| Synopsis: |
This first NIAO report seeks to establish what lessons can be learned from the Campsie Office accommodation experience. The Industrial Development Board (IDB) entered into separate 25-year leasing agreements for two 10,000 square feet units located within the former Courtaulds site in 1991 and 1992. However, IDB had an 'option to break' from the leases at the end of the initial four years if the prospect of finding tenants appeared remote. This was an important clause as the annual rent for each unit, which had been between GBP 1 and GBP 16,875 in the first four years would increase substantially to GBP 45,000 for the remaining 21 years. Although both units remained unoccupied for the first four years due to a lack of demand, IDB did not exercise its 'option to break', meaning that it was committed to the full 25-year leases for both buildings. More decisive action taken by Invest NI resulted in an agreement with one of the developers in January 2008.After prolonged negotiations, Invest NI paid this developer a 'surrender premium' of GBP 180,000 in return for being released from the remaining lease obligations some nine years early, thereby saving up to GBP 371,000 on future commitments. Negotiations with the developer of the remaining unit are ongoing. Agreement has been reached, in principle, for surrender of the lease for GBP 225,000. This would save around GBP 268,000 on future commitments. Total costs incurred by IDB and Invest NI for both units, should the second lease be terminated in April 2010, will amount to almost GBP 1.8 million. It is clear that these leasing agreements have not delivered value for money, with significant expenditure incurred for units which have never been occupied, with no new jobs or business opportunities created. The second NIAO report looks at the funding of the Synergy e-business incubator (SeBI). SCL established SeBI in 2000. Its objective was to create a world-class ICT business incubation unit in West Belfast, which would nurture businesses to the stage where they would exit and trade independently. Between 2000 and 2003, SeBI received government funding of GBP 1.2 million, mainly from the Department of Enterprise, Trade and Investment (DETI).DETI's Industrial Research and Technology Unit (IRTU) was responsible for appraising and monitoring the project. SCL ceased trading in December 2006 due to deteriorating financial performance. |