Taxpayers face huge loss over bargain sale of key Hull site

The regional development agency Yorkshire Forward has approved the sale of Island Wharf in Hull – once earmarked as a new headquarters for Northern Foods – and nearby land for an undisclosed sum.

However, the asking price of £2.9m for a package including the offices, which were built for £6.3m, and land next door, formerly owned by Associated British Ports, has been labelled as a “bargain basement” deal by the city’s Lord Mayor.

Labour has been fiercely critical of the Government for refusing to allow councils to take ownership of assets owned by Yorkshire Forward, which is being axed.

Hull West and Hessle Labour MP Alan Johnson said: “It’s disappointing that the Government have decided to dispose of this public asset to the private sector. In my view Yorkshire Forward’s portfolio should have been transferred to local authorities.

“They were built with public money and the public will now never realise the full potential of this major investment.”

Lord Mayor Coun Colin Inglis said: “It is a bargain basement price. We weren’t given the opportunity – the Government just weren’t interested in us buying it. If it is a developer who goes ahead and does something with it, you can live with it. However, if they are going to sit on it for 10 years it is not good news.”

Hull and Humber Chamber of Commerce’s president, Howard O’Neill, said: “This is a strategically important site for Hull which the Government should have passed into local ownership. Selling off assets like this in a national fire sale is not the best way to get their maximum value or guarantee continued regeneration.”

The transaction is expected to be completed by the middle of the month. The office block, built in 2004 fronting the Humber Estuary, was meant to signal a new era of business prosperity for the city, but never lived up to its promise. The third floor with a boardroom suite and second floor have never been let. Sources say rents and service charge were too high.

More than four acres of land, which have also been sold as part of the package, were originally set aside to support the development of the Humber Quays area, with the plans including 28,000 sq metres of offices, 450 homes, a hotel, plaza and riverside walkway.

Yorkshire Forward declined to comment on the details of the sale.