A recent financial collapse of the developer, Penrhyn Ltd, has raised questions about the implications for Conwy County Borough Council. The council has confirmed it will not suffer financial losses following the company’s liquidation. Penrhyn Ltd was involved in the redevelopment of land surrounding the Civic Hall in Colwyn Bay, where substantial financial commitments were made through various property deals.
The council vacated the Grade II Listed Civic Hall, along with other locations, in December 2018, relocating its staff to Coed Pella in central Colwyn Bay. In August 2021, part of the Civic site was sold for a housing development, while the remaining property was acquired by Parc Eirias Hotel Ltd, led by directors Robert Andrew Roberts and Ian Robbins. Initially intended as a hotel scheme, the project was later sold due to escalating transformation costs.
In 2021, a financial charge was placed on land adjacent to the former council offices as part of a loan agreement with Charles Street Commercial Investments Ltd. This arrangement followed the transfer of land from the council to Penrhyn Ltd. Additional charges were also documented for a property called Bodhaulog located in St Asaph.
As of September 2023, Begbies Traynor has been appointed as the voluntary liquidator for Penrhyn Ltd. The company’s statement of affairs revealed assets in land and property valued at £2.35 million, which are subject to a fixed charge from Charles Street Commercial Investments, to whom £3.36 million is owed. This leaves a shortfall of just over £1 million. Furthermore, the company has approximately £9,000 available for preferential creditors and a potential recovery of around £200,000 in debts owed to Penrhyn Ltd, though the recovery remains uncertain.
The report indicates that £1.23 million is owed to trade creditors, alongside an additional £21,000 to banks and financial institutions, resulting in an expected total shortfall of around £2.26 million. Notably, it mentions a debt of £475,537 owed to Conwy County Borough Council, prompting concerns about whether taxpayers would ultimately bear the financial burden.
In response to inquiries, the council clarified the nature of the amount owed. They explained that Conwy County Borough Council serves as the Sustainable Drainage Approval Body (SAB) for the region. The SAB evaluates and approves drainage systems for new developments, ensuring compliance with national sustainable drainage standards. The figure cited in the administrator’s list pertains to a potential commuted sum, a one-time payment in exchange for future maintenance responsibilities, rather than a payment for services rendered or land acquired.
The council elaborated, stating, “The figure of £475,000 would have been the estimated projected cost for Conwy County Borough Council to adopt the drainage on the site of the Penrhyn Homes housing development in Colwyn Bay and maintain it for the next 60 years. This process was underway but has not been concluded, and therefore the Council has not been able to adopt the drainage assets at this site.”
As the situation unfolds, Robert Andrew Roberts has been approached for further comments regarding the financial implications of the developer’s collapse. The challenges presented by this scenario highlight the complexities involved in property development and local government financial responsibilities.
