Government support for the redevelopment of the Ocean Castle site

Summary

A request was made for financial cases, meeting minutes, conflict declarations, and strategic analysis regarding government support for the Ocean Castle redevelopment under the Island Infrastructure Scheme. The Department for Enterprise partially responded by providing links to scheme legislation and guidance but withheld specific project documents and analysis.

Key Facts

• The request concerns government support for the Ocean Castle site redevelopment.
• The support is provided under the Island Infrastructure Scheme.
• The Department for Enterprise is the responding authority.
• The outcome was classified as 'Some information sent but part exempt'.
• The response provided links to scheme legislation and guidance instead of specific project data.

Data Disclosed

• 2024-07-16
• 2024-07-31
• 3977533
• 9
• 1
• 2022-0281

Original Request

I understand that the above development has been granted support by the Department for Enterprise under the Island Infrastructure Scheme. I request the following information: 1. A copy of the financial case submitted by the Developer; 2. Minutes of meetings held to discuss the application; 3. Declarations of conflicts of interest by Officers, Directors of the Department, the Developer, Ministers and MHKs involved in considering and approving the application for financial support; Cost / benefit analysis for the project including the cost of the land, the cost of the development, the amount and nature of government support, expected sales value and government recovery; 4. Conditions that the Developer needs to meet to qualify for government support; 5. Can I get the Department's analysis of the following: a. Who are the target buyers of the apartments? If they are young professionals to meet the government's objective to increase the working age population, the apartments are quite expensive with a long commute to Douglas, so can you provide a statement on how the development fits the Isle of Man Economic Strategy; b. Does the site need to be overdeveloped for the government to make a profit or break even given that the current plans do not meet Isle of Man standards for minimum distances/ overlooking and provision of affordable accommodation? c. Changes to the nature of an attractive tourist and leisure location by putting undue pressure on local amenities and parking; d. Environmental impact due to more intensive rainwater runoff and acceleration of soil erosion and nearby landslides; e. Potential market distortion to the land values and competition as the developer's bid for the land appears to be contingent on approval of the planning application and government support; 6. Finally, can you provide an analysis / justification to show why this project is the best use of the Isle of Man's financial resources?

Data Tables (3)

Full Response Text

Freedom of Information Co-ordinator 1st Floor, St Georges Court Upper Church Street, Douglas Isle of Man IM1 1EX

Telephone: (01624 686400) Website: https://www.iomdfenterprise.im/

Our ref: 3977533 31 July 2024

Dear ###

We write further to your request, received 16 July 2024, which states:

"I understand that the above development has been granted support by the Department for Enterprise under the Island Infrastructure Scheme. I request the following information:

1. A copy of the financial case submitted by the Developer;

2. Minutes of meetings held to discuss the application;

3. Declarations of conflicts of interest by Officers, Directors of the Department, the Developer, Ministers and MHKs involved in considering and approving the application for financial support;

Cost / benefit analysis for the project including the cost of the land, the cost of the development, the amount and nature of government support, expected sales value and government recovery;

1. Conditions that the Developer needs to meet to qualify for government support;

2. Can I get the Department's analysis of the following:

a. Who are the target buyers of the apartments? If they are young professionals to meet the government's objective to increase the working age population, the apartments are quite expensive with a long commute to Douglas, so can you provide a statement on how the development fits the Isle of Man Economic Strategy;

b. Does the site need to be overdeveloped for the government to make a profit or break even given that the current plans do not meet Isle of Man standards for minimum distances/ overlooking and provision of affordable accommodation?

c. Changes to the nature of an attractive tourist and leisure location by putting undue pressure on local amenities and parking;

Page | 2 d. Environmental impact due to more intensive rainwater runoff and acceleration of soil erosion and nearby landslides;

e. Potential market distortion to the land values and competition as the developer's bid for the land appears to be contingent on approval of the planning application and government support;

1. Finally, can you provide an analysis / justification to show why this project is the best use of the Isle of Man's financial resources?"

