As Peel Holdings submits plans for the huge twenty year expansion of MediaCityUK, featuring five million square feet of offices, apartments, a hotel, retail units and car parks (see here), the Salford Star can reveal that the costs of the first built phase of MediaCityUK will be almost entirely met by public money.
According to the latest set of accounts from Peel Media (Holdings) Ltd - one of the three Peel subsidiary companies that own and run MediaCityUK - the `historical cost' of its properties on the Quays was £490.8million.
Meanwhile, the public sector will pay Peel nearly £487million in rents, grants and hire fees. This breaks down as…
• BBC rent of studios £233million (over 20 yrs)
• BBC rent of offices £170million (over 20 yrs)
• University of Salford campus rent £19.126million (until 2020)
• Salford Council lease on Media Enterprise Centre £3.8million (until 2016*)
• NWDA**/Salford Council (et al) grants for public realm and transport £61million.
The total of £486.9million in public finance for the privately owned MediaCityUK means that Peel have virtually covered all its costs - before raking in profits from its 378 apartments (est value £56million), its car parks, and its office space and studios rented out to private sector companies, including ITV.
NWDA and Salford Council financial contributions for things like the main piazza at MediaCityUK and the Metrolink, have only ever been disclosed as being £30million. But a Salford Council report recently stated that a "total public sector investment of £61m has been committed into Media City for the provision of public realm and transport infrastructure".
Normally when developers build hotels and apartment blocks they have to make payments to Salford Council under Section 106 for things like open space, infrastructure and heritage. In the original application put in by Peel for outline planning permission for Media City, this was calculated to be £5.56million. But Peel never had to pay it…
"…a significant amount of public realm and infrastructure works would be undertaken as part of the proposals, which I consider would outweigh the need for the above contribution" wrote the Salford Council planning officer.
Yet the `public realm and infrastructure works' were paid for by public money from the NWDA and Salford Council! What we now know is £61million's worth of `public realm and infrastructure'. This is the same NWDA that had an ex-Peel Deputy Chairman as its Chairman, and the same Peel Media that had an ex NWDA Chairman as its Chairman (see here)
The Salford Star put in a Freedom of Information request to Salford Council asking what contributions under Section 106 Peel Holdings had made in regard to Media City…
"In the case of MediaCityUK the developer committed to providing a series of public areas, including parks and squares, as well as a waterside piazza" the Council responded "...In this case the scale of the provision included within the development itself has been massive, and with the developer's commitment to maintain these areas as well, this meant that Section 106 would not be required in order to achieve the same outcome."
In other words, Peel contributed virtually nothing towards the main piazza***, which was almost entirely paid for by public money - yet its private security `police' have already ejected legal pickets from outside the University of Salford building (see here), while the Salford Star has received many complaints from people who have been stopped from handing out leaflets or filming (!) on the site.
Meanwhile, Salford Council also has in place a policy that any major housing development should make provision for 20% of it to be affordable housing. Peel Holdings has 378 apartments on MediaCityUK – but, again, this policy was waived by Salford Council's planning officer who "concluded that, given the large amount of investment and the level of public realm and infrastructure that would be provided within the site, the applicants are not required to provide affordable housing in this instance."
But the "public realm and infrastructure" was paid for out of public money!
Salford Council also has in place a policy that "encourages developers to provide or contribute to accredited training programmes for construction workers. Where this does not happen, a financial contribution to the Salford Construction Partnership is recommended."
Yet again, this policy was waived... "The applicants have commented that the proposals would result in the creation of in the region of 15,000 jobs in addition to training opportunities" stated the planning officer "Clearly, this would represent a significant economic benefit to the city. In view of this, and the other benefits and investment highlighted above, I do not consider it necessary to require the applicants to make a contribution towards training for construction workers in this instance."
So there you have it. The costs of Peel Holding's investment in the first built phase of MediaCityUK are almost entirely covered by public money. While its commitments under Section 106 were also either waved or covered by public money.
Yet MediaCityUK remains a totally private enterprise even down to the cameras the BBC use, with all profits from car parks, apartments, hotels, rents and other fees going straight to Peel Holdings.
Peel Holdings parent company, Peel Holdings (Land and Property) Ltd posted profits of £55million in its latest accounts. Peel Holdings Isle of Man based svengali, John Whittaker, last year saw his personal wealth double from £1,015million in 2010 to £2,075million in 2011, according to The Sunday Times Rich List.
Peel Holdings gave a paltry £17,000 to charity according to its latest accounts. The Salford Star is still waiting for a response from Peel Media as to whether it has taken on any apprentices from Salford. As reported yesterday (see here), just 16 people from Salford have been given proper jobs at the BBC's new base at MediaCityUK.
As plans for the huge five million square feet, twenty year expansion of MediaCityUK are about to be put before the planning panel, the Salford Star is waiting to see whether Salford Council will again waive all its financial contribution policies for Peel Holdings…
* The Media Enterprise Centre is Salford Council's new £8million office complex at MediaCityUK that will "offer a range of services to help stimulate and support the growth of media companies". Salford Council has contributed £1.7million, with NWDA (£2.5million) and European funding (ERDF £4.2million) contributing the rest.
** NWDA is the North West Development Agency soon to be abolished in March – see here for details of the very close ties between Peel Media and NWDA, starring Peter Mandelson
*** In response to another Salford Star question back in 2009, Salford Council did state that Peel was contributing £1.68million out of the initial £31.68million public realm costs but the Freedom of Info response didn't include this.
See also: How Salford BBC Jobs Cost Over £200,000 Each! - click here