EXPERTS have warned that gifting common good land at Picardy Place to hotel developers could cost the city “millions”.
Almost one third of the proposed site – which is a roundabout – is earmarked as common good land but could be worth up to £2.3 million if a 152-bed luxury hotel is built as part of the St James Quarter development.
Critics have blasted the city for giving away public assets cheaply and argue that any windfall from a hotel deal would require the sale or lease agreement of the land at full market value.
In May, councillors were told the footprint of the proposed hotel – which has obtained a pre-application notice – would include significant amounts of common good land.
Planning expert Andy Wightman, an authority on common good matters, warned that the hotel plot is likely to become “very valuable”.
He said: “So we’re looking at a capital receipt for the common good fund of substantial sums of money – millions potentially.”
Alistair Letham, a director at city-based property firm Colliers International, said land valuations were calculated on a series of complicated factors but the proposed five-star hotel at Picardy Place could be worth up to £15,000 per room annually – or between £1.5m and £2.3m in total.
The removal of the Picardy Place roundabout – dubbed a “cyclist blender” due to perceived safety risks – and introduction of a crossroads junction is thought to form part of the city’s groundworks to extend the tramline to Leith.
But critics worry that, unless council officials act, more valuable public land could be signed away for almost nothing.
When the St James Centre was built in 1969, 144 square metres of common good land were leased to developers for 150 years at a peppercorn rate of 1p per year. Mr Wightman has suggested the land could have raised “six figures”.
Green Party finance spokesman Councillor Gavin Corbett called for land at the St James Centre and Picardy Place to be “properly valued” to ensure any proceeds are “paid at a full rate” to invest in other “treasured common good assets like the Meadows, Calton Hill or Princes Street Gardens”.
He said: “The city council has had difficulty with common good land in the recent past. The leasing of the Waverley Market site in the 1980s, now the Princes Mall, should have brought in millions for the common good fund, but was let on a 175-year lease for a penny a year.”
The common good fund, which in the 18th century was large enough to purchase the entire site of the current New Town, no longer generates sufficient income to invest in public spaces and community groups in the city, and failed to do so for eight years.
However, it was announced last month that any deal to purchase Leith Custom House as a venue for a Leith museum would be backed by money from the fund.
A council spokeswoman said the city had a “duty to secure best value from the sale or lease of any assets”.
She said: “Appropriate options for selling or leasing land will be considered when we have the details of a proposed development on the site.
“The terms of sale when agreed between the council and the developer will be considered by councillors at a future economy committee.”
She added: “This development will create thousands of jobs and add £25m to the Scottish economy each year.”