Liverpool council gave six buildings on Smithdown Road to a developer behind a controversial Toxteth scheme for 17p each.
The three storey buildings, which include ground floor shops and residential units across the two floors above, were originally part of an "innovative" Shops for a Pound scheme launched by Liverpool council in 2016.
Although billed as a scheme which would see local people with viable business plans have the opportunity to acquire the shops for a yearly rent of £1, the reality turned out to be quite different.
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The properties were instead sold to West Tree Estates Ltd, the developer behind a controversial housing scheme in the Granby area of Toxteth, and which has acquired dozens of other properties at nil or low cost from Liverpool Council in recent years.
Following a Freedom of Information request submitted to Liverpool Council, the ECHO can reveal that the six three storey properties were sold to West Tree Estates Limited for a total sum of £1, working out at less than 17p per property.
In recent months, work has been getting carried out at the units, with a council spokesperson confirming that tenants chosen by Liverpool Council will be soon be moving into the units, which they will be renting for £1 a week, as part of the deal with West Tree Estates Ltd.
Cabinet Member for Development and Housing, Cllr Sarah Doyle has said she has "asked officers for an update on this scheme and the steps we are taking to make sure local businesses benefit."
A Liverpool Council spokesperson told the ECHO: “Several years ago, the council sought expressions of interest from businesses to take possession of the shops, refurbish them and then buy them for £1.
"None of the applicants were able to raise the money to afford the refurbishment and they did not have the money to do so.
"An independent valuation concluded it would cost more to do up the derelict properties than their value would be when the work was complete.
"West Tree Estates offered to purchase the properties, refurbish them and bring the upper floors back into use as flats whilst agreeing to lease the ground floor to businesses of our choosing for three years for £1 per week, followed by a further two years at a reduced capped rent.”
The ECHO reported earlier this year on what became of the Shops for a Pound scheme, which had been launched with fanfare after being hailed as a "hugely exciting grassroots regeneration" by then deputy mayor Ann O'Byrne, who had been cabinet member for housing and a key supporter of the scheme when it was first proposed in 2015.
A council report in 2015 stated: "The council currently owns a number of shop units along the Smithdown Road corridor abutting the proposed Homes for a Pound Plus area in Picton.
"These shops are currently vacant, require investment and are in an area where it will be difficult to find a viable commercial future for the shops.
"Leaving these shops vacant or failing to find a sustainable future for the units would significantly impact upon the proposed Homes for a Pound Plus initiative.
"It is therefore proposed that the Director for Regeneration and Employment be requested to develop a ‘Shops for a Pound’ scheme for these units – exploring the opportunities to either sell off or lease the units to businesses who would be able to invest in the sites and bring them back into use in a manner that would be appropriate and add value to the local community."
This decision was agreed by cabinet, with a report stating the head of regeneration was to "develop a Shops for a Pound initiative for the Smithdown Road vacant units currently in Council ownership and to report back to Cabinet by June 2015."
However this did not happen, although then director of regeneration Nick Kavanagh was given authority to make delegated decisions over it and by March 2016 a plan appears to have been firmed up.
Nick Kavanagh has since been twice arrested on suspicion of offences of corruption in public office unrelated to this property deal although he has not been charged, remains on bail and maintains his innocence.
A statement by Liverpool Council as the scheme was launched said: "Entrepreneurs are being invited to transform vacant retail units into viable businesses in an innovative new ‘Shops for a Pound’ initiative launched by Liverpool City Council.
"The scheme – a variation on the city’s hugely popular Homes for a Pound project – will see 12 empty units on Smithdown Road and Earle Road in Picton made available at a cost of £1 per week for up to three years."
This plan, however, did not go ahead and instead the freehold of the properties were acquired by West Tree Estates Ltd.
When asked what became of the scheme earlier this year, a spokesperson for Liverpool Council said: "Whilst there was interest, the start-up businesses unfortunately did not have the capital or the resource to undertake the works and associated risks.
"The council then received an offer from West Tree Estates to refurbish the Smithdown Road shops, use the upper floors as 1 bedroom flats (of which the city has a shortage) and then rent the ground floor shop units out to tenants chosen by the council. "The initial rent will be set at £1 for a three year period followed by a further 2 years at reduced rent of £400 pcm.
The spokesperson added: The works are due to conclude in the next three months and the council has an agreed group of tenants who will move into the space as the first set of tenants. Should a tenant move out, the council will have the ability to nominate another tenant to replace them."
Liverpool City Council’s Cabinet Member for Strategic Development and Housing, Cllr Sarah Doyle, told the ECHO: “The decision predates my time as Cabinet member but there is an absolute determination from the new leadership to make sure that property transactions deliver a social benefit.
"I have asked officers for an update on this scheme and the steps we are taking to make sure local businesses benefit.
"At my first select committee I announced that I will be working with the Mayor and Officers to create a fair, community focused disposal policy.”
West Tree Estates Ltd have been contacted for comment.
