Three more years sought to repay Rothesay housing loan

The Old Courthouse development in Rothesay was completed in November 2010 - but sales of the 25 properties have been slow.
The Old Courthouse development in Rothesay was completed in November 2010 - but sales of the 25 properties have been slow.

A Rothesay-based housing association has asked for an extra three years to repay a loan from Argyll and Bute Council for a housing development in the town.

The authority has received an application from Fyne Initiatives, a subsidiary of Fyne Homes, to extend the repayment period on a loan for the Old Courthouse development until March 31, 2018.

A report prepared for the council’s community services committee states: “In November 2011 council approved a £1.9m three year loan to Fyne Initiatives, a subsidiary of Fyne Homes, for the redevelopment of the former Council Chambers and Courthouse in central Rothesay.

“This loan arrangement will cease on 31st March 2015. At the time of writing, eight properties had been sold and two were under offer. As the properties are sold the capital loan is repaid directly to the council and consequently the loan extension is for £754,300 less than the original loan.

“The revised loan amount would be £1,145,700. The rate of interest to be charged will be based on the PWLB [Public Works Loan Board - Ed] rate for a three year loan as at March 2015, adjusted for a margin of 0.25% to reflect administration costs and any further adjustments to ensure a market rate is charged to avoid any state aid issues.

“Fyne Initiatives have shown no difficulty in making the repayments of £754,300 as and when houses are sold. The accounts and business plan of Fyne Initiatives have been reviewed and from this no significant concerns have arisen to prevent the loan being extended.”

Members of the community services committee - among them Bute councillor Isobel Strong - will be asked to approve the application when they meet in Lochgilphead on Thursday, September 11.