Car dealer awarded £1m in Mann Island arbitration
The North West Development Agency has been found liable to pay a one-off overage payment owing to the sale of the Mann Island site on Liverpool waterfront in 2001.
Liverpool valuation expert Peter Hitchcock of Hitchcock Wright & Partners was appointed to rule on the dispute between car trader Robert Smith Group, which ran a Road Range car dealership selling Mercedes-Benzes and Porsches on the site for many years, and the NWDA.
The NWDA paid Robert Smith Group £9.5m in 2001 for the 4.25-acre site to make way for the competition to develop the Fourth Grace on the world heritage site. That particular scheme was later aborted when the agency decided funding could not be justified.
The NWDA then sold the site to Neptune Developments and Countryside for significantly less than it had initially paid. Neptune and Countryside are developing two residential blocks and an office for Merseytravel.
Robert Smith Group argued that the NWDA's sale to Neptune and Countryside had denied it the chance to take extra payment if an overage clause were triggered.
The overage agreement was for 50% of the value above an agreed undisclosed level, believed to be around £10m. Robert Smith Group said the land should have been put on the open market to maximise the value.
Hitchcock is understood to have used 1 August 2007 as the pricing date for the settlement. Among the Liverpool land transactions that took place in 2007 was the sale by Peel Holdings' Princes Dock Development Company of a similar but smaller plot to Lead Asset Securities for £15.5m.
It is understood the NWDA argued the value of the site was sub-£5m while the car dealer said it was in excess of £20m. Hitchcock settled the case at £12m, £2m over the £10m trigger, meaning £1m is now due to Robert Smith Group.
One source close to the case, who asked not to be named, called the compromise result a 'rather boring score draw'.
Keppie Massie advises the NWDA; Edmund Kirby advises Robert Smith Group. All parties declined to comment.
