The Manx Development Corporation (MDC) provided testimony on 16th September 2024 to the Economic Policy Review Committee, outlining their operational structure, strategic challenges, current projects, and financial outlook. The Committee heard from David Peach, Non-Executive Director and Dane Harrop, Managing Director.

Below are the key findings from their evidence session:

Operational Structure and Strategic Challenges

·         Established in 2021, MDC operates under the guidance of the Brownfield Regeneration Steering Group (BRSG), which includes high-level officials from various government sectors. All MDC business cases require prior approval from the Treasury, which is the sole shareholder. 

·         MDC has highlighted challenges in expediting land releases from government departments, which can often delay their projects. The corporation believes increasing land availability would significantly enhance their development capabilities. They have continuously communicated the need for faster interdepartmental coordination during quarterly meetings with BRSG. 

·         Additionally, MDC has proposed several policy changes aimed at expediting the development of vacant urban sites. For example, they have suggested that the policy around the provision of public open space should differentiate between greenfield and brownfield sites; and they have suggested a reduction in the number of years a building must lie vacant before its redevelopment can be zero rated for VAT purposes. 

·         Unfortunately, they have not yet received formal feedback on these proposals from the Built Environment Reform Programme (BERP).

Current and Upcoming Challenges

·         MDC anticipates completing its inaugural project, the former Nurses’ Home, in the first quarter of 2025. This project aligns with the Island Plan and Economic Strategy, providing much-needed housing for key workers and promoting sustainable urban living without reliance on cars. 

·         MDC is committed to sustainability, viewing it as integral to their projects, and benefits from reduced interest rates on funding contingent upon meeting specific sustainability criteria. In addition to Westmoreland Village, MDC is progressing plans for future developments, including a consultation on a multi-storey car park project at Parade Street East. Ongoing discussions are also being held with local authorities, including Douglas City Council, about potential land releases for upcoming projects.

·         Westmoreland Village will meet high environmental standards, aiming to create eco-friendly housing options adaptable for young professionals and seniors.

Finances and Returns 

·         MDC acknowledges that while their projects may not yield significant returns on investment, they remain a lean operation and are focused on rejuvenating sites that have historically been dormant. They expect to generate single-digit returns, contrasting with the double-digit expectations of private developers. 

·         Given that MDC are developing sites which are unlikely to yield significant returns by way of a straight “build and sell” approach, MDC intend to retain their buildings for a number of years. They will appoint professional managing agents to manage developments once they have been completed.

·         The rental prices proposed in their business cases are competitive with the private sector; however, by prioritising sustainability, MDC aims to offer reduced utility bills and lower overall costs for tenants, thereby making their developments financially viable for long-term sustainability.

·         As MDC continues to navigate its operational framework and develop key projects, it remains committed to enhancing the community through sustainable development and collaborative governance.