Manchester landowner to sue GMCA over Renaker loans
Weis Group is taking the Greater Manchester Combined Authority to court, claiming it has breached the Subsidy Control Act in awarding two loans totalling £140m to the prolific Manchester developer.
Documents expected to be published by the Competition Appeal Tribunal will state that Weis Group believes the GMCA’s decision to provide Renaker with the loans has ‘distorted’ the Manchester property market, Place North West understands.
In total, Renaker and connected SPVs have received £500m from the GMCA’s housing investment loans fund. This amounts to more than half of the £940m handed out through the fund altogether.
Weis Group, owned by high-net-worth individual Aubrey Weis, claims the amount is even larger when all Renaker-linked vehicles are factored in.
A spokesperson for the Weis Group said: “While we cannot comment on the case itself, from publicly available information it appears that following the proposed loans recently approved by GMCA, these will bring total overall lending to Renaker by GMCA and its affiliates to £745m at state-subsidised lending rates, although full disclosure of the terms of the latest loans remains outstanding.”
The GMCA has previously denied that the loans are provided on favourable terms.
Speaking to Place North West earlier this year, former GMCA chief executive Eamonn Boylan said: “Everyone assumes that somehow this is cheap money. It is not. It is [at] commercial rates, effectively.”
Weis Group also contends that the GMCA is overexposed due to the amount it has awarded Renaker as a proportion of the fund as a whole.
The spokesperson added: “This case will examine whether there have been manifest breaches of the lending terms, including unusual overexposure to one entity. Under commercial lending norms the best practice for lenders is not to exceed 10% of its loan book to one borrower or group. In this case, from the information made available, it seems that this figure is closer to 70%.
“It will also examine the judiciousness of such unprecedented loans, given Renaker has made the case at planning committee that all of its schemes are ‘unviable’ and do not meet market standard profits tests.”
The most recent Renaker loans are the ones subject to Weis’ legal challenge.
They amount to £120m – with the potential to rise to £140m – for two towers providing upwards of 1,000 homes at Great Jackson Street and Trinity Islands. They were signed off at GMCA meeting in March.
A spokesperson for the Greater Manchester Combined Authority said the organisation is “aware of a claim submitted to the Competition Appeals Tribunal” regarding the loans.
“The GMCA has been delivering these investment loans to a range of developers for a number of years and we are confident in our processes,” the spokesperson added.
Renaker was contacted for comment.
Last year, Great Jackson Street Estates, which is controlled by Weis, took Manchester City Council to court.
The applicant sought the court’s consent to modify covenants attached to a lease it holds on a plot of land at Great Jackson Street.
Weis’s company has planning consent for two residential towers on the site, whose freehold is owned by the city council.
By modifying the covenants, GJSE sought to broaden the scope of what could be delivered on the site in terms of use.
However, the court dismissed the application.
I find it extremely ironic the statement from Weis concludes with the need for “transparency the city so needs” yet we know almost nothing about this mysterious property individual is and who’s approach is equally clandestine as Renaker’s agreements with GMCA. I think the people of Manchester have a right to know who all these people and companies are rather than hiding behind the parapet.
By js1000