SALFORD COUNCIL £1MILLION REDS LOAN FIASCO AS GODLIMAN WATSON HITS SKIDS - Salford Star

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SALFORD COUNCIL £1MILLION REDS LOAN FIASCO AS GODLIMAN WATSON HITS SKIDS

Star date: 11th December 2013

SALFORD COUNCIL'S `CREATIVE FINANCIAL MANOEUVRES' BACKFIRE AS WILLOWS LAND GOES INTO RECEIVERSHIP

Salford Council's outstanding loan to the old Salford Reds rugby club company, £1million of which was secured by a deal related to The Willows that even the Council's legal people called `creative financial manoeuvres', looks set for trouble.

Godliman Watson Homes Limited, which `owns' The Willows land is in receivership, its building site at Albert Park is derelict and companies say they are owed thousands of pounds by GWH Ltd, of which former Reds director Robert Iain Watson is a joint owner.

Full details here…

Salford City Council loan deal with Salford Reds

click image to enlarge

The Willows, former home of Salford City Reds, was by now supposed to be sporting new housing which would go some way to pay back a £1million loan given to the old rugby club by Salford City Council back in 2011.

But today the site lies derelict and the whole Willows site, owned by Godliman Watson Homes Ltd (GWH), is in the hands of a receiver trying to recoup some of the £2.2million owed to the Co-op Bank which has first charge on the land.

"We can confirm that a receiver has been appointed for Godliman Watson and it will now explore the options available for the site in conjunction with the Bank" a Co-op spokesperson confirmed "Any decisions regarding the future of the site would involve the receiver working with the Council planning team."

The Willows land, so far, has not been put on open sale and, as yet and contrary to other reports, there are no buyers. The Salford Star understands that the Co-op will be lucky to get all its money back from the eventual sale...

…Which is bad news for the John Wilkinson Pension Fund that has a second priority £1.7million charge on the land. And Salford Council which has the third priority charge for around £1million… a charge which its own secret report stated would have "clearly no value" and would be "financially worthless".

The Willows fiasco was part of the most bizarre loan deal Salford Council ever did to keep Salford City Reds in business. As well as the `third priority charge' with "clearly no value", the Council also entered into a `Development Agreement' with Godliman Watson Homes whereby, as each house on the Willows site sold, a proportion of the sale value would go to the Council to pay back the loan taken by Salford Reds. The connection was that Robert Iain Watson was a director of the Reds as well as Godliman Watson Homes.

The 2011 secret Salford Council report noted "There are clear risks for the Council in seeking to re-coup its lending to the Rugby Club by linking debt repayments to these property transactions, particularly in weak market conditions"; while its Legal team stated that "There appears to be some creative financial manoeuvres here"…

The whole deal depended on "market conditions" and GWH actually building houses on the site. With the receiver now trying to flog the land, the `development deal' with GWH is absolutely worthless. And there now appears only two options left for Salford Council to re-coup its £1million…

It can pursue the former directors of the Salford City Reds – John Wilkinson and Robert Iain Watson (of GWH) – to pay back the loan personally which was secured under the deal... According to the Council report they "could therefore be pursued to insolvency by the Council seeking to re-coup its lending to the Rugby Club if the above proposed development agreement with GWH does not lead to a successful outcome".

The second option is to wait for new Reds owner Marwan Koukash to cough up by 2028. Under a Company Voluntary Agreement (CVA) agreed with the old Salford Football Club Company (1914) Ltd, Koukash has agreed to pay all the debts – including £1.5million in total owed by the old club to Salford Council. Except that £1.26million of the loan is spread until 2038 with no interest payable (see here)

The Salford Star asked Salford Council a month ago what it intended to do to recover its loan. Would it pursue the former directors of Salford City Reds for their personal guarantees? Is there any chance of the new buyer of The Willows land agreeing to former terms and handing over a return to Salford Council on houses it builds? Is the Council intending to wait for the new owner of Salford Reds to pay back the loan, as agreed?

As usual Salford Council didn't respond. It might even be thinking – God help us! – of buying the land itself to pay back its own loan (?) as, in September, the Star found a note buried deep in the Council's website titled `Possible Acquisition of land at Willows Road/Kennedy Road'… `Willows Road leasehold acquisition and grant of development agreement'.