Our response to your request is as follows:

“I understand that the above development has been granted support by the Department for Enterprise under the Island Infrastructure Scheme. I request the following information:”

In order to provide as much information as possible to assist you in your request for information, the Department would refer you to the published eligibility of the Scheme which can be found either within the Scheme’s legislation or the accompanying Guidance, which can be found at the following links:

https://legislation.gov.im/cms/images/LEGISLATION/SUBORDINATE/2022/2022- 0281/2022- 281.pdf?zoom_highlight=Island+infrastructure+scheme#search=%22Island%20infras tructure%20scheme

https://www.iomdfenterprise.im/media/vwqbpwyy/island-infrastructure-scheme- guidance-round-3-july-24.pdf

“1. A copy of the financial case submitted by the Developer;”

“Cost / benefit analysis for the project including the cost of the land, the cost of the development, the amount and nature of government support, expected sales value and government recovery;”

“4. Conditions that the Developer needs to meet to qualify for government support;”

The three requests for information noted above have been placed together for a response as the Department considers that the application of a qualified exemption under Section 30 (2) (b) of the Act would apply as release would or would be likely to prejudice the commercial interests of a person.

Assessment of s30 (2) (b) – Commercial Interest

In applying the exemption, the Department has considered if the information is disclosed would or would it be likely to otherwise prejudice the commercial interests of a person, determining:

Page | 3 • That disclosure could have an adverse effect on the ability of the person to participate competitively in a commercial activity.

• There would be damage to the reputation of the business and to the reputation of business confidence in Government in releasing this information.

Prejudice

As disclosure under the Act is a disclosure to the world rather than a disclosure to the individual requestor and it is acknowledged that this information could be reproduced and disseminated once published, if this information were to be published it could influence the commercial interests of the businesses and business confidence in Government.

It is likely that disclosure at this stage would be likely to adversely impact potential investors into any of the developments, thereby rendering the development unviable.

Public Interest test

Factors in favour of disclosure:

• Increased confidence in the decision-making process which will increase trust in Government.

• Promotes transparency and accountability of public authorities, greater public awareness and understanding.

Factors in favour of maintaining the exemption:

• To avoid harm to the economic environment. This is considered a heavy weighting given the specific assessments linked above.

• Disclosure would adversely affect the reputation of Government.

• Disclosure of the details of the applicants at this stage pose a real risk that the developments would not go ahead. The Island Infrastructure Scheme aims to contribute to the delivery of the aims of the Isle of Man Economic Strategy and support long-term economic growth and increase the Island’s annual revenue. Should developments not proceed due to the release of information which harms their commercial interest, this would also cause harm to our growth plans and curtail any economic benefits of the applications under the Island Infrastructure Scheme.

Therefore, the Department considers that whilst the public may have an interest in the information were it to be disclosed, the Department considers that in this scenario the reasons for not disclosing outweigh any benefits for disclosing. It is not in the interest of the public for the information to be released due to the likelihood of harm to the economic environment of the Island, competition and the commercial interest of the applicant.

Page | 4

“2. Minutes of meetings held to discuss the application;”

The Department considers this request constitutes as a qualified exemption under Section 35 (b) (ii) of the Act, will apply as disclosure would, or would be likely to inhibit the free and frank exchange of views for the purposes of deliberation, both between the Department and the Developer and more generally within the Department.

Assessment of s35 (b) (ii) - Conduct of Public Business

In applying the exemption, the Department has considered if the information is disclosed would or would it be likely to inhibit free and frank exchange of views for the purposes of deliberation, namely that:

• Disclosure will inhibit the expression of views which is required in order or ensure that applications to the Scheme can be debated in a full without restraint.

Prejudice

As disclosure under the Act is a disclosure to the world rather than a disclosure to the individual requestor and it is acknowledged that this information could be reproduced and disseminated once published, if this information were to be published it could influence the commercial interests of the businesses and business confidence in Government.

It is likely that disclosure at this stage will adversely impact the decision-making process which may prejudice future applications to the Scheme. To maintain trust and work collaboratively and effectively, it is important the Department can hold full frank and free discussions between officers and developers and broader Government Departments. This development, alongside the others in receipt of funding in principle to date, remain at an early stage with none having yet moved to the construction stage. It is estimated the first development is approximately two years from completion and during this time, there will be frequent dialogue between these parties where we must be able to raise issues and seek information with trust from all parties.

Public Interest test

Factors in favour of disclosure:

• Increased confidence in the decision-making process which will increase trust in Government.

• Promotes transparency and accountability of public authorities, greater public awareness and understanding.

Factors in favour of maintaining the exemption:

• Disclosure would be likely to inhibit the ability of public authority staff and others to express themselves openly, honestly and completely, or to explore extreme options, when providing advice or giving their views as part of the process of deliberation. Page | 5 Disclosing such information could therefore impair the quality of decision making by the public authority.

