First choice Gov HQ developer "wanted to add housing"

Thursday 25 March 2021

A plan to build a new Government headquarters in Broad Street fell through because the developer wanted to add housing to the project at the eleventh hour, it has been revealed.

This led to the Government rejecting C Le Masurier as ‘preferred bidder’ and choosing the plans of ‘reserve bidder’ Dandara, who will demolish, rebuild and own the freehold on Cyril Le Marquand House.

Details on why the Government was forced to make a sudden change in direction on its office modernisation plans in January were shared in the States Assembly on Wednesday. 

States Members were debating whether the decision to choose the Cyril Le Marquand option should be officially reviewed before building goes ahead. Under this ‘Plan B’, the Government's former head office in the Parade area will be demolished by Dandara.

The developer will then rebuild a new premises. It will own the freehold for 99 years and lease it to the Government for 25 years, unless the latter takes an option to buy the building, which it can first exercise after three years of occupancy.

Pictured: The Government is due to move back to the Cyril Le Marquand site - which it left in 2019 - in early 2024.

During the debate, Deputy Mike Higgins - who urged his colleagues to reject a call by the Scrutiny Liaison Committee to defer approval of the deal until they had reviewed it – gave details of briefings that States Members had received.

“The tendering process was carried out according to the best standards and procedures,” he said. “Developers were sifted according to set criteria until only two remained. There was a preferred bidder with the [31-41] Broad Street site, and a reserve bidder with the former Cyril Le Marquand building. 

“In accordance with the tendering process, the Government entered into detailed negotiations with the preferred bidder who, after entering into a formal agreement, then said they wanted to change their tender in a fundamental way.

“They were reducing the office side of it and wanting to put residential into part of the building. If the States had allowed them to do so, it would make a mockery of this tender and any future tender process, at it means any tender resulting in a contract could be undone immediately after it was entered into and renegotiated. 

“That could also leave the Government open to a lawsuit because they would have had to allow all other tenders to put revised bids in.”

At the end of the debate, States Members rejected Scrutiny's proposal by 24 votes by 19.

Explaining the proposal, Committee Chair Senator Kristina Moore said: “This is a major Government project: essentially the proposal that is now on the table turns a public asset into a liability, a liability of about £100m. It is quite extraordinary that the Government would think it reasonable to take such action without openly communicating it, is it not?

“And of course, we are all too aware of the other projects in the pipeline. A great number of people from all walks of life have contacted me and other Scrutiny members to express their intense frustration and concern over the cumulative effect of these projects. 

“Looking across the immediate capital spending plan over £1.5bn is planned to be spent, just as the island is starting on a road to recovery after a year of economic destruction and hardship for many.”

Pictured: A plan to move into a building at the Charing Cross end of Broad Street fell through not long after Ministerial approval was given in January.

However, Chief Minister John Le Fondré disagreed with Senator Moore’s assumption, saying: “Our current estate is costing us £7m more than it should so the present situation is more than a liability than an asset. Leasing the new building which will save us £7m a year while doing nothing will cost £30m more than the cost of this project.

“This project has followed a clear strategy which has been shared with Scrutiny, with approval of funding.

“A reduction in number in office properties has been discussed before the ministerial system was introduced. Reducing our estate from 21 buildings to eight has number of benefits: reduced footprint by more 45% from 385,000 to 215,000 sq ft, it will free up space in St. Helier for housing, it will reduce our carbon footprint and it will generate £7m of annual revenue savings.”

Following this rejected proposition, work is now able to proceed on demolishing Cyril Le Marquand House, which opened in 1982. The new office, reported to cost around £90m to build, is expected to be ready in the first quarter of 2024.