An arm’s length government-owned company has spent £2m buying up property to make way for a major redevelopment scheme – before planning consent has even been approved.

Householders and businesses in an area of Douglas earmarked for Manx Development Corporation’s (MDC) proposed Westmoreland Village project claim they have been put under pressure to sell up.

Garage owner Andrew Malone, of the Quickfit Supercentre, says he will fight eviction proceedings in court next month.

His landowner Hesketh Investments has entered into contract for the sale of the land to MDC subject to vacant possession.

Padlocked chains have been put across the driveways of properties on Westmoreland Road that have already been sold to MDC.

These include ‘Glen Mie’ at number 40, number 42 ’Windy Corner’, 46 ‘Archallagan’ and 48 Sheiling. The Antique Centre on Demesne Road has also been sold to the company.

Inquiries at Land Registry confirm that the sales of Glen Mie, Archallagan and Sheiling were all completed on October 23 this year, with a price tag of £535,000, £355,000 and £370,000 respectively.

Windy Corner was sold for £340,000 on November 20 while the Antique Centre’s sale on June 1 this year fetched a price of £350,000.

The total purchase price for the properties was £1.95m.

The former Nurses' Home, valued at £950,000, was transferred by government to MDC for a consideration of just £1. It is currently being redeveloped into 37 flats and a cafe after planning consent was approved in January.

Quickfit has leased its premises from Hesketh Investments on a rolling 12-month basis since 2017. The Coroner served a notice to quit in June requiring the company to vacate the site by the end of September.

Mr Malone, whose company had a contract to recover vehicles for the police, refused to leave and now the matter is heading to court.

A claim for vacant possession of Unit 1, Demesne Road, will be heard in the high court on January 10. Hesketh’s claim form states that it entered into contract with MDC for the sale of the premises on September 8 this year, with the requirement that the site is vacated by the end of March 2024.

Mr Malone vowed: ‘I’m going to fight it.

‘MDC are buying up all these buildings but they may not get planning permission.

‘MDC is supposed to be developing brownfield sites but this is not a brownfield site – they have been buying up homes and businesses.’

A planning application for the Westmoreland Village scheme, comprising proposals for 133 new homes including apartments, townhouses, small blocks of flats, a new Scout hut and refurbishment of Crookall House as offices, was submitted on April 21 this year. There have been some 56 letters of objection to the scheme so far, many claiming it is an over-development which will exacerbate the area’s already acute parking problems.

Among those objecting is the Ellan Vannin chiropractic clinic at no.44 Westmoreland Road. Its objection reads: ‘I have spent many years building up my business and am disappointed I am being put in this position.

‘I am not against development per se. There are buildings which are not brownfield sites being selected for redevelopment.

‘It goes against what our government had told us their initiative is. I am concerned at what cost to the public purse acquiring these sites will be.’

When contacted by Media IoM, the clinic manager said they would prefer not to comment.

The former Ballacloan School on Demesne Road, whose site marks one corner of the development area, was demolished earlier this year.

Other premises within the development site include James Caine floorcoverings and the 1st Douglas Scout hall.

Property development company MDC was set up in March 2021 with the remit of being the catalyst for the regeneration of brownfield sites. It operates at arm’s length from its sole shareholder, the Treasury.

A £50m loan facility with lender Lloyds Bank, and Treasury acting as guarantor, was approved in February this year. It can be extended up to £100m. The agreement allows MDC to borrow funds from Lloyds, with prior authorisation from Treasury, for specific projects.

Media IoM submitted a Freedom of Information request to Treasury asking details of the number and purpose of drawdowns from the loan facility made so far.

Treasury explained that the facility agreement works by allowing drawdowns to be ‘rolled over’, with a new loan request made to pay off the initial amount plus interest.

The first loan request was made in March for £2m, which was used to settle two Treasury loans totalling just over £1m with the remainder used to fund the Nurses Home project. This was rolled over in June and again in September with new loans to cover the original sum plus interest and fees, with it now totalling £2.08m.

A second loan request was made at the end of March for £2m to finance the purchase of privately held properties on the proposed Westmoreland Village site. This was rolled over in July and October and now totals £2.055m.

Treasury approval was sought in September for a third loan request for a drawdown of £2m. The FoI response says the purpose of this was to enable the purchase of properties but redacts their name.

On the same date in September, MDC sought Treasury consent to withdraw a further £5m from the revolving credit facility to ‘continue to meet its contractual payment obligations on the former Nurses Home’.