Hmmmmmmmmmmmmmmm court case, casino, arena, land deal. Messy
"Stalking horse" claim as £30m Leeds Arena case begins
5th October 2012
MONTPELLIER Estates has accused Leeds City Council of using it as a
“stalking horse” in the bidding process for a £70m contract to develop
the city’s new arena.
The company, run by Jan Fletcher, is claiming around £30m in damages
from the Council, accusing it of deceit, fraudulent misrepresentation
and breaching its duties under public contract regulations.
Leeds City Council "vehemently" denies the accusations and is defending
its reputation in a case at the High Court which began yesterday and is
expected to last seven weeks.
The dispute centres on the 2007 tendering process for the Leeds arena
when MEL put forward its 10-acre "City One" site, in Holbeck, as a
potential location.
MEL had already prepared and put in its bid when, in November 2008, the
City Council terminated the process. The council went on to build the
arena on a site off Claypit Lane which it owned along with Leeds
Metropolitan University.
Harrogate-based MEL is arguing the procurement exercise was "a sham" and
that, from not later than October 2007, the council planned to develop
the arena itself on the Claypit Lane site.
It says its land-holding was worth £38m in May 2007, but may now only be
worth £9.25m.
Charles Hollander QC, for the company, told the court: "It was induced
to enter and remain in the competition, and to retain the City One site
in its ownership, on the basis of untruthful representations by Leeds
City Council.
"Had it not been for the representations it would have sold the site and
done so prior to the collapse of the property market in late 2008."
Montpellier had planned to build a large casino on its land until a
shift in government policy made that impossible. However that meant
that, by the time of the procurement process, the City One site was
"oven ready" for an arena.
Mr Hollander claimed that the council's "Plan B" option had long been in
its mind but had been kept confidential and concealed from Montpellier
before and during the tendering process.
Leeds City Council will argue that its only interest in developing the
arena was as a fallback if the procurement exercise failed.
The council says that, as property prices collapsed during 2008, it
became apparent that there was a real risk that the bids which had come
forward might either not be 'value for money' or not be viable. It
maintains that it was only at that stage that it began considering
undertaking the development itself on the Claypit Lane site.
The case continues.
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