Agenda item

(Asset Management & Economic Development Portfolio Holder) to consider the attached report (C-018-2018/19).

Decision:

(1)  That the offer from Durkan Estates was accepted (subject to contract and other stipulations set out in the EFDC tender pack) at £3.55 million on the basis of a development of 36 homes. 40% of the homes must comprise affordable housing, and the best Durkan offer was on the basis of the affordable element comprising 75% affordable rented and 25% shared ownership ratio; and

(2)  That delegated authority was granted to the Service Director Commercial and Regulatory Services in liaison with the Asset Management and Economic Development Portfolio Holder in order to effectively react to and agree any change in value that may arise from the conditions of the offer.

The Asset Management and Economic Development Portfolio Holder introduced the report on the disposal of Pyrles Lane Nursery.

The meeting noted that the marketing had been carried out by Allsop, as directed by the Council and instructed by the Estates Department. The tender was subject the stipulation of providing two prices, one for affordable rented comprising 100% of the affordable housing, and a second price based on 75% affordable rented to 25% shared ownership ratio. Three offers were received, with two providing prices for both scheme options. The existing use of the site by the Council for tree/landscaping services would be moved to the Town Mead Depot, with works to the units at Town Mead for these purposes being planned in conjunction with the proposed disposal of Pyrles Lane Nursery.

Although the Durkan Estates offer was slightly below that of the other tender, that tender was conditional on full detailed planning permission. Therefore the Durkan offer was the most financially advantageous result for the Council in either of the two development scenarios, given that this offer was most likely to proceed to completion and in a timely manner, while maintaining social benefit of affordable housing for the community in this area. In addition, Durkan had a proven track record in delivering successful development schemes of this nature with Local Authorities.

Decision:

(1)  That the offer from Durkan Estates was accepted (subject to contract and other stipulations set out in the EFDC tender pack) at £3.55 million on the basis of a development of 36 homes. 40% of the homes must comprise affordable housing, and the best Durkan offer was on the basis of the affordable element comprising 75% affordable rented and 25% shared ownership ratio; and

(2)  That delegated authority was granted to the Service Director Commercial and Regulatory Services in liaison with the Asset Management and Economic Development Portfolio Holder in order to effectively react to and agree any change in value that may arise from the conditions of the offer.

Reasons for Proposed Decision:

The Council had adopted a policy of maximising the benefits, both financial and social-economic of its assets. As part of this process, a programme of estate rationalisation has been undertaken, which had led to a number of new housing and commercial development projects. The disposal of Pyrles Lane Nursery was consistent with this policy. Acceptance of the offer from Durkan Estates, on the basis of 75% affordable rented and 25% shared ownership, maximises financial value for the Council while providing affordable housing options as a social-economic benefit.

Other Options for Action:

Alternative options were:

(i)            Do not accept the offers and bring the property back to the market. We would not however anticipate improving on the existing offers, as the offers received are in line with the external valuation advice provided by Allsop.

(ii)           Do not accept the offers and leave the property in its current use. However, the Council had made alternative provision via the Town Mead Depot and does not have a long term operational need to use the space.

(iii)          Do not accept the offers and seek an alternative form other than residential use. However, this was previously rejected following the Cabinet meeting of 11 July 2017.