| State the Delegated Authority that you are relying on in order to make the decision | Executive Report – Disposal of Land at Centre Square for the purposes of Commercial Development – 6th September 2016:- … b) approves the conditional freehold disposal of land at Centre Square, to Ashall Projects Ltd, for a consideration equal to Market Value, which is reflective of abnormal costs and subject to independent validation; c) approves that the final disposal terms be reported to the Deputy Mayor / Executive Member for Regeneration; d) approves that the sale would be: i. subject to securing reasonable planning approvals; ii. subject to submitting a planning application within three months of completion; iii. subject to, within six months of securing planning approval, the buyer secures a pre-let for the first development phase of a term not less than 20 years; iv. subject to the Council securing an option to buy the land back, in a reasonable timescale, should the development not progress; and, v. phased release of a first phase development parcel to commence the scheme, aligned with an option to unlock the remaining development phases; e) delegates the determination of all contractual terms, to the Executive Director of Economic Development and Communities and Strategic Director of Finance, Governance and Support, following consultation with the Deputy Mayor / Executive Member for Regeneration; |
| Subject of decision | Proposal to vary contractual terms: The proposed disposal forms part of the Council’s Accommodation Strategy and was authorised by Executive on 6th September 2016. Authority is now being sought for a variation to the original sale contract dated 18th January 2017 so as to allow the transfers for Plots 2a & 2b to be completed now, at a nominal sum,of £1.00, and for the calculation of the Plot Prices to be deferred until commencement of development as the Abnormal costs to be deducted from the sale price cannot be quantified until there is the basis of a finished design scheme. The calculation of the respective plot prices will be deferred until the trigger date in the variation of contract, the trigger date being the date of commencement of development of Plot 2a and/or 2b. The current sale contract provides for a delayed payment of the purchase price until commencement of development and this is not changed by the variation to the sale contract, the delayed payment of purchase price is protected by a legal charge in favour of the Council. |
| Text of decision | The Buyer has advised the Council that it will not be in a position to quantify the Abnormals to the Council’s satisfaction until there is the basis of a finished design scheme. The variation to the sale contract provides for the following :- (1) that Plots 2a & 2b are transferred for a nominal consideration of £1.00 (2) On the trigger date the calculation of the Plot Price is made pursuant to the mechanism in the original sale contract (3) The trigger date is defined in the variation as the date of commencement of development of Plot 2a and/or 2b. (4) Payment by way of an ‘additional plot price ‘ is to be made to the Council 10 working days after agreement or determination of the Plot Price (although this depends on the level of quantified abnormals when the calculation is made and whether or not it produces a positive or negative amount) |
| Reason for decision | The buyer is presented with two conflicting requirements:- 1. To satisfy the commercial pre-let market, the buyer requires a secure interest in the subject land i.e. Plot 2a and/or Plot 2b, but under the terms of the current agreement is not able to do so until full abnormal costs have been ascertained 2. The buyer is not in a position to ascertain the full abnormal costs until a final detailed design is derived from pre-let negotiations. |
| Other options considered (if any) | No other suitable proposal has been identified to ensure the buyer is not prevented from facilitating commercial development of future phases of Centre Square due to the conflicting requirements of the existing contractual obligations and the commercial market position. |
| Has an Impact Assessment been carried out - if so please attach a copy to the decision using the upload attachment screen which follows | No |
| Declarations of Interest by any member or relevant local government body | None |
| Who have you consulted as part of the decision making process | • Executive Member for Regeneration, Councillor Ashley Waters; • Legal Services; • Valuations and Estates; and • Economic Growth and Infrastructure. |
| Date of decision | 2 April 2020 |
| Service area | Growth & Place |
| Name of Delegated Officer making the decision - i | Kevin Parkes (Executive Director of Growth and Place) and James Bromiley (Director of Finance, Governance and Support) |
| Name of the Officer making the decision - If power has been sub-delegated to another officer | |
| Issue date:- | 6 April 2020 by Bernie Carr |
| Creation date:- | 3 April 2020 11:51:46 by Karen Sproston |
| Background paper/Impact Assessment | Delegated decision form (320K/bytes) |