Therefore, the Department considers that whilst the public may be interested in the information were it to be provided, the Department considers that in this scenario the reasons for not disclosing outweigh any benefits for disclosing. It is not in the interest of the public for the information to be released due to the likelihood of harm to the decision-making process and to openly debate this and future applications, noting that the Island Infrastructure Scheme is currently open to applications.

“3. Declarations of conflicts of interest by Officers, Directors of the Department, the Developer, Ministers and MHKs involved in considering and approving the application for financial support;”

We can advise that there were no declarations of conflicts of interest by Officers or those present during the consideration of the application at the Department, Treasury or the Economic Strategy Board.

“5. Can I get the Department's analysis of the following:

a. Who are the target buyers of the apartments? If they are young professionals to meet the government's objective to increase the working age population, the apartments are quite expensive with a long commute to Douglas, so can you provide a statement on how the development fits the Isle of Man Economic Strategy;”

The Development does not hold the information requested; however, the Department understands that the development will cater for a broad mix of residents.

This is in line with Section 11(3)a of the Act, as a practical refusal reason applies; namely we do not hold the information that you have requested.

The Department issued a press release on 21 September 2023, this outlines how the development, together with others announced at that time, contribute to the delivery of the Isle of Man Economic Strategy.

A link to the release is provided here, https://www.iomdfenterprise.im/news- events/bold-regeneration-plans-announced-through-the-island-infrastructure-scheme/ and the relevant extract is copied below:

“Tim Johnston MHK, Minister for Enterprise commented:

‘The Island Infrastructure Scheme represents a significant stride towards realising the Island’s vision for sustainable growth, connectivity and prosperity.

‘Through this Scheme, we are leveraging private sector funding and capability in line with the Economic Strategy, working together to secure the regeneration of complex urban unoccupied sites. We are now enabling the redevelopment of key vacant sites across the Island which have remained empty for decades. The combination of substantial construction activity, together with ongoing active use post regeneration Page | 6 over many years, ensures that as well as securing substantial private sector investment, there is an expected overall value to the economy and the public purse significantly in excess of any grants ultimately paid.

‘By breathing new life into neglected spaces, this Scheme not only addresses the pressing issue the Island faces, but also demonstrates our commitment, as outlined in our Island Plan, to creating a more vibrant, sustainable and inclusive future, with towns and our capital at the heart of development, enabling communities to thrive.’

Dr Alex Allinson MHK, Treasury Minister added:

‘Key ambitions outlined in Our Island Plan and Economic Strategy are to further develop infrastructure and services for our community and plan for increased jobs, increased visitors and an increased working population. By providing funding from the £100m Economic Strategy Fund for schemes such as the Island Infrastructure Scheme, we are supporting and incentivising the private sector to invest in our Island while contributing to the economic growth, prosperity and sustainability of our Island.

‘The considerable investment sought from the private sector, is aligned with our ambitions to see £1bn invested over the long term, comprising both public and private finance, which in turn will allow us to further develop our Island and create an environment that is vibrant and attractive for all.

‘The provision of support, in principle, to the private sector is a key element of this approach to regeneration, sitting alongside the direct work the Manx Development Corporation (MDC) which is publicly owned, and progressing with its own plans for Government-owned brownfield sites.

‘As well as the existing work underway for the former Nurses Home in Douglas, and the plans now lodged for Westmoreland Road, which combined will see 170 residential homes created as well as commercial and social developments, MDC plays an important role in supporting the regeneration of Douglas.

‘During the last year, MDC has undertaken a number of investigations, surveys and feasibility studies around the Parade Street car park site in Lower Douglas. Following these investigations and approval from its steering group, MDC are in the early stages of a design process to create a multi-use development on the site.

‘Working in line with the already approved Tynwald masterplan for Lower Douglas, and the latest Area plan for the East, the site will include an expansion of its current capacity as a car park to help unlock the potential of the Lower Douglas area. The development will support already established businesses in the area along with any future brownfield developments within the vicinity.’

The Treasury Minister continued:

‘Extensive collaboration and stakeholder engagement with both public and private organisations continues to be undertaken, to refine what is required to ensure the best outcome, both financially and in terms of providing key public facilities that are currently lacking. This project exemplifies MDC’s purpose, to b

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