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Home / Latest News / Cardiff council’s Russell Goodway under pressure to produce land deal letter

Cardiff council’s Russell Goodway under pressure to produce land deal letter

Cardiff council finance boss Russell Goodway is under pressure to produce evidence of a Welsh Government letter he used to help justify an attempted multi-million pound land deal.

The Labour councillor has told fellow members that his only copy of the letter has been shredded but the leader of the opposition on the city council has called on him to immediately obtain a copy of the letter from the Welsh Government or resign from the cabinet.

Coun Goodway said the call for his resignation for misplacing a single piece of correspondence would, “to most rational people, appear somewhat disproportionate and more than a little desperate”.

The letter in question was referenced by Coun Goodway at a meeting on November 8 in which the cabinet agreed to purchase a vacant site at Callaghan Square, subject to delegation.

Coun Goodway told the meeting the Welsh Government had advised him a “third party” wanted to purchase the site and “land bank” it, meaning it would be “sterilised for a number of years”.

“It’s for that reason that the public sector should take a controlling interest,” the former council leader said at the County Hall meeting.

The following day, the Welsh Government would only say: “These are matters for Cardiff County Council. Any issues relating to potential land purchases would be commercially in confidence.”

Coun Goodway repeated the claim of a third party at a joint scrutiny committee meeting held into the potential land purchase at City Hall on November 16.

Reporters were excluded from most of that meeting due to commercial confidentiality. Coun Goodway never publicly stated what he planned for the site, except to say it would be useful in enabling a number of schemes.

On November 22, the council said it had abandoned its bid to buy the five acre site, which is located in the new Central Cardiff Enterprise Zone designated by the Welsh Government.

At the time, the council explained it had been agreed with the Welsh Government that “in the circumstances, it would not be expedient for the council to purchase the land at this time”.

It is understood the deal collapsed because the Welsh Government refused to waive an “overage clause”. The clause entitled the Welsh Government to a proportion of the profits when the land sold.

The Welsh Government subsequently purchased the site on January 10. Land Registry records show it paid site owners MEPC £7.22m, plus £1.44m VAT. MEPC, a commercial property firm, bought the land in 2001 from the Welsh Development Agency for £1.6m.

The Welsh Government plans to develop the land as a Grade A office space, but has yet to announce a development partner or tenants.

In the following months, chairs of cross-party scrutiny committee have repeatedly asked Coun Goodway to produce the “third party” letter. On Wednesday, the Policy Review and Performance Committee had the opportunity to ask him face-to-face.

Coun Goodway told them the letter was in a bundle of papers he took to the November 16 meeting. He said the bundle was given to a council officer at the end of the meeting and “got shredded, I guess”.

He said there was no council record of the letter as it had been “hand delivered” to him by an Assembly officer at his other place of work. Coun Goodway is chief executive of Community Pharmacy Wales, based in the Bay.

“It was my fault. I take absolute personal responsibility. I prepared that bundle myself,” Coun Goodway told the committee.

“The meeting went on for some time at City Hall. At the end, I got it together and handed it to somebody who took it away and that was the last I saw.”

Asked if he had requested the Welsh Government provide a another copy, Coun Goodway said he had “not chased it up”, but he would “endeavour to”.

Committee chairman Elizabeth Clarke, the Liberal Democrat councillor for Cathays, told WalesOnline she had asked for the letter four times.

“Surely, he could have contacted the Welsh Government Minister months ago to ask for a copy to be sent to me? I feel that Councillor Goodway is holding the scrutiny process in contempt and am considering my next course of action,” she said.

Liberal Democrat group leader Judith Woodman said: “This is not the behaviour of a cabinet member accountable to the citizens of Cardiff. He should apologise and rectify the situation immediately by obtaining a copy of the letter from Welsh Government records – or resign.”

Pentyrch’s Conservative councillor Craig Williams, chairman of the Economy and Culture Scrutiny Committee, added: “He used that letter to justify an attempt to purchase that land, not to be on the official records is incompetent at best.”

An independent valuation carried out for the council valued the Callaghan Square site at £7.25m. But WalesOnline has also obtained a draft version of a report presented to the cabinet on the economic impact of buying the site.

It states the existing landowners insist the council pay the asking price of £7.5m, “despite an independent valuation of approximately £5m”.

A council source said the reason for the two valuations “relates to different proposed uses” of the site.

WalesOnline yesterday asked if the Welsh Government had a copy of the letter. A spokesman responded: “Any correspondence relating to the purchase of land at Callaghan Square would be commercial in confidence.”

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