Tynwald has voted overwhelmingly to support a plan to sell the Nunnery for £5m to a company now leading a project to create an IT centre of excellence.
Economic Development Minister Laurence Skelly MHK told Tynwald it was a ‘risk worth taking’ but that all reasonable measures had been taken to safeguard the government’s interests should the project not succeed.
He explained that a covenant would restrict usage of the site and that the terms of the deal would ensure that, if the site was subsequently sold for more than £5m, the Department of Education and Children would get the balance up to a cap of £2m.
The court heard that the original concept for an International Centre for Technology was devised by the Manx Educational Foundation, formed in 2011 as a Manx charity.
MEF had been asked to secure £12.5m of external funding as a condition of any sale.
But Mr Skelly told Tynwald that the funding model had changed. The plan is now to sell the site for £5m to a private company, International Centre for Technology Ltd, whose principal investor will be Business Doctor Investments Ltd with 75 per cent plus one share.
BDIL is the investment vehicle of the Business Doctor Consortium, a joint venture partner of Old Mutual, one of the largest insurance companies in the world, with 16 million customers, £290 billion of funds under management and which is owner of Manx licensed Nedbank and Skandia.
Island-based millionaire Philip Vermeulen, owner of Castletown Golf Links, is the most prominent member of the consortium. Mr Skelly said MEF and other private investors who invest would be minority shareholders. He said substantial due diligence had been undertaken but insisted no sale would go through until his department and Treasury were satisfied that process had been completed.
Mr Skelly said the government valuer was content the £5m sale price reflected the site’s value but that if there were no restrictions as to its use the value would be £7m.
He said two safeguards would be put in place to safeguard that £2m difference – a covenant restricting use with an option to pay £2m to remove that covenant subsequently; and a clause ensuring the DEC would be paid the balance if the site was sold for more than £5m, subject to a cap of £2m.
In addition, there is no longer a buy-back clause, which would have given the company double security.
‘Government interests are adequately safeguarded,’ Mr Skelly said.
He told Tynwald that no government department had given any commitments or undertakings to providing any form of funding support and any application for financial assistance grants would be handled in the normal manner.
The project was not dependent on taxpayers’ support, he stressed.
But some backbenchers expressed concern.
Bill Henderson (Douglas North) said it was a ‘hugely significant’ site. He said it was all very well ‘selling the family silver’ but that was not going to solve the island’s major issues.
Lib Van leader Kate Beecroft (Douglas South) said the deal was now a ‘very different animal’ and it should have gone out to open tender. ‘There are too many unknowns,’ she said.
Lib Van MHK Peter Karran (Onchan) tabled an amendment calling for the deal to be referred to the Public Accounts Committee.
Chris Thomas (Douglas West) raised concern about an option to sell nearly half of neighbouring Sangster’s field to ICT Ltd for £120,000 when it had been purchased by government for £1.2m.