Sunday, 28 September 2008

"Well he would say that, wouldn't he"

Mandy Rice Davies as she leaves the court, famously saying "well he would say that wouldn't he" in retort that Lord Astor denies what she is saying!

There are rumours going about that Mountgrange are to pull out of the Canongate which they refer to as Caltongate - a little birdie told us that they don't have the money or investment.

However, at the Republic we have concerns that in this economic environment that Mountgrange will demolish further parts of East Market Street and New Street, to land bank it and hoping for the economy to get on its feet. A bigger and wider empty brown site really is not needed or wanted particularly in the World Heritage Site - it would be a disaster and cannot be allowed.

Have Mountgrange got the finance for their project? Further demolitions should not be carried out without knowing if the finances are secure? Sofitel may have a written agreement with the council and Mountgrange however they will not want to be surrounded by empty new builds that cannot be used. Sofitel is the hotel and conference centre however they are not funding or part of the "luxury apartments" or "luxury retail and offices".

The finance world is in free fall just now. Bradford & Bingley looks like it will have to be nationalised, HBOS has been bought out, finance companies and banks throughout the world are collapsing. I don't want to point out the obvious but who is going to finance Caltongate?

Mountgrange have told us it is a £330 million project. Where is the £330 million coming from? Developers borrow money to build buildings then sell them on. Where will they get £330 million from? And who are they planning (apart from Sofitel) to sell the rest of the development on to?

The council has sold the land off market for a cool £5 million however they do not get any profit share until the whole thing is sold. Some economists are saying that property is over valued by 40% - the council may see very little return for its investment - if indeed it goes ahead. The council is predicting brutal times ahead and it looks like Caltongate is their great hope to indicate that the capital city hasn't come to a halt - see here

However Mark Cummings Invictor PR spokesperson has vigourously denied rumours that Caltongate are pulling out, see here . However we have heard such denials before and in the immortal words of Mandy Rice Davies in th Profumo affair in the 1960s see here "well he would say that, wouldn't he?"