Meanwhile, if the Council wants to sue GWH for the money owed, it had better get in the queue. Local businesses have been in touch with the Salford Star saying they are owed thousands of pounds by Godliman Watson companies and that County Court Judgements have been issued, including visits from Bury County Court Bailiffs, with little success.

One local businessman put a figure of almost £4million owed in total by GWH, including monies to Salford Council and John Wilkinson, and other suppliers and consultants. A director of PDB Ltd, which was working on GWH's Albert Park View town house scheme on Great Clowes Street in Broughton, said that GWH director Robert Iain Watson had "left me and my family in a desperate financial situation" following the failure to pay him thousands of pounds, for what was the culmination of two years worth of work and drawings.

All building on the GWH Albert Park View development has now stopped, with houses a quarter complete, and there was nobody manning the site this week. The Star understands that GWH has made numerous staff redundant, some of whom are seeking redress over failed salary payments via employment tribunals. Meanwhile, phones are not being answered on GWH's official lines and the company has failed to return any Salford Star calls and emails.

While GWH Ltd is not officially in liquidation, it does appear to have ceased trading. Companies that are owed money told the Star that GWH is now looking to secure a CVA in respect of its debts.

Companies House records show that Godliman Watson Homes Ltd and another company, Godliman Watson Limited, have failed to produce accounts due last June, and annual returns due in October and August respectively.

Godliman Watson Homes has six outstanding charges against it, while Godliman Watson Limited has four outstanding charges against it.

Another company, Godliman and Watson Investments Ltd, also has accounts overdue since June and has eight outstanding charges against it.

Meanwhile a new company, Godliman Watson Holdings, was set up in December 2012, while Godliman Watson Property Services was brought out from being dormant in the same month. Both have members of the Watson family as directors including Iain Robert Watson, while an unincorporated company, Watson Homes, also seems to have appeared.

With such a chequered list of companies and history, it's amazing that Salford Council continued to bend over backwards both for Salford Reds and for Godliman Watson Homes…

Firstly the Council continued to support plans by Watson and John Wilkinson to turn the Mansion House in Buile Hill Park into a country hotel for five years, even extending expired planning permission despite, apparently, no actual money changing hands to secure a sale. All this while a £3million National Lottery bid to upgrade the park was rejected because of the hotel plans (see here)

And secondly, Salford Council agreed to waive Section 106 monies owed when GWH put in a planning application for a further six town houses to complete its Albert Park View development. From the original figure of £141,597 cited, GWH paid only £77,880.

The Section 106 charges were dropped because of financial `viability' issues, plus further reasoning that two listed buildings were brought back into use, and that "the proposed development would enhance the street scene and improve the current setting of these buildings".*

Thirdly, Godliman Watson Homes was further supported by Salford Council to create its Spark Studio on Great Clowes Street, with a £135,000 capital grant. Other public money for the project came via Europe (ERDF) £255,000; The University of Salford £150,000 (26 year lease of offices) and £650,000 from Contour Homes, via a £420,000 grant from the Government's Homes and Communities Agency.

Having received so much public money and favours, Godliman Watson, it seems, has not been passing on payments to its suppliers who are owed thousands of pounds.

"The debts owed to local people have been outstanding for many months, possibly years, long before GWH was taken into receivership" one local businessman told the Star "Is Mr Watson going to do the right thing and sell his own half million pound home to clear the remaining debt - debt which as Director of his companies, he was wholly responsible for accumulating?

"The alternative" he added "to dissolve the companies with all remaining debts left unpaid, is one that will cause great hardship, suffering, ill feeling and potentially further company bankruptcies for all the innocent parties caught up in this situation."

Meanwhile, Salford tax payers must be wondering if they will ever get back the £1million loan given to Salford Reds and secured by Robert Iain Watson's company's non-development at The Willows.

* Local business people originally involved in the Albert Park development are adamant that the planning application for the six town houses was submitted to Salford Council after work had actually begun on the properties several months earlier.

** The Salford Star understands that auditors are currently examining the circumstances surrounding Salford City Council dealings with Salford City Reds rugby club. So far, there have been no reports published.

See also previous Salford Star articles...

