English Partnerships was today accused of ‘sabotaging’ an exclusivity agreement over a development site in Middlesbrough.

Local developer Chilli Developments says English Partnerships, the government’s regeneration body, and its regional organisation Tees Valley Regeneration (TVR) entered into a lock-out agreement to sell Chilli development land at the Middlehaven scheme at Middlesbrough Harbour in October 2004.

The company, run by managing director Simon Brown, is suing English Partnerships and TVR English Partnerships for around £10m for allegedly passing information about Chilli’s land holding to other developers in early 2005.

This led, Chilli says, to Quintain Estates being selected as the preferred developer for a 40 acre site which included five acres of Chilli’s land holding.

Bad faith emails

Chilli points to an email from TVR’s development director Paul James to TVR chief executive Joe Doherty as a sign of the ‘bad faith’.

‘it’s obvious they (Chilli) won’t be offered the deal,’ the email allegedly says. ‘They continue to believe they have a worthwhile proposition.

‘We all had our doubts about them. Unless we take this seriously there is a danger we will all have egg on our faces.’

The court heard that English Partnerships commissioned a report into Chilli’s plans for a 130,000 sq ft apartment block on five acres of the site.

The report allegedly said that there was too much wasted space in the Chilli scheme – and as a response English Partnerships allegedly increased the price of the land by £161,000 to £250,000.

‘We say this lock-out period was a sham,’ said Phillip Noble, acting for Chilli. ‘They never intended this agreement to reach fruition.’

English Partnerships and TVR are fully defending the claim.

The case continues.