Feb 22 2013 by Craig Robertson, Kilmarnock Standard
Council bosses shelled out nearly £8 million to buy their new offices in Kilmarnock town centre.
The sum was paid for the prestigious and revamped Opera House on John Finnie Street (above).
Information obtained by the Standard outlines how a deal saw the council hand over the sections of the derelict site free of charge to developers, the Klin Group.
The council then purchased the whole site from them for £7.8 million once complete.
The John Finnie Street building is now home to around 200 workers who moved in at the end of last year.
Councillor Jim Buchanan, spokesman for delivering community regeneration, said: “I don’t think it’s an excessive cost.
“This was all done at that time with best advice of council officers.
“The whole idea of this was to regenerate this building instead of having it lie derelict for another 23 years.
“Its brought hundreds more council workers into the town centre who will be spending money in the town at lunchtime and boosting the businesses around them.”
The Opera House had lain derelict since it was gutted by fire in 1989 with only the sandstone frontage left in place.
The details of the development, released under the Freedom of Information Act, states that Klin had purchased most of it but the owners of several areas of the building couldn’t be found.
Talks were set up with council officials before councillors agreed in 2005 to carry out Compulsory Purchase Orders (CPO) on the site.
The council took control of those areas in 2008.
Part of that agreement included the assets – then obtained by the council – being passed onto Klin in at no charge.
The waiving of any fee was being seen as a contribution to town centre regeneration, the council said.
Some questions were raised about whether purchasing the site from Klin represented good value for money.
But external advisory work carried out by the council said that it did. A report to the council’s Cabinet on February 24, 2010 states that “work was commissioned by the council from Austin Smith Lord, who have previous knowledge of the site, to advise whether the price proposed by the property owner for the completed development was reasonable in terms of the costs which would be incurred if the council were to build a similar development on the same site.
“Their advice was that the price offered does represent value for money.
“They have further advised, however, that the market value of the final development when valued on a capitalisation of rent basis is likely to be significantly lower than the build costs being estimated at around £4.1 million in the event of a disposal with a secure blue chip tenant dependent on market conditions at the time of end valuation.”