* Salford City Stadium loses Salford from its title (click here and scroll down for Willows details)

* Salford Council's Tangled Web of Loans and Deals with Salford City Reds and its Directors - click here

* Salford Star Loans Questions to Salford Council met with Jibes from Press Office - click here

bandy boy wrote
at 12:53:08 on 01 May 2014

I heard they've started a new company now. Watson-homes.co.uk Seems they've lost interest is us residents, left us in amongst all the mess on site, although thankfully not a financial mess, like all those poor souls who had worked with Godliman-Watson Homes.

bandyfields misery wrote
at 22:20:31 on 08 April 2014

Why did the road have to be private if it had been council it would be maintained. Why dont contour homes do something they charge enough service charge to the apartments and supposed to be inflicted on the houses at some stage. People pais a lot of money for homes on here 5/6 years ago now they are 130k and its full of rentals including propertys owned by iain watson still renting property to Salford Reds rugby players !! Wheres their rent going.

niel and jay wrote
at 20:30:44 on 22 February 2014

Yeah the robber took £209,000 for one of his houses on Albert Park View 6 yrs ago for what was gonna be a vision of the past victorian street with cobbled roads victorian lights and memrobilia to enhance the theme. What have we got ? Unfinished houses at both ends of the development a crumbelling tarmac road and a grim look on as house after house goes up for sale the lastest been sold for only £141.000 them poor sods lost 50 grand. Were all trapped and never gonna get out.

Kenneth Mckelvey wrote
at 09:25:04 on 27 December 2013

I just cannot Understand why so many construction sites in Salford are left or only half finished/ I was always asked for a finishing date whenever I took out a contract/ you gave the Developer a price and an estimated finishing date if not completed on time you went into what was called the penalty clause Which was extremely expensive to the builder plus you had to carry enough insurance to cover any such problems/ So why Langworthy and Albert park sites are not finished something radically wrong

Schwyz wrote
at 19:42:30 on 24 December 2013

Spare a thought for us poor sods living in Albert Park View Development..NOT heard a thing and unsure when the place will be finished..We come way down on GWH's list of priorities...Some of us have lived SEVEN YEARS on the site....

mary ferrer wrote
at 08:02:02 on 15 December 2013

I wonder how much Wilkinson/Watson owe the people of Salford,because I am sure its a lot more that we have been told.I knew some years back this was all going to go belly-up,but at the time no one would listen to me. I get so mad when I think what we could do with this money for the people of Salford. We are up to our neck in debt,with loans and handouts to these two and others. We have a 22 million load that will take years to pay back and little or no hope of seeing any money from these two.It the people who are running this city worked for a big company and gave loans out like Salford council have to these two. The whole of the council would be signing on, on the Monday. But the bit that makes me laugh is WE have the abbility to send them on their way next May,but we won't,they will carry on getting into bed with Peel and others like Wilkinson and Watson and WE will allow it to happen.they carry on shitting on us from the civic.They must be laughing their heads off at the bloody idiots who vote them in year after year.

new fish wrote
at 17:19:05 on 13 December 2013

Here's a great soundtrack to go with the above story, unfortunately, didn't have a strangeways soundtrack, so shawshank came second!LOL http://www.youtube.com/watch?v=Gi6OENwcLU4&list=PLFAF3E4483AD80377 "His judgement commeth"......

skimbleskamble wrote
at 17:18:56 on 13 December 2013

#Robert Ward I would be stunned if Salford Council came up with any real substantive assistance for Swinton. Ever the politicos the Council will tell people they are doing everything they can but that will just be an exercise in window dressing. As a token gesture they might pay for few pairs of socks but otherwise diddly squat.They probably don’t actually even want to extend that much help but can’t tell you that of course. This is SALFORD Council if you didn't know . In spirit they've only ever really considered the original Salford bit merited their attention, promotion and support. The bits tagged on in the ‘70’s – Swinton, Irlam, Worsley , Eccles , etc they don’t matter. They never have done.

sad affair wrote
at 04:34:57 on 13 December 2013

Going by the feeling shown in the Salford Star readers comments, I don't suppose there'll be too many people visiting the directors of g&w ltd if they all end up in Strangeways...

andrea wrote
at 20:29:50 on 12 December 2013

A question for Mr Godliman and Mr Watson. Why did you keep trading, keep asking people to work for you when you hadn't the money to pay them?

