Issue - meetings

To consider the attached report.

Mover: Councillor A. Grigg, Commercial and Regulatory Portfolio Holder

Councillor A. Grigg presented a report for additional Capital expenditure required to undertake necessary alterations and the letting of the Council’s units at the Landmark Building.

Report as first moved ADOPTED

RESOLVED:

That a Capital supplementary sum of  £140,000 to undertake the necessary alterations and letting of the Council’s units at the Landmark Building be approved.

To consider the attached report (C-026-2018/19).

The Portfolio Holder for Commercial and Regulatory Services, Councillor Grigg, introduced the report seeking additional Capital to undertake necessary alterations and the letting of the Council’s Units at the Landmark Building.

With respect to the redevelopment of the former Sir Winston Churchill PH, now renamed the Landmark Building, in September 2013 the Cabinet approved the Heads of Terms of a Development Agreement for the site.  The developer’s financial appraisal for the development, which was verified by consultants appointed by the Council’s Estates & Valuation Team, assessed that it would not be viable to provide any affordable housing as part of the scheme.  However, the agreement allowed for the Council to retain both the freehold of the site and any income derived from the commercial units provided by the developer on the ground floor.  This was in accordance with the planning permission granted by the Council and was considered to be financially advantageous for the Council.

As handover approached, it was apparent that two significant issues needed to be resolved.  Firstly, the units themselves were only constructed to a basic shell specification and work was required to split the units and provide services.  In addition, the complexity of the legal arrangement which required consent for under lettings and access/servicing and alterations agreements has led to delay and the potential loss of two of the original potential tenants.  In hindsight, the Council should have been more specific in the original development agreement in 2013 to avoid these issues.  This is a key consideration in future negotiations of this type.

To date, the Council has incurred £56,000 of unanticipated specialist legal and construction related costs on the project.  However, in order to take the development through to completion and to be ready for occupation, a further £84,000 capital will be required.  This includes work to undertake the physical separation of the units, installation of additional services and further legal, project management and letting agency fees.  This would also include a contingency for minor works.

Councillor Murray commented that some of this expenditure should have been foreseen; the projects were pushed forward too fast. The Landmark site was disliked by the local community and did not meet local housing needs. Councillor C Whitbread said that they had carried out extensive consultation for a landmark building. Councillor Grigg noted that the developers had named the site, it had received planning permission from this council and as for the aesthetics of the building; beauty was in the eyes of the beholder. As for the income from the building, with all the spaces let it was anticipated that it would achieve about a quarter of a million pounds per annum.

Councillor C Roberts asked about the final occupation of the empty retail units of the Landmark building. Would it not now be prudent to consider a wider market for these units, for perhaps offices or start up businesses as an additional option other than retail outlets. We need to be sure more A3 was what the Broadways  ...  view the full minutes text for item 67