The new report, which was featured in The Guardian, comes as part of a wider research project funded by the Economic and Social Research Council (ESRC): Manchester, The Centripetal City: The Lessons of Property-Led Regeneration For Core Cities and Their Proximal Towns.
Professor Adam Leaver, Professor in Accounting and Society and Director of CRAFiC at Sheffield University Management School, is the Principal Investigator for the project. He is working with colleagues from the Urban Institute: Dr Jonathan Silver and Dr Richard Goulding.
The research project examines the transparency, accountability and ethics of Manchester Life, a joint venture between Manchester City Council and the majority owners of Manchester City Football Club, the Abu Dhabi United Group (ADUG). Since 2014, the deal has built 1,468 homes in the city's gentrifying Ancoats district. 73.1% of these homes are for private rent and the remainder are for private sale. Within this development, no affordable housing has been provided and the deal's ethics have sparked controversy due to Abu Dhabi's human rights record.
The report, written by Leaver, Silver and Goulding, is a case study of an urban development project in the northern English city of Manchester between a local authority and a globally-mobile investment firm linked to Gulf state actors. It argues that, under the terms of the deal, the council allowed ADUG to hold all land leaseholds, property assets and income rights through subsidiaries registered in the secrecy jurisdiction of Jersey. ADUG also have majority control in the UK-based joint venture companies. This raises concerns about value for money and the protection of public resources, as well as key questions of transparency, accountability and local democracy.
The authors said, "the council has its own soul-searching to do on the ethics of its relationship with Abu Dhabi United Group. Given the contentious nature of this development, it was all the more important to be open about its economics. From the limited information available in the public domain - this looks like a bad deal for the council and its citizens. If you're comfortable taking the reputational risk, you should be sure to get the best price."
They added, "given the scale of the public resources committed, it is difficult to understand or defend the lack of transparency in this partnership. If the public are unable to identify basic things from a joint venture like the profit received by the private partner or the presence or otherwise of profit-sharing arrangements for the council, then there is no real accountability."
The impact of the project and the report is likely to fall into two areas. Firstly, it may encourage exploration of alternative urban development models in UK cities, e.g. community wealth building. Secondly, concerns over the geopolitics of real estate development and the purchases of cultural and sporting assets, such as Premiership football teams, by state capitalist actors linked to authoritarian regimes may be considering when future urban development is planned.
Download Centripetal Cities report (PDF, 10.4MB)