Ticket watcher wrote
at 20:29:45 on 12 December 2013

@Robert Ward Sorry mate Swinton ain't getting nowt. How many Cllrs have season tickets there????

thomas wrote
at 20:29:33 on 12 December 2013

John Wilkinson must be absolutely seething about his £1.7 million loan to Mr Watson. If this is how friends repay you, god help your enemies!!

Victor wrote
at 20:29:11 on 12 December 2013

@skimbleskamble, I actually really hoped that you were a local Cllr spamming this comments page with your ideas. But then I realised that most of what you wrote was common sense and what the people of Salford want, so therefore I apologize for insulting you with a title such as Cllr. Although when you say "The political waters of Salford are as murky, stagnant and still as stretches of the Manchester Ship Canal." I do think you maybe wrong, have you seen how much Salford council have Paid for their "AERATION" project in the very canal that Peel own? Yes that's correct Salford put out a contract to clean up Peels shit. Says it all really, will they wipe my arse if I ask them too?

andrea wrote
at 20:28:48 on 12 December 2013

A question for the council; why didn't the planning authority take enforcement action against the developer for the new town houses started at Great Clowes Street, months before the planning application was submitted?

Robert Ward wrote
at 16:06:01 on 12 December 2013

Seeing as Salford Council have got or found the money to bail out Salford RLFC then surely they MUST step in and help Swinton Lions RLFC seeing as they are on the verge of going under for good,or is that too much to ask for?To me if Salford Council help one in their hour of need and not the other then that smacks of favouritism and corruption.

skimbleskamble wrote
at 16:05:56 on 12 December 2013

I would love to see the paper trail and viability for this Willows deal because to use building parlance 'i doubt if it ever stacked up’. If i read it right Salford Council were supposed to get their money back as units were sold off - which i’m assuming means private sale. You would have been trying to sell this site for years to get yer money back. One of the reasons the Reds wanted to ship out was because the area had become distinctly undesirable. The Willow’s is really council housing /housing association territory – not high value spec building land. I doubt however if corruption is at the heart of this though it might be a side effect as these financial tricks came to grief. But partisan and incompetent misuse of public funds probably is. Reds backers and elements within the Council had conspired to make Salford Red’s survival and advancement a priority over other demands on the council’s resources. No one should be shocked about this. The controlling Labour group has been running the show since the modern City of Salford came into being. They have became susceptible, amenable and in cases very simpatico to certain vested interests .The political waters of Salford are as murky, stagnant and still as stretches of the Manchester Ship Canal. They are a modern day rotten borough. Salford City Council are surely worthy of an award from Private Eye. They deserve national recognition for their own particular contribution to the art of council dodgy dealing.

inner light wrote
at 16:05:48 on 12 December 2013

Why does "power" and "business" attract so many pathological inveterate liars and psychopaths? Egotistic people genuinly believe they are good, honest, loving, trustworthy and upstanding citizens, doing their "good" deeds for the better of mankind. Mankind was given the ego to lift us when we're feeling down (e.g pull your socks up, everything will be ok etc) The ego is not for the purpose of ignoring our moral conscience, to the detriment of all living things around us. The ego removes us from reality and what is actually happening and being said to us, it allows us to ignore the opinions, views, beliefs of all others that don't fit into the egotistical view of the world, it stops us from realisng our wrong doings.

faust wrote
at 16:04:26 on 12 December 2013

Salford Star, have you contacted the police/trading standards about this information? This looks like a case for the police to investigate and if applicable, to seek custodial sentences for those who have committed any criminal offence. Like fraud or trading without having the funds to pay people.

steve wrote
at 16:04:02 on 12 December 2013

Well, this is not a boat accident! And it wasn't any propeller; and it wasn't any coral reef; and it wasn't Jack the Ripper! It was a shark. Sound familiar?

mick wrote
at 16:03:27 on 12 December 2013

How about a stint in Shawshank, Chateau d'lf, or nearer to home, Strangeways...

