West Somerset Railway General Discussion

Yes I understand that 'mortgage' option, however it doesn't really advance the WSR. Let's say the freehold is sold to the plc for £3m. They would then have to find £14k per month (with thanks to @johnofwessex) to service the loan. They would then still need approx £3m to fund infrastructure improvements-where would that money come from? It can't be secured against the freehold as that's already security for the loan to buy it. So you're now paying out £14k pm and you're really just back to the current position wrt lending or repairs. Maybe I'm missing something?

Keith

 

Slightly "off thread". Have just visited Burnham on Sea (in the rain). Noticed a very smart S&DJR style signal box on the site of the old station near the seafront. Haven't been past Washford lately but I guess that that is where this one used to be. Well done S&DJR for finding a suitable home for one of their treasures.

 

This only holds good if SCC want to sell a non-remunerative asset, such as if they needed additional capital to fund a more profitable venture. However, SCC could use the freehold as security for a venture loan. Why should SCC give the WSR a multi-million pound subsidy in the form of a cut-price deal on the freehold?
If it is just that the sitting tenant wants to buy, then its price will be just as much as the seller can wring from the buyer.
If SCC just sits tight, and the WSR fails completely, then the lease ceases to be, and SCC is sitting on several hundred acres of brownfield.
If SCC sell to the WSR at anything but the highest possible price, and the WSR fails, there would be some very difficult questions for the council about the transfer of that valuable property to banks or 'WSR Residual'.

 

Deserves more than a like

It seems to me that

1. There are a lot of questions arising from the PDG meeting that it would be good to see answered in order to help us understand the proposals, and
2. The assumption seems to be that SCC will sell the Freehold, how realistic is that?

 

I think the concept is that the SCC would sell it to the WSR for a lot less than £3M - because with the PLC lease in place, it's worth a lot less to almost any other buyer. So the SCC could reasonably argue that the land's true fair market value is that lesser number. (That reduced price would also reduce the interest expense - at least on any loan taken out to buy the land.) The land could then be used as security for a larger loan.

The thing I don't like about the PLC owning the land, to say it again, is that if the PLC fails, the land will probably be irretrievably lost. But this is a risk the WSR community would have to decide on.

A better scheme would be to have a charity buy the land, at the reduced price (which would be easier for the SCC to justify, since as with any other purchaser, with the lease in place, yadda-yadda.) Once the sale is complete, the charity and PLC could then agree to modify the lease in a way that makes it possible to mortgage the land for something closer to its true, un-encumbered vale. The PLC might agree to that if it got something in return - e.g. if the charity's goals are drawn correctly, it might take on the track replacement.

The problem with any such scheme (if charities can even mortgage land they own - can one of the lawyers here please enlighten me on that) is that if the charity can't pay the interest, the land (as the security) could still be lost. (Although there are intermediate paths, such as selling a few parcels which are not critical, in order to raise cash for other needs. Keeping all the land would be nice, but it might be a luxury the WSR cannot afford. Another decision for the WSR community. A peaceful and united WSR might be able to appeal to the wider heritage community for help to keep all the land, for future needs - I know that if the land were securely bound to a member-driven charity, I'd be happy to contribute to it for that purpose.)

The fundamental problem is that there are two different, and conflicting, goals: i) secure the land in perpetuity, and ii) utilize the value in the land for other things. One can do either - but not both at the same time. Again, a decision for the WSR community.

Noel

 

I always thought that Glastonbury was where all the belief in unicorns, mystical and magical thinking took place.

No doubt it will be revealed that the Minehead branch follows the ancient ley lines. I suspect that there will be an incident if King Arthur does return, he is a bit too Southern for some down Minehead way. I guess they believe that the once and future king will be a double red engine (maybe this is what all the trackwork is in aid of?).

What I do not understand is this. Given the issues associated with the basic survival of the line, why is the freehold suddenly an issue again? The lease is secure, the rent minimal etc etc.

Of course, one argument is the money and the ability to sell off land.

The other is this. It further reduces the checks and balances on the board. The Bailey proposals as argued are about reducing control over the board, outside of that there is the fact that the SCC owns the trackbed and does have leverage over the board because of this.

SCC have already sent the PLC away with a flea in their ear once over the trackbed, by bringing the charities to heel, this will ‘answer’ SCC’s main reservation.

 

Would anyone here buy a 2021 annual pass for the WSR?

I fear sadly that my trip on on the line in December was my last

 

Do not forget that the original railway to Glastonbury, the Somerset Central Rly, was a broad-gauge off-shoot of the B&ER, so really it's all the GWR's fault anyway for opening up the place.....

 

I think you have to ask, What, or who is pushing this so hard? and what the possible motive is for acquiring the freehold.

 

Having just read Patrick’s newsletter regarding things going on at the SVR, it seems very open and honest.
What railway would anyone choose to join?

 

I would suggest that it is totally unrealistic to expect the SCC to release the freehold of a long length of land to any company or organization that might simply want to sell chunks of it and thereby spoil the local environment for its own ends.

 

It is almost as if someone wants their own 12 inches to the foot scale railway and that only one person is allowed to play trains.

 

I may have missed something, but will the Council want to sell the freehold? If they sell to the plc, which will then be free to sell on, I can see some plum sites being sold off for housing; why would the Council want to give anybody a windfall like that? If the Council does sell, the price will surely reflect the 'hope value'.

 

If they did, the good old council taxpayers may well ask some difficult questions. Especially if the Council is not selling at full value, i.e. taking into account the 'hope value' as regards redevelopment.

 

I wouldn't be happy about any disposal of the freehold, which leaves it in the control of the plc either directly, or through a tame supporters association.

 

The other thought that came to my mind is that SCC will almost certainly have much bigger fish to fry at the moment: notably the impact of Covid on local public health and social care (both County Council responsibilities); and adaptation of all the other services for the current environment; as well as adaptation of their own staff working arrangements. That is a huge amount of change and concomittant management / political capital tied up in that. Then there is working out their own medium term financial strategy, which may well involve thinking about reducing their office estate etc. Deciding what to do about some small parcel of land leased to a third party will have a much lower priority in amongst all that. Even if there were a presumption of a sale, I can't see there being the capacity with SCC to move very fast; probably not fast enough to make much odds to the survival or otherwise of the WSR.

If they had any sense, if anyone came asking, they'd just need to say "very interesting, we'll get someone to look at the issues and feasibility right away" and then get their land and property people focused back on the 1001 far more pressing issues in their in trays.

Tom

 

If you read my previous post, No 32942, I explain how the Plc, as the leaseholder, can buy the freehold for less than its open market value.

 

I was peripherally involved with the sale of the current lease and I don't think that's how it works. SCC could quite easily not want to be in the business of owning a railway line.
Although some posters here seem to think it, the Plc board are not complete idiots, nor do they all spend all their time in cloud-cuckoo land. If they say the acquisition of the freehold is vital for the financial survival of the railway, it means there is a way to buy it for less than it's open market value, presumably because they are the leaseholders, and that someone has looked into this and found that it is at least feasible given the will. This means it is highly likely that someone has already established that there are no rules to say that the Council cannot sell it with the lease in place at its open market value, or a slight premium.