Agenda item

(Director of Neighbourhoods) To consider the attached report AMED-007-2015/16.

The Director of Neighbourhoods presented a report to the Cabinet Committee regarding the results of a Marketing Exercise for an Operating Partner at North Weald Airfield. The Director introduced Mr O Fursdon, a director from Savills, who were the Council’s Agents. Savills had been commissioned by the Council to undertake an Expressions of Interest soft marketing operation at North Weald Airfield. Mr Fursdon would be presenting the Expressions of Interest received when the meeting went into private session.

The Director advised that the Council had over time, commissioned a number of studies in relation to the future of North Weald Airfield.  As a result of the most recent review, undertaken by Deloitte’s in July 2013, Cabinet resolved that the preferred option was that the Council pursued a mixed aviation/development option, subject to the outcome of the Local Plan. As part of this consideration of the future of the Airfield, Members also requested that pro-active steps be taken to maximise aviation activity on the site. The Cabinet agreed to seek an operational partner to promote aviation and the associated uses and officers were asked to appoint marketing agents.

Since the Council acquired North Weald Airfield from the Ministry of Defence, a number of general aviation, commercial and leisure uses have been developed on the site. However, these have largely been as a result of incremental organic growth and not as a result of any clear strategic policy direction. As an asset of considerable value and potential, the Council had commissioned a number of reports, in order to assist in determining the best future for the site. The most recent piece of significant strategic review work was undertaken by Delloitte. The Cabinet considered the conclusions of the Deloitte Study in July 2013 and concluded that aviation should be retained and that the residual of the site should be promoted for mixed use development, as part of the Council’s Local Plan. To inform the Local Plan a Masterplanning Exercise was undertaken for North Weald Bassett, which now forms part of the evidence base.

Having determined that aviation should be retained in the longer term, Members asked that pro-active steps be taken to maximise the aviation use of the site. This was not only to make best use of the asset but recognised that aviation activity currently required a degree of subsidy. Therefore increased revenue was required to offset the Council’s costs in maintaining the considerable amount of infrastructure and staffing resource, required to operate flying safely.

In order to take this objective forward, Property Consultants Savills were appointed to undertake a soft marketing exercise, to obtain the views of companies operating in the aviation industry. This exercise indicated that there was a level of interest in North Weald Airfield and concluded that some form of operational management agreement would be the most attractive offer. This was reported to the Cabinet in July 2014, who agreed that as a result of this finding, a more formal marketing offer should be developed.

The Council’s Consultants, Savills, prepared a marketing brochure which was advertised within the Aviation Trade Press, seeking more formal expressions of interest. This brought forward a number of interested parties. Two days of well attended Airfield site visits were held, in order to provide the opportunity for potential bidders to understand in greater detail the condition of the site, how it was currently managed and the current mix of tenants and uses.

A closing date for Expression of Interest was set, which resulted in three bidders submitting formal proposals.  After the closing date, a further expression of interest was received on behalf of an existing tenant at the Airfield.  Subsequent clarification now indicates that the tenant was not necessarily interested in entering into any agreement for the wider management of the Airfield, but would like to work with any potential future operational partner appointed by the Council.

The three parties who expressed an interest, were asked to provide details of their Company Structure, their Skills and Experience, their Financial Standing and their Vision for the Airfield.

These proposals have been analysed. Each party had also been interviewed by Savills and Officers, in order to seek clarification and a greater level of understanding of their submissions.

This marketing exercise was not a formal procurement process, the proposals contain information that was commercially sensitive and contain details of business planning and financial modelling, that each party would not wish to be shared in public. This was particularly true as they have expressed a desire, to be included in any future formal procurement process. On this basis, the three proposals will be presented to Members by the Council’s Consultants in Part II of the Committee Agenda.

Members will therefore have the opportunity to assess the merits of each proposal and seek to identify, not necessarily a preferred aviation partner at this point from the current bidders (as this had not been a formal procurement in line with OEJU regulations) but rather a preferred general approach and potential next steps, to recommend to Cabinet.

Resolved:

(1)        That the Cabinet Committee considers the Expression of Interest proposals, resulting from the marketing exercise seeking an aviation operational partner.

(2)        That based on consideration of the proposals, the Cabinet Committee recommends to a future Cabinet meeting, any preferred approach and recommended next steps, to achieving the Council’s objectives in relation to aviation activity at North Weald Airfield.

Reasons for Decision:

In accordance with the original Cabinet request to seek to maximise aviation activity at North Weald Airfield.

Other Options Considered and Rejected:

Alternative approaches that could be considered are to seek to improve the use of the Airfield utilising solely in-house expertise or to dispose of the Airfield, which would mean less future direct control for the Council.