"NO" to £1 Million pound loan
At a full meeting of the South Cowal Community Development Company (SCCDC) on Tuesday the 20th of January 2015 it was unanimously decided both by the directors and steering group of the charity to decline Argyll and Bute councils offer of a one million pound loan. The local community had been hoping that in light of huge public support for the community buyout as well as the job creation scheme and inward investment, that the local authority would have agreed to a discount on the district valuers price of £1.75 million. Instead the local authority offered the community a commercial loan with interest. After much deliberating since the offer on the 18th of December the community group have decided to decline the offer on the grounds that not only is it financially wreckless but also totally immoral to burden the community with such a large debt, the group have also went on to say that they are seeking the advice of a Q.C. because they believe the offer of such a loan may actually be illegal.
Pulling out of the loan offer from the local authority does leave the community buyout project with very little chance of succeeding now as chairman of the group Alan Stewart explains;
"Effectively we have until the 31st of January to come to an agreement with the seller, Argyll and Bute council. They want 1.75 million for the estate but all our surevys works and experts value the property at a lot less than that. Basically in offering us a loan which our business plan clearly states we cannot repay has de-railed this process. The local authority have offered us nothing else except the loan. It's a take it or leave situation."
The group have since instructed their surveyors to carry out all the neccessary report work to obtain an official "Red Book" valuation of the estate, this will give the community buyout group an actual value for the property in todays current market. Alan Stewart continued,"We already have a fair idea of what the estate is worth and it's not 1.75 million. A lot has been made by the council of how we have asked for a million pound discount, this is simply untrue - the district valuer has valued it a 1.75 million but we have experts who have placed the current market value at a lot less. The council is effectively telling everyone that we want a million pound discount when the estate is not actually worth what they say and our experts will prove that. Once the true market value is know for Castle Toward they can now longer keep saying it's worth more. If the group were being cynical we would say that this discount is being used by the local authority as simply an excuse to prevent this buyout from happening."
Argyll and Bute council are now in reciept of the community groups letter declining the offer of a commercial loan, it is now up to both parties to see if they can find a way forward before the 31st of January, if not, under current legislation, the community buyout will cease and cannot be restarted.
Further Developments - January 24th 2014
Since publishing this story the local authority, Argyll and Bute council, has declined the local community groups request to re-negotiate the £1 million pound commercial loan offer. A motion was raised at a council meeting asking for the loan to be reconsidered due to the community groups insistance that it would not be possible to repay such a large amount. The motion was defeated and the community group have only the choice of accepting the loan or closing down the community right to buy of Castle Toward on the 31st of January.