A mystery solved

This blog has reported previously (here and here) on the sale of the leasehold on a piece of land designated for use as a car park for the Scarlets stadium to Marstons, the pub and hotel chain. It now transpires that the price was £850,000, and the leasehold is understood to be 100 years.

The land in question is part of 17 acres leased by Camarthenshire County Council to the Scarlets for 150 years (we can't accuse the council of short-term thinking, can we?) for a peppercorn rent.

At a meeting of the county council in November 2007 the council heard that the entire 17 acre site was valued at just £210,000, thanks largely to its planning designation for recreational use. The chief executive acknowledged that the other half of the site, which had planning for retail, was worth an estimated £14 million.

Not bad, you might think, for a small parcel of land to go for four times the value of the much larger site of which it was part, but of course part of the deal involved changing the planning status by the ever obliging county council, and as previously hinted by the council, the proceeds have been split between the club and the council.

The council says that it is perfectly normal for a freeholder and leaseholder to share in the proceeds of such sales, although normally leaseholders in such situations will have actually bought their leases to begin with.

The Scarlets, on the other hand, were effectively gifted the land after council taxpayers had thoughtfully spent a lot of money on making the site suitable for development, and the fact that the club has sold it suggests that it was surplus to requirements anyway.

It is also understood that a significant chunk of the council's £425,000 share of the proceeds has been swallowed up by a very hefty lawyer's bill.

All of which raises the question whether the council, as it is legally supposed to do, has acted as a responsible steward of public money and had council taxpayers' interests uppermost in its mind, or whether it has hit on a new way of subsidising the club at everyone else's expense.

For the last couple of years the club has made mention in its annual reports of plans to sell a significant asset, without specifying what that asset might be. It looks as though we now know.

Whatever the Scarlet's net share of the proceeds is after deduction of costs, it will make barely any difference to the gaping hole in the club's finances, although it may, just, enable it to report an improvement in results for the last financial year thanks to this extraordinary item.

Perhaps the sale of Car Park A will pave the way for more sell-offs as that original recreational designation is magically transformed into something more commercially attractive.

Trebles all round for the legal fraternity and the men in suits in the Scarlets boardroom, perhaps, but it looks as though council taxpayers will have to make do with a bitter lemon.