From left to right: Councillor Gary Millar, Simon Law of Hong Kong Homes, and Peter McInnes of North Point Global
I have recently received a number of e-mails from desperate investors from people in Hong Kong and parts of the UK who have invested in the China Town and other three stalled investments in the city.
Here is one of the e-mails which is typical of those that I have received:
Dear Councillor Richard Kemp, CBE
I hope this email finds you well.
I am one of the buyers of the North Point Pall Mall sites and write to seek your assistance in resolving the North Point Global issues with reference to the recent Liverpool Echo publications for your intention to call for inquiry to Liverpool New China Town and council’s approval to the property deals with North Point Global including the North Point Pall Mall Project L3 7DB.
I purchased a unit and a car park in the North Point Pall Mall project in consideration of the potential growth opportunity under the Northern Power House project as well as the presentation by Councillor Gary Miller in North Point Global (NPG) property sales event in Hong Kong. I perceived that the North Point Pall Mall project should be trustworthy with the Liverpool Council official’s endorsement. However, I was astonished to learn that all the NPG developments were stalled since December 2016 and the company might cease operation in Liverpool according to NPG’s July Newsletter.
I worry the problem generated by NPG and caused to those investors in NPG’s projects in Liverpool would jeopardise the city’s reputation to attract future investment and the credibility of Liverpool City Council to impose adequate due diligence check on developer approval. Grateful if you can conduct a thorough investigation of the case and ensure a reputable developer could be appointed to takeover all the NPG sites to continue the development by minimizing the potential loss to all the investors in Liverpool property.
I look forward to hearing your feedback to the inquiry process and the actions to be taken to rectify the NPG issues.
The point being made in this and the other e-mails is that they considered that the investment must be a safe one because of the involvement of Liverpool City Council. In particular, the fact that this scheme was promoted by the Assistant Mayor of Liverpool Cllr Gary Millar.
This is a point which would have played great emphasis in the minds of those people who were persuaded to invest in the scheme (and others) by people in Hong Kong. In Hong Kong and mainland China, which effectively governs Hong Kong, the involvement of a public body is effectively a guarantee that the scheme will proceed. Public figures will not get involved unless the whole of the state’s machinery is behind the project.
I am now concerned that those people who have lost their money will consider that this is a ‘joint enterprise’ with the Council and that they might seek relief from their losses from the Council and ultimately the taxpayers of Liverpool. There are already talks within the community of a class action being pursued by a number of investors coming together. This could lead to huge repercussions for our finances. My understanding from the Liverpool Chinese Community is that up to £80 million has been invested in the 4 failed projects by people from the Hong Kong and Chinese mainland.
I have asked the council to do three things:
- Make clear via the Hong Kong and specialist Chinese media that Liverpool Council has not had a significant role in this matter and the legal limitations of its role;
- Ensure that Cllr Millar makes no further forays to China unless and until these matters are cleared up.
- Ensure that external legal advice has been taken from specialist lawyers about any contingent liability.
Whatever the liabilities contained here, and who knows what they might be, it is clear that Liverpool’s reputation has been trashed in a part of the world where there is still footloose money around. This is, of course, not the only development with problems. At least four more developments have been developed using the ‘sell a room’ financing method and at least three of those have difficulties according to my e-mail inbox.
Who knows what else is going on out there because unless we are the landowners we have little knowledge of anything but the planning application. In these circumstances, I think that it would be rash to promote any further development using council people or resources.
I also think that the council should be pro-active in establishing a ‘help line’ for people with investment problems in our city. Even if the council have had absolutely nothing to do with the marketing and promotion of investment opportunities it is still the reputation of our City that gets trashed. When I have raised problems with other developments than these four the council has simply refused to involve themselves in any concerted way to deal with issues and seek redress for the investor.
In the meantime, we must ask ourselves whether there is a housing bubble in Liverpool that will burst. Far too many apartments are being planned, of which far too many are for students. We know from last year’s and this year’s intakes that there is a declining number of students both internally and from the EU. I cannot begin to comprehend why we are still allowing developments for a declining market.
I hope that I am wrong but I am sure that the Council needs to do far more to salvage its reputation of we are to get a continued stream of high quality and relevant development.