Government of Gibraltar
Press Office

No.6 Convent Place, Gibraltar                Tel: 70071     Fax: 74524

Press Release

No: 85/2004
Date: 22 April 2004
crestlogo.jpg (45837 bytes) GOVERNMENT OF GIBRALTAR
PRESS OFFICE
No.6 Convent Place
Gibraltar
Tel: 70071; Fax: 7452
4
 
Details of the Lands Transfer Agreement

 

Attached is the statement by the Chief Minister in relation to details of the Lands Transfer Agreement between the Government of Gibraltar and the Ministry of Defence signed on 20th April 2004 by the Chief Minister and the Secretary of State for Defence, Geoff Hoon.

 

Statement by the
Chief Minister
Peter Caruana

in relation to details of the
Lands Transfer Agreement

between GOG & MOD
signed on 20th April 2004
by the Chief Minister and the
Secretary of State for Defence, Geoff Hoon.

Thursday 22nd April 2004.

 

For many decades successive Gibraltar Governments have recognised that the transfer of surplus MOD lands and buildings is important to enable and facilitate the social, economic and infrastructural development of Gibraltar.

In more recent years progress in achieving substantial land transfers has been prevented by, mainly, two factors. The MOD’s need to decide upon its estate requirements, and, the policy of successive Gibraltar Government’s to refuse (given the economic effects of MOD cutbacks) to pay for lands transferred, even in circumstances where the current Lands Memoranda (which regulate MOD/GOG lands transfers generally) require such payments.

Accordingly, in order to break this impass, whilst preserving GOG’s position in relation to the Lands Memoranda, GOG invited MOD at the highest level to engage in a lands negotiation outside the scope of the Lands memoranda, and without prejudice to the position of the parties in that respect. The Agreement signed on Tuesday is the fruit of that negotiation.

During these negotiations the Government has been mindful of certain important issues, as follows: -

(1)                Not to accept lands, and relocate MOD facilities, in a way which confines MOD activities territorially within Gibraltar such that would make the Military Base “red line issue” significantly easier to overcome in the context of any future joint sovereignty initiative between UK & Spain;

(2)                Not to accept lands which resulted in justification for job cuts in the MOD directly employed labour force or in the WSM workforce.

(3)                Not to accept land which undermined the Trade Unions’ and the Government’s opposition to privatisation and contractorisation of MOD Activities and labour;

(4)                The need to ensure that the interests of the Royal Gibraltar Regiment were properly safeguarded, whilst, at the same time, obtaining important benefits for Gibraltar as a whole.

This Agreement acheives and safeguards all the above.

The following are details of the Agreement.    Agreed transfer dates are given in brackets: -

1.       Residential Accommodation: Individual houses.

                  (1)                Bruce’s Farm (April 04).
(2)                Ince’s Farm (July 04)
(3)                Humphrie’s Huts (April 04)
(4)                Lind House (April 04)
(5)                New Aloes (April 04)
(6)                Rock Cottage (April 05)
(7)                St Bernard’s House (June 05)
(8)                Beaulieu House (June 05)
(9)                19 Scud Hill (Sept 06)
(10)           Rose Tree Cottage (Sept 06)
(11)           The Elms (Feb 06)
(12)           Lower Elms (Feb 06)
(13)           Loquat House (April 05)
(14)           St Stephen’s House (Feb 06)
(15)           Mount Barbary (April 05)
(16)           Lancashire House (June 05)
(17)           John Snow House (Jan 06)
(18)           Suffolk House (Jan 06)
(19)           Surrey House (Jan 06)

These houses have a very substantial resale value and it is the Government’s intention to sell them and to reinvest the proceeds in building more affordable homes for first time local home buyers.

2.       Residential Accommodation: blocks/multi-dwellings.

(20) Rosia Court                      (32 units)      July 04
(21) Sandpits House              (12 units)      July 06
(22) Carter House              (12 units)      TBC
(23) Tangier View                (12 units)      Mar 08
(24) South Pavillion OMQ          (9 units)      Aug 05
(25) Europa Pass Battery       (16 units)       TBC
(26) F Block ONH                 (4 units)      July 06

These units would have a lower market price than the individual houses. But in total have a substantial capital value. It is the Government’s intention to sell these houses to local home buyers, and to reinvest the proceeds in building more affordable homes for local home buyers.

3.       Chilton Court

(27) 2 Blocks (overlooking Queensway) comprising 32 flats. These flats will be added to the Government’s housing stock for rental to people on the housing waiting list on the same terms as Edinburgh House.

