Caltongate developers funded Labour

The Times, Feb 20, 2008

A London-based development company behind one of the most controversial planning decisions in Edinburgh made a £4,000 donation to the Scottish Labour Party to fund a champagne reception at a time when the backing of party councillors for the project was crucial to its success.

A Times investigation has established that the donation was made by Mountgrange, the company which is developing the £300 million Caltongate project in the heart of Edinburgh's historic Old Town. The scheme, which envisages the demolition of some listed buildings, is bitterly opposed by conservationists.

The disclosure of the donation last night provoked outrage among the scheme’s opponents, who demanded an investigation into links between the former Labour council and Mountgrange.

Bob Cairns, a former Labour councillor, who left the post as convenor of planning in 2003 said the party had been “extremely unwise” to accept a donation from a firm involved in such a controversial planning application. “Personally, I wouldn’t have touched money from that source with a barge pole,” he said.

It is claimed that the donation was made when the future political control of the city was in doubt. It was expected that Labour would retain control - in fact the SNP now holds the balance of power.

Links between Mountgrange and the Labour Party have been the subject of controversy since last October, when it was disclosed that Donald Anderson, the former Labour leader of Edinburgh council, had been appointed Scottish director of PPS, the public relations company which has been promoting the Caltongate project on behalf of Mountgrange.

While still leader of the council, Mr Anderson had spoken out enthusiastically in favour of the Caltongate scheme in a newsletter published by PPS on behalf of Mountgrange, though he had stepped down from his position by the time the donation to Scottish Labour was published by the Electoral Commission on 20 March.

Then, on 19 April, two weeks before Labour were voted from office, the city council’s planning committee approved by nine votes to five the installation of an underground heating system, which formed the first phase of the Caltongate project.

Steve Cardownie, the SNP councillor who is deputy leader of Edinburgh City Council, said the revelation was “disconcerting news”.

He said: “This is an extremely controversial planning application which found support within the previous city administration. It merits further investigation to find just how deep these connections go.

“Although the new administration has determined recent applications, this still does raise question marks over the relationship between the Labour Party and the company and why the donation wasn’t made known prior to their application being submitted.”

Any donation to a political party has to be declared within 30 days. In spring 2007 Labour were still hopeful of remaining in power at national and local level. In the event it was unsuccessful on both counts, and for Mr Anderson, who resigned as council leader in August 2006, there was further disappointment as he failed in his attempt to be elected as MSP for Edinburgh South.

He established Anderson Consulting, a firm which, according to its website, offered “comprehensive advice on planning policy, and processes. We help make sure your project gets a fair hearing from the planning process, and that you are able to respond positively to concerns.”

Five months later it was found that he had taken up a new position as Scottish Director of PPS. He is still employed in that capacity but despite his seniority, the company claims that he does not to work on the Caltongate project.

However, in May 2006, while still leader of the council, Mr Anderson, enthusiastically endorsed Mountgrange’s plans in a glossy newsletter produced by PPS and distributed to households in central Edinburgh.

“The Caltongate development offers Edinburgh a terrific opportunity to transform this area from a neglected backwater into a vibrant, integrated part of the city centre. The mix of residential, commercial and public space will make this one of the most desirable locations in the city and regenerate an area that for too long has been allowed to run down,” he said.

Opponents of Caltongate include community groups and the Cockburn Association, Edinburgh’s civic trust. They have campaigned against the demolition of two listed buildings, and against the size and scale of the project which lies of land between the Canongate and Calton Road. However, in Mountgrange, they have found a powerful opponent.

The company was formed in 2002 by Manish Chande, its chief executive, and Martin Myers, his business partner. In 2004 Caltongate was one of five development sites in England and Scotland that the company bought from the Sofam Beheer BV for a total price of £60m.

Mr Chande is a former director of Land Securities, the UK’s biggest property company, and, with Mr Myers, joint founder of Trillium, which won a contract to own and manage the majority of the Department for Work and Pensions property portfolio – a 2bn deal that made it Britain's biggest commercial landlord.

More than 2,000 objections have been lodged against the Caltongate development. It earmarked for the site of a former bus garage on New Street. A PPS spokesman said: “Mountgrange has sponsored a number of events, including the Cow Parade in Edinburgh and the reception at a Scottish Labour Party business dinner.”

No-one from the Scottish Labour Party was available for comment.