Paul wrote
at 07:37:49 on 12 December 2013

When salford rugby split in two from old salford rugby to new salford rugby I knew from that moment this was going to happen and it has. This Salford labour council has a lot of questions to answer and they can't blame anyone else, was it corruption or finnancial incompetence on behalf of salford labour council, still want to vote labour at the next election, like I said before couldn't run a school tuck shop with out bankrupting it, bunch of incompetent b*stards . Hope the people are not going to suffer with less services because of this, the councillors involved with this mess are going to fall on their sword for this

skimbleskamble wrote
at 21:42:32 on 11 December 2013

Salford City Council will just write this money off eventually. In fact i doubt if they ever seriously expected it back in the first place. After all they would have carried on chucking even more money at this problem if allowed. All these shenanigans will have been deemed worthy and justified at the time because everything and anything had to be done to help preserve the single most important institution in their entire world ie Salford RLFC. Tis the prerogative of our esteemed civic leadership to spend the taxpayers money on their pet projects. The great unwashed and hoi polloi must accept that the price of having such magnificent local governance is that the ruling cabal and all their friends and cronies get to indulge themselves at our expense. We should be honoured to have such greatness at the helm. Salford is being run like some parish council in rural Ireland.

Robert Ward wrote
at 21:42:02 on 11 December 2013

I am not in the slightest bit surprised.

bob the builder wrote
at 21:41:48 on 11 December 2013

It's always the good, honest folk that loose. Id conclude from the article that Godliman and Watson (Robert Iain Watson and co) owes a lot of people a lot of money. Money for loans and money for work undertaken by local people, tradesmen etc Money which people have worked hard for, to help feed their families and keep a roof over their heads.

amity place wrote
at 21:41:34 on 11 December 2013

Building Regulations always follows AFTER a planning approval has been granted on bigger schemes like, the 6 town houses scheme at 230 Great Clowes Street (non-permitted development schemes). In this case the houses were being built months before a planning application had been submitted. Thus, did the council inspect the works for building regulation compliance without a planning approval in place? Either, A) no building control inspections took place or B) the houses were being built with some kind of informal building control inspection (no fee paid to Salford Council) and the building control inspector hadn't informed his planning department, as they would usually do. Previous planning approvals on the site are not applicable where extant, and therefore cannot be used to justify unapproved development. If the building inspector had informed his planning department as normal, then the planning authority would have been able to take enforcement action against the developer or requested a retrospective application, but this would not necessarily guarantee an approval for the works. Interestingly, it is apparent on the application form submitted in February 2013 to Salford Council, that the developer had clearly stated on the form, which is signed to be true and accurate, that works hadn’t already started when the application was submitted, which is clearly not true and accurate. This could be just a “slip of the pen”, but slips of this magnitude (whether work had started or not) would normally be challenged by the appointed planning officer once it became apparent on their site visit, that works were in fact already well under-way.

sad affair wrote
at 21:40:58 on 11 December 2013

It never ceases to amaze me how much "business" corrupts peoples souls.

police squad wrote
at 21:40:43 on 11 December 2013

Shouldn't this article be sent to trading standards or the police? Surely, all this debt has been ran up from trading whilst unable to pay people??...As far as I understand, asking someone to do a job for you without having the money to pay for them is a criminal offence.

tom wrote
at 14:26:23 on 11 December 2013

if you go back thru my posts I predicted something like this when I said no more bail outs. I am not a big rugby fan but myself and 100s of other Salford people like me have backed the club over the years. I bet you any money there is more to this than meets the eye,an investment group will be behind this waiting for a cheap deal at salford tax payers expense....wonder who it will be. watch this space....Salford council are a load of dummies not sharp enough to play financial games with the big boys...

White wrote
at 14:26:19 on 11 December 2013

In view of this and other past reports of spending by Salford Council, one is forced to the conclusion that they are remarkably profligate with what is OUR money. For the benefit of the mayor, any deputy mayors and councillors who read this; profligate means ‘ wildly extravagant and wasteful’.

They never listen wrote
at 14:26:15 on 11 December 2013

I raised concerns about the Great Clowes St site with Councillor Merry, as far back as Autumn 2008. He responded by saying that the development would be completed. This council pick some strange partners.

Info wrote
at 09:51:17 on 11 December 2013

https://www.salford.gov.uk/callins.htm Have a look at report 8 at the bottom of the page it sums up the ignorance of those steering the ship to a tee.

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