The complex chain of ownership behind Teesworks' controversial £100 land sale

The land in question will be occupied by SeAH Wind; a company that will manufacture monopiles - enormous foundations that are driven into the seabed for offshore wind turbines. Construction at the site is ongoing, with production of the monopiles due to begin in early 2025.

Teesworks Ltd is the public-private company that runs the huge site that used to be home to the Redcar steelworks. Originally a 50-50 split between the public South Tees Development Corporation (STDC) and local businessmen, led by Martin Corney and Chris Musgrave, the private developers were awarded additional equity in November 2021 and now own 90% of the company.

As part of the agreement between Teesworks and STDC, Teesworks has the right to purchase land as soon as it’s been remediated. Teesworks Ltd exercised this right when it purchased the 90-acre site on 16th December last year at a cost of £1 an acre. The land was bought from South Tees Developments Ltd (STDL), the company that holds property on behalf of STDC.

The contrast between the purchase price and the perceived value has set off a chain reaction of claims and counter-claims in recent months.

Conservative Mayor Ben Houchen, who chairs the STDC, claims that the transaction netted the public body £15m. Although land deeds confirm the sale of land was for less than £100, a side-letter attached to that sale for other services may have brought in the amount that Mr Houchen claims. However, any possible arrangement of this nature has yet to be shared publicly.

Teesworks has subsequently granted a 40-year lease to Australian investment firm Macquarie, who have paid £75m in cash up front for the rights. If Teesworks has paid STDC £15m, it means that the company has made £60m in profit from the lease without investing a penny. Messrs Corney and Musgrave, along with other investors who own 90% of the company, could potentially walk away with £54m between them for their role as middle men without taking on any liabilities.

Macquarie then subsequently lease the land to the Tees Valley Combined Authority (TVCA) for an inflation-linked £3.65m a year. Their 40-year investment will start turn a profit a little over 20 years in.

Overall, Macquarie’s deal will see them making £1.775m in annual profit.

While SeAH will lease the site from TVCA for £4.3m a year, the authority’s liability to Macquarie means that they only stand to make a profit of £650k a year.

This means that annual rent on an acre of Teesworks land works out at £7,222. At 100% occupancy of the 1,630 acre site, a return on the total public spending of £246m would be achieved in just over 20 years. Current occupancy, according to TVCA’s figures, is only 15%.