Wednesday 13 December 2017

Harcourt claims it lost €119m expected profit in Jersey deal

Harcourt Developments built Belfast's Titanic Quarter
Harcourt Developments built Belfast's Titanic Quarter
John Mulligan

John Mulligan

IRISH property group Harcourt Developments claims it lost out on up to €119m in profits it expected to generate from what was to be a landmark regeneration project in Jersey worth more than €400m.

The company, which is headed by Donegal native Pat Doherty, is suing the States of Jersey Development Company and the island's Minister for Treasury and Resources over the delayed scheme.

Harcourt has alleged a breach of duty against the Jersey Development Company and also claimed in court that the minister induced the state company to breach its contract with Harcourt.

Harcourt began its legal action in 2012.

But Jersey's chief justice has only recently been hearing arguments from both sides of the case on foot of an application by legal representatives for the Minister for Treasury and Resources to strike out the claim in so far as it refers to the minister.

Harcourt was selected in 2006 by the Jersey Development Company, then known as the Waterfront Enterprise Board, as the preferred development partner for the so-called Esplanade Square Site on the island. Heads of terms were signed on October that year.

The statutory body then decided to join an adjacent site to the overall development and a further heads of terms was signed with other Harcourt companies in 2007.

In total, Harcourt expected to develop as many as 400 homes, a large amount of office and retail space, as well as a hotel, leisure facilities and public gardens.

Project

Harcourt, which built the Titanic Quarter in Belfast, also owns six shopping centres around Ireland.

Harcourt lost the contract to develop the Esplanade quarter in 2009. The Jersey Development Company has claimed the deal was ended after Harcourt failed to show evidence it could bankroll the massive project.

Harcourt was expected to provide evidence of a £95m (€115m) bond, and was due to pay the Jersey Development Company a total of £50m in three instalments in consideration for the granting of property leases.

But Harcourt has argued that the Jersey Development Company wanted the bond in place before a development agreement was completed, contrary to what had been contained in the heads of terms agreed earlier. Harcourt insists that the condition was one that no developer "could conceivably complied with".

Harcourt and a number of subsidiaries have claimed that they have lost the opportunity to carry out the Esplanade development "and earn substantial profits from it".

"This is estimated at between £77m and £98m (€119m)," the court has been told.

Harcourt and its subsidiaries are also seeking to recover their expenditure until the time when negotiations broke down in 2009.

Jersey's chief justice has said he won't strike out the action made by Harcourt and its subsidiaries, but also said that he did not consider the minister's application to strike out the claim against him as an abuse of process and would not decline to hear the application.

Irish Independent

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