The Tory Tees Valley Mayor has sought to ease concerns after claims that a 90-acre piece of land worth millions was sold for just £100.

Last month, Labour Middlesbrough MP Andy McDonald, citing a Private Eye article in Parliament, said the only economic growth being delivered at Teesworks “is into the accounts of Ben Houchen’s pals, Messrs Musgrave and Corney”. He alleged “industrial-scale corruption” at the UK’s largest freeport and claimed that land at a 90-acre site was bought for just £1 an acre.

However, documents seen by the Local Democracy Reporting Service show that the land, which will soon be home to offshore wind factory SeAH, was disposed of for £15m. It is also understood that two separate valuations, from assessors registered with the Royal Institution of Chartered Surveyors, put the land at £13m and £11.8m.

Concerns were raised about the land being sold for £1 an acre after the amount noted on a transfer document from HM Land Registry was £96.79 plus VAT. However, Tees Valley Mayor Ben Houchen confirmed that developers Chris Musgrave and Martin Corney paid South Tees Development Ltd £15m for the land.

Mr Houchen said that a separate valuation was carried out specifically for the SeAH site. He added: “Otherwise, the whole [Teesworks] site would be worth minus hundreds of millions of pounds but actually that one site had value and that value should be realised by the public sector because we already had an arrangement in place.”

The estimated remediation cost for the rest of Teesworks, excluding the 90-acre site, was £482m and a nominal value of £1 was placed on the entire site. So far, there has been £246m of public funding ploughed into Teesworks with no further taxpayer cash expected, leaving more than a £200m shortfall. This will be plugged by the private sector.

The £450m SeAH scheme, which should be up and running by the end of next year, is expected to bring in £7m annually in business rates and £26m over the next forty years in rent. It will also attract 750 direct jobs and 1,500 indirect roles.

Australian investment bank Macquarie has bought the rights to the lease for forty years for tens of millions of pounds. This is an agreement between Macquarie and Teesworks that is separate and outside of the TVCA and SeAH agreement.

Instead of waiting for the rent to come in each year, Macquarie has paid for the forty years upfront so Teesworks can reinvest the cash back into the site.

The site will be leased to the TVCA for £3.65m per year but the combined authority will charge SeAH £4.3m in rent –the extra £650,000 will be kept by the TVCA, which equates to £26m over forty years.

Mr Houchen said: “The lease is index linked, so it’s £0.65m today but that is an index-linked lease so that £0.65m increases over time so it doesn’t disappear with inflation. It’s not a flat fee, it goes up with inflation.”

The mayor added that all of the lease arrangements were approved by the combined authority cabinet in March.

Originally, the South Tees Development Corporation held 50% of the shares in Teesworks Limited and private developers, JC Musgrave Capital and Northern Land Management Ltd held the other 50%.

However, an agreement was reached in 2021 which means JC Musgrave Capital, Northern Land Management Ltd, and DCS Industrial Limited now hold 90%. Teesside businessman Chris Musgrave OBE is the director of JC Musgrave, while DCS Industrial Limited has Mr Musgrave and Martin Corney at the helm.

The developers will also take in half of the income of the scrap from the Teesworks site. The most recent figure suggests the scrap amount has totalled £93m.

A Teesworks spokesperson said if Mr McDonald believed that criminal offences have been committed then he should “make a formal criminal complaint to the Chief Constable of Cleveland Police, and provide any evidence of a criminal nature, so that an investigation can occur without delay.”