Hoylake Golf Resort – What’s in the Small Print?

What Are Wirral Council Not Telling Us?

Image of magnifying glass over paper contract

We are still seeking to clarify the situation regarding penalty clauses in the Development Agreement Wirral Council entered into in 2016 with the Jack Nicklaus Joint Venture Group (NJVG).

Under a Freedom of Information request, the Council initially refused to publish the Development Agreement. Subsequent to a complaint to the regulator ICO (Information Commissioner’s Office) and a threat of a First Tier Tribunal, the Council published part of the Development Agreement, although much of it was redacted citing the reason that it was “commercial and confidential”.

Since the May 2019 local elections, when politically the Council became ‘No Overall Control’ we have learnt that the Development Agreement contains penalty clauses which could, potentially, cost the Council between £15 million and £20 million, should they pull out of the agreement.

This came as a huge shock to both the public and most of the Councillors who were unaware that the previous Council Leader, and his Cabinet, had seemingly signed up to these penalty clauses in secret.

Indeed, on several occasions, the previous Council Leader Phil Davies, had reassured Councillors that signing that Agreement would not expose the Council to any risk.

A report to the Cabinet dated 7th November 2016, stated the Council retains at its absolute discretion, the ability to withdraw from the project should the Funding Strategy not prove to be acceptable to the Council.”

Furthermore, at a Business and Overview Scrutiny Committee Call-In meeting to discuss the Development Agreement, a senior Council official stated if the project fell at the funding and viability phase then the money that the council has invested would not be recoverable and similarly the money that the NJVG has already invested would not be recoverable.”

The Funding Strategy was finally submitted to the Council earlier this year, several years behind the original programme date. Part of this Strategy included the Council lending the NJVG £26million at preferential borrowing rates. In July 2019, both the Business Overview Scrutiny Committee and then the Cabinet unanimously voted to reject this proposal loan NJVG the £26million. The Cabinet has now recommended the scheme be privately funded on the open market rather than through Council borrowing.

Should the NJVG obtain private financial backing they can then submit a planning application. However, as the development would breach the Wirral Green Belt with a 160 + housing development, it would normally be deemed ‘inappropriate’, so the Developers will have to prove that ‘very special circumstances’ exist before planning permission could be granted. We can see no case for any exceptions to be made on such a proposal, either by the Council or, on Appeal, by the Government’s Planning Inspectorate.

Wirral Council has also recently declared a ‘Climate Change Emergency’ and building such a resort and a housing estate on a flood plain would make a mockery of the Council’s intentions to mitigate against future increasing extreme weather events. The NJVG has dubious financial history. This includes bankruptcy of their construction company which built the housing development associated with their golf ‘resort’ in Llanelli where a promised Hilton Hotel was never built. Therefore, we are optimistic that no financial institutions will be willing to invest in such a risky project at Hoylake.