Politicians have raised concerns over the sale of land by Liverpool Council to a local developer.
The council sold a parcel of land in Vauxhall to MV Canal in August 2016. The site, nearly an acre in size, was cleared and had planning permission to build apartments. The new homes scheme has since stalled.
Last week the ECHO revealed links between councillor Abdul Qadir, who was a member of a city property taskforce, and MV Canal. MV Canal is owned by the Vega Group.
READ MORE: Liverpool Council cabinet member steps down over development controversy
Cllr Qadir is a director at Vega Group subsidiary company Vega Trading. Cllr Qadir stepped down from his role as cabinet member for neighbourhoods on Tuesday. He maintains he has done nothing wrong and has nothing to hide.
The ECHO can now reveal that MV Canal bought the site on Vauxhall Road from Liverpool Council for £135,000 in 2016. The site, just less than an acre in size, was cleared and had planning permission an apartment scheme.
In 2017 Liverpool Council paid £616,000 per acre for land at a nearby site. In response to a Freedom of Information Act (FoIA) request Liverpool Council valued land at a nearby site at around £500,000 per acre. The council released the information in response to a FoIA response about the sale of the Bishop Goss site in Kirkdale. The council bought the site to make way for the new Merseyside Police headquarters.
The council's response read: "The Council have informed Merseyside Police that the valuation of the assembled site for disposal will be in the region of £500,000 per acre of the net developable area.
"The net developable area is approximately is 8 acres giving an initial valuation of £4m."
The land at Bishop Goss did not have planning permission at the time the council bought it.
The local authority bought the 8.2 acre site at Bishop Goss for a total of £5,051,331 which valued the land at around £616,000 per acre. The council had to pay some compensation to businesses on the Bishop Goss site which increased the amount of money spent on the land deal. The compensation was worth around £1m.
MV Canal also bought a site at 285 to 289 on Vauxhall Road in February 2013 for £320,000. The company bought the freehold from a private owner. The site did not have planning permission at the time of purchase. The developers used this site and the adjacent site they bought from the council as the site for their proposed development.
The MV Canal site on Vauxhall Road, which is 1.5 miles from Bishop Goss, stalled around three years ago. Sami Labidi, who owns Vega Group, said that the site stalled following the death of his father.
Mr Labidi also said that Covid also contributed to the delay.
A spokesman for Liverpool Council said that the site that was sold to MV Canal for £135,000 inclusive of VAT. He said the site extends to about 3,336.00m2 of which 2,235.00m2 was for car parking and only 1,101.00 m2 was for the development of 16 flats. The sale price of £135K equates to £8,438 per flat. Taking away the car park the price is £7,875 per flat.
The spokesman added that the presence of a borehole near the bridge further reduced the sale price. The spokesman also said that there was an overage agreement in place.
Richard Kemp, leader of the city's Liberal Democrats, said: "I believe the amount received for the land at Vauxhall Road significantly undervalued the value of the site to the council.
"The Caller Report revealed a significant undervaluation of land when sold to a range of developers in the city. The council appears to have lost several hundred thousands pounds on this deal and it needs an investigation."
Cllr Steve Radford, leader of Liverpool's Liberal Party, said: "The lack of a consistent approach and independent valuations on land sales has been an alarming issue for the city and a recurring theme for the last thirty years."
Last week the ECHO reported links between Cllr Qadir and the MV Canal site on Vauxhall Road. He witnessed an agreement between the developers and the council in relation to Section 106 payments ( a contribution by developers to the community.)
At one point a council officer wrote to Cllr Qadir asking him when the developers would be in a position to pay a S106 payment worth £57,000. The ECHO also revealed that Vega Trading, where Cllr Qadir works, granted loans worth hundreds of thousands of pounds to MV Canal.
Cllr Qadir was a member of a Liverpool Council taskforce - or task and finish group - set up to investigate buyer-funded property schemes in the city, also known as fractional sales. Fractional schemes, where buyers put down large deposits to finance off-plan apartment schemes, attracted huge controversy following the collapse of high profile projects. Cllr Qadir has said the MV Canal scheme was not fractional.
He declared his interest in the Vega Trading Group and MV Canal on the council's register of interests. He said his role with Vega Trading had not conflicted with his role as a councillor on various committees including the fractional taskforce.
On Tuesday Cllr Qadir announced that he would step down from his role on the cabinet while an internal investigation takes place. It is not clear if he would intend to return to his post if cleared by that probe.
In a statement released on Tuesday he said: "I believe that our city and its image are more important than any individual including myself. For me, our city and its residents will always be my highest priority and must be protected. In discussion with Mayor Joanne Anderson, I am taking a conscious decision to put the interest of our city and its residents ahead of my feelings, interest and my politics.
"Therefore I have decided to step aside as Cabinet member for Neighbourhoods and allow for a full independent investigation to take its course without any influence or distraction. I will accept and abide by the outcomes or any recommendations from the investigation."
"This is not to say that I have done anything wrong or have anything to hide. All my decisions have been made in good faith. I have always been selfless in my role as an elected member with integrity, honesty and openness at the core of my dealings and have always worked to strengthen accountability and transparency in council decision-making."
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