An independent company set up by Dundee City Council to promote economic development in the city is making a higher profit as well as continuing to fulfil its purpose.
Dundee City Developments Ltd was formed about a decade ago in advance of a legislation change that prevented local authorities from setting up companies.
It borrowed money on the open market from banks to operate commercial and industrial units for rental by tenants, whose payments covered the loan charges.
The council already managed an extensive portfolio of commercial and industrial units, but there was felt to be a need for another means to fulfil that role and the company was formed.
A spokesperson for DCD said a further legislative change made it easier and more viable for councils to borrow money for such projects again.
The local authority returned to this approach, and an example was the borrowing of £4.6 million to fit out the new Sleeperz Hotel at the £22m redeveloped Dundee Station.
Sleeperz will pay higher rental charges to recoup that outlay.
“Dundee City Developments is not a big undertaking and it has only about six properties under its control,” the spokesperson explained.
“We decided to keep it as it is ticking over well, and we will probably keep it going in case there is a further change in circumstances and there is a need to make more use of it.”
Figures filed at Companies House show the company’s turnover increased 2.7% to £392,068 in the year to April 30 2014. This resulted in a pre-tax profit up 13.9% to £217,618.
The balance sheet shows tangible assets valued at £3.9m, revalued upwards by about £200,000 from 2013.
The company has a board of seven directors, a minority of whom are officers of the council, but it operates independently of the local authority.
Its activities are stated as to promote, encourage or assist in the promotion or encouragement of economic development, relief of unemployment or the advancement of education and training in Dundee.
It does this by “constructing factories and offices and providing grants for economic development projects likely to benefit the city”.