Teesside hustle
Deal of the century , Issue 1677 COMMERCIAL terms agreed in principle for a new data centre on the former steelworks site on the south bank of the Tees show how the publicly funded regeneration of one of the UK's most deprived regions has turned into a £500m-plus enrichment scheme for a couple of local businessmen, and one of the greatest taxpayer rip-offs on record.

The Eye has learned that the deal being negotiated between US AI giant Anthropic and Teesworks Ltd, a company 90 percent-owned by local businessmen led by Chris Musgrave and Martin Corney, which has been given rights to exploit the regeneration by Tees Valley mayor Ben Houchen, includes the following terms:

• Anthropic will pay Teesworks Ltd £222m for 222 acres of land that the latter will itself acquire from Houchen's South Tees Development Corporation (STDC) for around £280 under an option it holds to buy land at £1 per acre (plus inflation from 2021).
• The AI company will pay Teesworks Ltd a further £40m for access to power from a private wire network controlled jointly by Corney, Musgrave and an independent power company.
• If a certain amount of power (equating to around 1,400 megawatts) is available from this network by 31 December 2029, Anthropic will pay Teesworks Ltd a further £166m; if delayed, this becomes £88m.

Minimal costs
The data centre deal will therefore soon yield £262m for Teesworks Ltd, and probably £428m in total in the not-too-distant future. The company may have to repay remediation costs incurred by the publicly owned STDC on the 222-acre site, but these are unlikely to reduce its gain below £400m.

Since Teesworks Ltd has already made £135m profits by cashing in on land and valuable metals left on the site (see Eye 1660's special report Stripped Tees last October, free at www.private-eye.co.uk/special-reports), the latest deal will see its haul pass £500m – and with more than 1,000 acres of developable land still available.

Watching their figures
Teesworks Ltd is owned 45 percent by Musgrave, 40.5 percent by Corney and his family, 4.5 percent by chartered planner Chris Harrison, and 10 percent by STDC – although profit-sharing arrangements mean the latter won't take any of the latest spoils – so Corney and Musgrave's shares will go well into nine figures.

Musgrave decamped to Dubai three years ago and, little seen in the UK, looks well positioned to extract his bounty tax-free.