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Winerack a symbol of how the recession hit Ipswich eight years ago

PUBLISHED: 08:05 21 April 2017 | UPDATED: 09:36 21 April 2017

The Winerack building itself has changed little since this picture was taken in 2011. Picuture: ANDY ABBOTT.

The Winerack building itself has changed little since this picture was taken in 2011. Picuture: ANDY ABBOTT.

The second tower at the Regatta Quay development became a very visible symbol of how the recession hit Ipswich after work there stopped at the end of 2009.

Developer John Howard took cabinet minister Chris Grayling on a tour of the Winerack on the Ipswich waterfrontDeveloper John Howard took cabinet minister Chris Grayling on a tour of the Winerack on the Ipswich waterfront

It was being built by developers City Living in the site of the former Paul’s Maltings during the property boom of the late 2000s.

Like many other projects, City Living’s development was financed by money borrowed from Irish banks which almost collapsed in the worldwide slump. The money ran out at the end of 2009 and City Living went into administration in January 2010.

The skeleton of the second tower was left unfinished. We gave it the nickname “The Winerack” because of its appearance – and the name stuck.

For a few years there had been speculation that the skeleton could have been damaged by the exposure of concrete to the elements – surveys have found there has been no damage.

When property developer John Howard bought the building in 2014 there were hopes that work to finish the project would start soon – but the scale of the development was so great that financial assistance from government sources was needed.

This has taken longer to finalise than first thought – but finally all the pieces are in place to allow work on the project to start.

Throughout the last eight years the symbol of the recession continued to loom over the Ipswich Waterfront . . . and its almost iconic status prompted Mr Howard to officially name it The Winerack.

The building was mentioned by then-Prime Minister David Cameron during his visit to Ipswich in 2011 to see how the area was overcoming the recession.

And Mr Howard showed the building to cabinet minister Chris Grayling during last year’s referendum campaign during a tour to urge people to vote to leave the EU.

The news that work can finally start on completing the building will remove a huge eyesore from the Ipswich skyline – but it will still leave other sites in the Waterfront area needing considerable work.

The Mill is still incomplete and redevelopment is still needed at the last silo on the dock, owned by Investec.

The borough council has bought the site of the former St Peter’s Warehouse which could be redeveloped as the key entrance to the Waterfront area of the town over the next few years.

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26 comments

  • Bristol, many thanks for your detailed reply. I still think that are a few doubts about how it is financed. Just how much money is being put up by the private sector? Seems to me the developers have secured an extremely favourable level of 'gearing', it may even be that the entire cost of completion is coming out of the public purse! I sure hope not. A gearing of 100% would make any city shark droll! As someone else said in another thread on the subject, if it's such a good idea, why isn't the bank putting up the ante? Anyway, let's hope it's a success at least.

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    Gobby

    Tuesday, April 25, 2017

  • @IpswichBristol - you started off with certainty and now have spiraled down into vagueness. If you really think this project is so great (hope the runners spot the 'Winerack' and say "gosh" [sarcasm]) then will you make it your job to find out how much OF THEIR OWN MONEY the developers are risking and (please) the names of ALL the developers involved, so that others can research Tory links. Reminds me of the care homes contract given to CareUK by the TORY Suffolk Council and the donation to the Tories made by (I think) the wife of the ex-Chairman of CareUK. But don't worry folks, everything is fine ... this is the UK and there is no corruption here.... this exists only in other 'less developed' countries [more sarcasm]. As a disclaimer, no allegation of any form of favouritism for any services or donations given to the Tories by any person living or dead is intended here.