4.       Sites for Development

(28)       Cormorant Wharf (April 04)
(29)      Fleet Pavilion (April 04)
The transfer of this site will enable the Government to build a new first and middle school to accommodate demand in the Town and Westside areas

(30)                    The Coaling Island, basin and berthing strip.
This transfer enables the Government to proceed with the relocation of the small boat owners. (Pending reprovisioning)
(31)                    No4 Dock. (Pending reprovisioning)
The transfer of this site enables major additional development opportunities to proceed, including a large new reclamation in front of Rooke and the RGYC, creating further development land and the construction of a new road linking Westside Reclamation and Queensway.

(32)                    Land at Navy W/T Station (April 04)
(33)                    Queensway Club Swimming Pool area. (April 04)
(34)                    Site of Thompson’s cottages/Naval Hospital Hill (April 04)
(35)                    North Front Ariel Farm site/Eastern Beach (April 04)
(36)                    Dutch Magazine site (except the part occupied by MOD laundry, unless relocated) (April 04)
(37)                    MOD Medical Facility, Queensway (when MOD build new hospital)
(38)                    RNH Europa Road (when MOD build new hospital)
(39)                    Gibraltar Squadron facilities (subject to relocation at Gunwharf)
(40)                    Navy W/T Station. (Aug 10)
(41)                    Rosia Tanks (April 04)

In its recent election manifesto the Government committed itself to ensuring that some development sites would be made available to private developers on condition that they built low cost, affordable housing for first time local home buyers. This will result in still more such homes being built.

5.      Industrial Assets
(42)                    MOD ex Motor Transport  Garage (Opposite Air Terminal).
Government intends to use this existing facility as the depot for the new bus service.   (April 04)
(43)                    The Shell hangar at the airfield. (Pending reprovisioning)
(44)                    Large area of land to the North of the airfield.  (April 04)
(45)                    The old MOD Sullage Plant at North Mole. (April 04)
(46)                    Williams Way OFD and Orillion Gap Tunnel. (April 04)
(47)                    Coaling Island Cold Store. (April 04)
(48)                    Eastside (disused) fuel depot (April 04)
(49)                    Eastside Jetty and related instalations. (April 04)
(50)                    WSM Stores, Waterport. (July 04)
(51)                    Ex-Naafi Stores, Waterport. (Aug 07)
(52)                    Commercial Port use, for account of GOG, of Southern (MOD) half of detached mole. (Immediate)

6.      Other Sites

(53)                    The freehold (subject to existing long lease) of La Rotunda, Winston Churchill Avenue; (April 04)
(54)                    The freehold (subject to existing long lease) of Britannia House; (April 04)
(55)                    The freehold (subject of 150 leases in favour of MOD & RGR) of the remaining blocks of Chilton Court. (80 flats) (April 05)
(56)                    The MOD Eastside Water Catchments. (April 04)
(57)                    Middle Hill, Upper Rock. (April 05)

7.      Other Social Facilties/Assets

(58)                    Ownership of the road leading to Western Beach. (April 04)
(59)                    Command Education Centre, Queensway/Bowling Alley. (April 04)
(60)                    Queensway Club. (April 04)
(61)                    Central Hall. (April 04)
(62)                    Navy No1 Ground (Sept 04)
(63)                    Land for expansion of Cemetry. (April 04)
(64)                    A sea-shore strip of land to link Camp Bay and Little Bay. (April 04)
(65)                    Reduction in waters designated as Admiralty Waters. (Pending Reprovisioning)

8.       Other Issues

(1)    Commercial Lettings

In the recent past MOD has been letting premises to commercial entitities that competed in the local market. These companies operated in a lower cost environment and therefore competed unfairly with companies established in premises outside the MOD estate. In future such companies will pay rates to GOG and rent to MOD equivalent atleast to their Net Annual Values for rating purposes. Tenancies must be registered with The Rent Assessor, and all GOG authorities and inspectors will have full access. This will eliminate the commercial advantage over competitors.

(2)    Pending documentation

This agreement allows the documentation of the transfer of Cumberland and Tower sites, Rosia Road, to proceed, making two further sites available for devlopment.

