavailable. “We don’t know anything about how much money was made when the sale was flipped on the day,” he said.

OFMDFM official Noel Lavery, and David Ross from Land and Property Services, both pledged to obtain further information to address questions raised by MLAs at Wednesday’s meeting.

However, Mr Dallat said he was concerned by the absence of detailed answers.

“It seems extraordinary to me that officials coming before a PAC meeting were so ill-prepared and had so little of the evidence with them,” he added. “I’m surprised they hadn’t anticipated that Members would want to know more details about the circumstances around which the files went missing.”

Ulster Unionist MLA Michael Copeland said it wasn’t the first time that key documents related to an investigation had vanished.

“There are a number of occasions where files have been lost or destroyed when requested by the PAC or Audit Office, and that gives me some concern,” he said. “There are many questions which I would like answers to, but very few answers appear to be forthcoming.”

Luxury apartments were built on the site after it was resold, and set a new high for property pricing at the time.

The Audit Office report, published in November, concluded: “We have concerns that OFMDFM did not get best value from the sale of the Malone Road site.”

Taxpayers left short-changed after officials ‘had their eyes wiped’

More than a few eyebrows were raised when Malone Road barracks, a prime site in the leafy south Belfast suburbs, went under the hammer for what seemed a bargain £3.8m in late 2003.

Not only had it been snapped up for £1m below its estimated value, but the land was then resold — that day — by its new owner.

Luxury apartments later built on the site, now known as Malone Square, set a new high for property pricing at the time.

Now questions are piling up as to exactly why taxpayers were left so short-changed by the deal.

This week Stormont heard claims that officials from the Office of First Minister and Deputy First Minister (OFMDFM) and Land and Property Services (LPS) had had their “eyes wiped”.

The 2.5 acre Malone barracks base was one of several sites gifted to the Executive — at no cost — by the UK Government in 2002.

But a series of management failures led to taxpayers being left to clean up a multi-million pound mess. These included an £8.5m bill to decontaminate sites because OFMDFM failed to carry out proper checks.

A damning Audit Office report also concluded that millions from the sales of sites were handed back to the Exchequer, instead of being used to boost the economy.

Most alarming, however, was the Malone barracks deal.

When the site was transferred to OFMDFM in March 2003, its market value was estimated at £4.3m to £5m. It was decided to sell the site on the open market — without planning permission.

According to the Audit Office investigation, bids were received in the range of £3m to £5.5m.

However, a decision had been taken to accept only unconditional bids, and the best was £4.7m from a private developer. In June 2003 the bid was accepted, but it was later withdrawn.

The developer explained that a tree preservation order limited proposed development — even though all bidders had been made aware of the preservation order ahead of the bidding process.

OFMDFM’s agents approached the next highest bidder, who submitted a new offer of £3.6m, but this was not considered acceptable. According to OFMDFM papers from the period, the site was kept on the market and readvertised during August 2003.

Two months later, in October, a new bid of £3.8m from another developer was accepted.

However, the case then took a bizarre twist. On the same day, within hours of snapping up the property, the site was sold on.

The identity of both purchasers — and the price paid for the land when it was resold that day — remain a mystery. But the Audit Office later established that, in December 2005, the purchaser secured full planning permission.

Construction work was completed on 74 apartments and penthouses in June 2007.

“The development was reported as setting a new high for property pricing per square foot in Belfast at £500,” the Audit Office stated.

Its report, published last November, raised concerns that OFMDFM did not obtain best value for the site. The report said no attempt had been made to enhance its value with planning permission prior to sale.

And it noted the initial bidding process, where one party offered £4.7m before withdrawing the bid, showed evidence “the market was willing to pay considerably more” than the final settlement.

The Audit Office investigation began in 2009. But on Wednesday it emerged that documents on the sale were destroyed in 2010.

During a meeting of the Assembly’s Public Accounts Committee, LPS official David Ross said it occurred because Civil Service staff were moving offices.

Committee chair, Sinn Fein MLA Paul Maskey, expressed concerns over the files’ destruction.

“If a report began from the Audit Office in 2009 and then there's files destroyed in 2010, it seems very strange,” he said.

UUP MLA Michael Copeland added: “Something in this stinks.”

DUP MLA Adrian McQuillan said selling the site within hours suggested a profit was made — “and a very big profit”.

Noel Lavery, an accounting officer with OFMDFM, said he was not aware of how much the site was sold on for, and had not seen any evidence to suggest a better price could have been secured.

But he added: “If we didn’t get best value, clearly that would be of very great concern.”

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