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    Johnthebap

    Saturday, April 22, 2017

  • Hi Gobby, yes that is a fair point. Development finance typically ranges from 4%-10+% depending on the risk and the loan to value as per a mortgage. I can't comment on how much has been put up front towards it as I really don't know, but it will probably be a reasonable percentage- and it shouldn't be under-estimated the investment that has already been made in the project- the HCA and LEP would point blank not lendmoney to a project which the developer didn't believe in enough to support it themselves in a reasonable way. The personal guarantee is an additional protection against what might be considered a more risky project, or sometimes, against a company which doesn't have any trading history- many development projects are isolated in a separate company so do not have any credit history to obtain finance. More over, development finance is only released in tranches- and the amount lent will always be considerably less than the worth of the work in progress. My comments are 'development generic' as I have no idea on the exact set-up of this project, but my thoughts are the norm for development. The other point is that development financing is a huge cost on any development, and developers will always try and pay this back asap to minimise the cost- as you can imagine in the early stages of development before income is received through sales there is a large draw-down which will be costing a lot of money to have in place. My overall opinion is that the LEP could use their fund for any projects within its geographical area- and it is about time they pushed some towards Ipswich- so this is a good thing. The HCA will have a huge range of projects up and down the project which they could invest in, so again, in my opinion it is a good thing some of this will be of benefit to Ipswich. I understand if people do not agree with the principle of the funds, but that stage is well passed and the funds are there- we should use them as much as possible! We all know the Wine Rack has been a huge visual reminder of the recession, and it will be of huge benefit to the town to have this project finished. 3,000 people will be running the Great East Run in September which will receive national coverage- this project should be underway by then and will be a really positive advert for Ipswich. We live in a great town which is really starting to gain some momentum in improving itself- and I look forward to seeing this completed. I'll also put my neck on the line to say I think this will be a really successful project for all involved.

    Report this comment

    IpswichBristol

    Saturday, April 22, 2017

  • Bristol, giving a personal guarantee does not mean investing any money into the project., only that the loan will be repaid from their personal wealth if the company goes bang. So it does not follow from what you have said that the developers are putting any of their own dosh in. I am not saying that in this case the developers are not putting any money up, just that from what has been said here by M Ling and yourself does not explicitly say that the developers have put in any cash themselves, just given guarantees that the loan will be repaid (provided they haven't transferred all the money into their wifes' name if and when it all goes belly up)

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    Gobby

    Saturday, April 22, 2017

  • Can the posters who have better knowledge of this project than I tell us what collateral the developers put up as security for the loan, And what is the interest rate that will be paid and the term of the repayment. I hope this information will reassure us that the developers are putting some of their hard earned at risk as well as us taxpayers. To me, £20m sounds like it will cover the entire cost of completing the job. Also, as another poster commented, that's £1m a floor so just how much will each flat cost us? Will it be renamed 'Greytowers' when it's finished ?

    Report this comment

    Gobby

    Saturday, April 22, 2017

  • My comment was made by research and after reading past comments made by others and I read the articles from johnhowardbusiness.com , he is a well known Tory donor and makes speeches for the Tory elite . Good luck to the chap , I'm just pointing out how Mr Ben Gummer, whom I have met before ,stated Ipswich was going to be re built by the private sector as the public sector wasn't capable of delivering the technology and know how .Why then is he having the bridges , the island site and now the wine rack , being built using the publics money ? Typical Gummer, using public funds to pay for their projects as the private sector cream the profits .

    Report this comment

    Macke

    Saturday, April 22, 2017

  • I read the figure of £20 million from the 'public purse' (i.e. from the ordinary man in the street) but nowhere can I see how much the developer is risking. And what happens if property crashes again? Maybe the clue is in this: "The money ran out at the end of 2009 and City Living went into administration in January 2010." It seems to me that they used bank loans for projects, the economy tanked, they went bust (at what PERSONAL loss?) ... and started again??? But this time without bank money .... instead PUBLIC money? All of this needs serious investigation ... it is such a pity that we have no investigative journalists around .... no investigators, no journalists ... just 'lapdogs'.

    Report this comment

    Johnthebap

    Saturday, April 22, 2017

  • £20,000,000 I reckon thats about £1,000,000 for each floor?

    Report this comment

    oracle

    Friday, April 21, 2017

  • Waspie's wife...All this money going into this area yet again. Interesting read, "Macke".

    Report this comment

    waspie

    Friday, April 21, 2017

  • This will be good news in September when (if) work starts but there doesn't seem to be any reason for publishing it now as it might not happen just as many other things have failed to materialise in Ipswich. Does anyone know why it is reported as news in April? Any ideas?

    Report this comment

    amsterdam81

    Friday, April 21, 2017

  • All very interesting. I am sure the journalists at the EADT will soon be detailing the people behind this venture who find themselves in receipt of this publicly funded support, and then time will allow us to discover if the cynics below are right, or whether this is just a coincidentally timely piece of government support purely for the improvement of our town, which is being performed from a sense of civic duty. I am sure it is the latter.

