Concerns over Churchgate project funding
FURTHER concerns have been raised over the viability of Hitchin’s Churchgate project, after figures revealed that contractors Simons made a multi-million pound loss over the past two years, and does not seemingly have the necessary money in place to fund the project.
The concerns, raised by town centre group Keep Hitchin Special, relate to Simons’ credit rating, which outlines that single credit applications of up to �150,000 a month - or a maximum credit of �1.8m per year - can be borrowed.
The group has said that it does not believe this will be enough to fund the town centre redevelopment project, which is estimated to cost around �50m.
Chairman Chris Parker told The Comet: “It does not seem like a sufficient amount - we’re talking about a �50m project here, and Simons has other projects on the go too.
“I’m concerned that the council are vulnerable, and I’m viewing this with some level of anxiety. They [North Herts District Council] were given assurances that the Simons group were strong.
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“We are quite worried about the finance and structure of the company, and whether or not NHDC are at risk.”
Anxieties also related to the fact that Simons Developments Ltd - the guarantor for Simons Developments (Hitchin) Ltd- turned a �4.6m and �3.6m profit in 2007 and 2008 respectively into a total loss of �4.71m in 2009 and 2010. The company also has a deficit of �13m in its pension fund.
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Mr Parker added: “Unless there is information to show that our concerns are not valid and public land and finance is not at risk, we call upon NHDC to cancel the development agreement they have with Simons.”
A spokesman from Simons Groups Ltd - which manages Simons Developments Ltd - said that the company was still confident it could deliver the project, despite the worrying figures.
A spokesman said: “The group year-end accounts show that Simons Group Limited has maintained a strong balance sheet with net assets of �14.7 million and cash of �16 million.
“A loss was made during the year due to a difficult trading climate and significant restructuring during the year, but directors are confident that the company is now in a better shape to face the challenges ahead in the trading climate and are confident of a return to profitability.
“The cash balance in developments dipped at year-end due to a large outstanding debtor which has been paid since the year-end and cash balances have since returned to the �3.5 million level.
“We remain fully committed to the Churchgate development and are working closely with North Hertfordshire District Council to deliver the project as soon as possible.”
Meanwhile, MP Peter Lilley has been listening to the concerns of residents in relation to the project, in an hour long meeting.
The Harpenden meeting, which was attended by Keep Hitchin Special, was said by members to have “gone really well”.
Mr Lilley was unavailable for comment at the time of going to press.