9.   In exchange for all the above, GOG has agreed the following in favour of MOD: -

(1)  As is usual practice historically, facilities for which there is continuing need by MOD will be reprovided by GOG at its expense as follows: -
(a)      Weather Balloon Station, airfield.
(b) 100 car parking spaces for MOD at Commonwealth Parade (until construction of proposed underground car park by GOG at Navy 1 Ground).
(c)             Gibraltar Boat Squadron to new finger jetty at Gunwharf.
(d)             MSG tugs & boats from Coaling Island to Gunwharf.
(e) Water sports and other facilities from No4 dock to Gunwharf. Gunwharf site thus reverts to MOD.
(f)                  Conversion and upgrading of five existing blocks at Four Corners estate into 15 flats.

 (2)             250,000 annual reduction in MOD payment to GOG in lieu of Rates (CILOR) (This corresponds roughly to the exemption of the airfield and the Bufadero training grounds to which GOG does not provide services).

(3)        Return to MOD of current airport car park, which GOG will reprovide next to Air Terminal.

 10.   Royal Gibraltar Regiment

 During the last few days there has been a substantial amount of comment based on misconception and incorrect facts and speculation. Far from being about depriving the Royal Gibraltar Regiment of housing for present or future recruits, the Government’s purpose in the negotiation has been to secure that housing for the Regiment indefinitely, thus providing the Regiment with permanent security, so that it can not be withdrawn by MOD in any future spending review.

The issue in the deal is not the question of whether MOD stops providing housing, but rather how financial value can be given to MOD without affecting the housing issue. To understand the logic of this it is necessary first to understand UK Treasury Accounting Rules.

Under UK Treasury Accounting rules which apply to MOD, the MOD is obliged to pay in cash out of its Gibraltar operating budget every year, a sum of money equivalent to several percent of the book value of its property. This reduces the cash budget available for spending on actual MOD operations. By transferring the freehold of the property to GOG the MOD local budget avoids this loss of spending power.   It is in Gibraltar’s economic interests that the local MOD spendable budget should be as high as possible.

But this does not mean that MOD will cease to provide the housing or that MOD ceases to be the landlord of its RG soldiers. This is because, as part of the deal, GOG will lease back the property for 150 years, free of rent. Therefore the transfer of property is technical only, because it is leased back to MOD for 150 years. A lease for 150 years is what private home owners in Gibraltar get.

In order to give the Gibraltar Regiment long term protection in respect of housing for its soldiers, GOG has opted (in close consultation with the Regiment) to give the 150 lease to the Regiment itself. The Regiment will then in turn give another 150 lease to the MOD. MOD, as 150 year lease holder of these Chilton Court blocks will then  continue to let the flats to the Regiment’s soldiers on existing terms. These arrangements therefore represent no adverse change whatsoever to the regiment’s soldiers.

However, because the Government’s lease will be to the Regiment (who then lease – on to MOD), if MOD ever seek to withdraw the housing from Regiment soldiers, the MOD’s 150 year lease of the flats reverts to the Regiment, which can then keep the housing facility in place indefinitely.

Furthermore, an agreement has been reached in relation to the Repair and Maintenance of these flats.

The Royal Gibraltar Regiment considers, rightly, that these arrangements are very positive, because without adverse effect on soldiers (who remain MOD tenants) the Regiment keeps its housing entitlements with unprecedented security for the next 150 years.   The Government is delighted to have been able to support the Regiment in this very substantial manner.

Conclusion

 

Finally, the longstanding Government policy of Lands Memoranda, the quirks of UK Government department accounting rules, and the MOD’s desire to assist Gibraltar in releasing land for continuing economic and social development, have combined to achieve for Gibraltar a package of land which has a value far in excess of the relocation costs to be  undertaken by GOG.   This is in addition to the social, housing and economic development opportunities provided by the transfers.

We are receiving a total of 19 high value residences, and 97 less costly housing units, all of which we shall sell; 32 flats in Chilton Court which will be used for Government housing stock rental; 14 development sites; 11 industrial sites; 8 sites of leisure, social and recreation value; and five other pieces of real estate.

We shall be able to build more homes.   We shall be able to build a new school and a new road.   We shall be able to carry out substantial new reclamation projects and to improve social and leisure facilities; we shall be able to improve commercial premises and working conditions and continue with our policy to de-industrialise the Devil’s Tower Road area; there are new sites for non residential economic and industrial development.

 This is the largest ever single land transfer package.   It has huge economic and social development significance for Gibraltar.   We are delighted to have been able to achieve it, without adverse impact on MOD jobs or operational activities.   Government will now begin the job of planning the use of assets as soon as they are handed over.