    Report this comment

    Visionary

    Friday, April 21, 2017

  • Hi MPrime- thanks for your note. I absolutely understand what you're saying and would have many of the same concerns over front-line funding as you do. I am not sure of the affordable housing provision on this, but will try and look back through the planning history when I have time. In terms of the funding, the Homes and Community Agency have a new £1.2bn pot of money to spend on helping to bring developments forward- particularly where developments have stalled for whatever reason- it should be a very cost-efficient way for the government to help drive up the numbers of new homes being built. The Wine Rack was probably a prime candidate for this money- but it certainly wouldn't have been an easy task- the money is also subject to State Aid rules and regs- so it is a very rigorous process to get the money and will have been scrutinised by independent experts as to the integrity of the scheme the money is being used for. So- on this basis- we should be pleased that Ipswich does have the confidence of the experts to commit this funding. I should add this 'funding' isn't a grant and it has to be re-paid just as any other development finance would. The LEP funding facility has been provided through their 'Growing Places Fund' which is there to support development projects- but again- is money which has to be repaid and is recycled through that fund. In terms of the benefit to the public- on the face of it- I can understand it might not appear to do much in this regard- but in terms of sorting out what is a hugely complicated project, it should be applauded for what it will do which is provide jobs in the short term which will benefit many, and the new residents who will in turn support local businesses. It has a wider spin-off in driving up confidence in an area which can only lead on to other positive things. The LEP fund will have a very competitive edge to securing the funding and in fairness the Ipswich area hasn't benefited from LEP funding as well as other areas under their jurisdiction- so it is good Ipswich has attracted this funding. The HCA money is nationwide, so again, it is a positive investment in the area- and I would rather it was spent here than elsewhere! In terms of private finance- lenders will require a substantial guarantee before releasing funds- and where a project is placed within a newly created company- personal guarantees are often secured against Directors- so developers do commit large sums of their own money too. Of course- many lenders enjoy the inherent risk in development as it attracts good returns. If this project is competed within 2 years and the Economy holds up as I expect it will, then there is no reason why this shouldn't be a really successful project for everybody involved- and a really important part of the jigsaw for the Waterfront and Ipswich

    Report this comment

    IpswichBristol

    Friday, April 21, 2017

  • Mark, and Ipswichbristol, your comments are welcome and appreciated but the rest of us are taking this article at face value and its telling us that £20m of money we are told isn’t available for so many other vital local services etc. is being handed over to a private developer to complete his private investment. There is no mention of it being a loan, nor of any public affordable housing as part of the scheme, nor of how this public money will actually benefit the public, (other than removal of an eyesore from the skyline, which is not worth £20m alone is it). It’s the poor reporting then that leads the rest of us, without perhaps the knowledge you both may have, to see this as a very bad deal for the town.

    Report this comment

    M Prime

    Friday, April 21, 2017

  • We all know that Ipswich suffers from air chair critics. But much worse it suffers from arm chair supporters. We have lots of well meaning people who desperately want better for the town, yet are happy for others to do it. Ipswich Bristol is a supporter of Orwell Ahead and our Reform Suffolk Campaign. He is a professional in the planning sector and has tremendous knowledge. He is not involved in any projects in the town, so there is absolutely no conflict of interest in his observations here. I am in the global transport sector, and my we have a further two Reform Suffolk Campaign candidates with expertise in retail, arts and law. All of us are either born or have lived in Ipswich. None of us has an ulterior motive other than being prepared to stand up for our town, and offer our ideas, skills and efforts to improve it. Moving on to the Wine Rack, a project of this size involves considerable financial risk and needs collective investment. Ipswich Bristol understands better than most the scale of this project and what it has taken to reach this stage. Many of us may wish that there was another way or means. Yet since 2009 no one else has stepped forward or had the balls to do it. So, in this instance I believe that some praise is due to the developer and his backers, the New Anglia LEP, and teamwork from David Ellesmere and Ben Gummer.

    Report this comment

    Mark Ling

    Friday, April 21, 2017

  • Is Ipswich Bristol really Mark Ling from Ipswich Ahead? Also from the web -" John is also regularly invited to preside over auction at many events throughout East Anglia on behalf of charities, private businesses and most recently for the Conservatives’ auction dinners." You scratch my back.... what ever happened to the open and transparent government we were promised?

    Report this comment

    Citizen

    Friday, April 21, 2017

  • 'IpswichBristol' - you make me laugh! You wrote "I would be confident that it will be a good investment for the public purse." Really? With a bubble in property prices? But if your 'vision' is correct then why doesn't the 'public' manage the project and keep the FAT PROFITS for themselves. You make it seem as if the developers are being charitable - they will probably walk away with a full purse and then if property prices nosedive, it is the public who will lose. Remember the 'great idea' behind Private Finance Initiative (PFI)? This is what happened in Norwich re the new hospital: ".... It is estimated the NHS will pay Octagon [the developers] more than £1 billion over the course of the Private Finance Initiative (PFI) – nearly five times the cost of building and opening the hospital." So good use of public money? And who were the winners .... public or developers? And I wonder how many Tory cronies were involved in that one.

    Report this comment

    Johnthebap

    Friday, April 21, 2017

  • Nice one 'Macke' ... it is people like you who keep us informed .... we cannot rely on our local TORY elite rags as they are just looking after themselves (and the Tories .... and the elite). Maybe you would now use your skills to look at the selling off of council flats in London .... not saying anything is connected, but just a research project.

    Report this comment

    Johnthebap

    Friday, April 21, 2017

  • McLean- I was taking Visionary's comment in relation to this article rather than my wider interests, which I thought was appropriate given my original comment was based on this. Whilst I did mention Local Government reform in my reply, this was to put my views into context- but thanks for your input

    Report this comment

    IpswichBristol

    Friday, April 21, 2017

  • You're campaigining on local government reform but don't have an agenda?? I'm not sure your campaigning is going to be very effective is that is the case.

    Report this comment

    McLean

    Friday, April 21, 2017

  • Hi Visionary- all of my posts on here are centred around one thing- a desire to see Ipswich become a better place- which includes campaigning on local government reform- but also celebrating good news like this. I'm not sure why you think I am naive or have an agenda?

    Report this comment

    IpswichBristol

    Friday, April 21, 2017

  • Surprised no private bank seemed prepared to make this investment, but very fortunate timing all the same. Somehow, I don't think we have heard the end of this. ps. whoever lies behind @IpswichBristol, I admire your naivety and wonder about your agenda.

    Report this comment

    Visionary

    Friday, April 21, 2017

  • I checked back on other articles in the star on the wine rack to discover that John Howard was the financial backer of Ben Gummer , he also bought the EADT-ipswich star site in the docks ., just saying what a coincidence this all is ., more public money heading to the waterfront .

    Report this comment

    Macke

    Friday, April 21, 2017

  • Calm down a bit! This isn't a 'gift', it is a loan! The HCA has £1.2bn of funding to help bring housing forward- and this hasn't just magically appeared since the election was announced- and it is great to see some of this money used in Ipswich. With residential prices on the up in Ipswich I would be confident that it will be a good investment for the public purse. Great news for town, and look forward to seeing it completed. We should thank developers such as John Howard who have the skills to bring forward what is a very complicated project.

    Report this comment

    IpswichBristol

    Friday, April 21, 2017

  • Shocking use of PUBLIC money ... but the public has NO SAY! Reminds me of when the Tories in London sold off Council flats for £1 and allowed developers to make a killing.

    Report this comment

    Johnthebap

    Friday, April 21, 2017

  • At a time when there is no public money for our health service or care for the elderly or filling in pot holes or giving a wage rise to lowly paid workers or repairing crumbling schools - public money that apparently doesn't exist is being used to subsidise a property developer to complete a project like this. And it will probably be occupied by those who can afford the price, not those that need a roof over their heads. Disgraceful! With money bing splashed around like this anyone would think that there was a election around the corner - bon change little Ben, your odds just shortened!

    Report this comment

    Citizen

    Friday, April 21, 2017

  • Great. So John Howard bought this monstrosity in 2014, now in 2017 the public purse is going to pay for it to be completed. How does that work then? Perhaps the government would like to subsidise the repairs on my flat-I'll put a plaque up thanking them.

    Report this comment

    james n

    Friday, April 21, 2017

The views expressed in the above comments do not necessarily reflect the views of this site

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