Issue - meetings

The Executive Member for Environment and Finance & Governance and the Director of Finance submitted a report for the Executive’s consideration. The purpose of the report was to consider the proposal to dispose of the Council’s freehold interest in Whorlton Road Industrial Estate.

Shown edged on the plan, attached at Appendix A of the submitted report, the subject property was situated on Whorlton Road and occupied a rectangular shaped site measuring @ 2.18 Acres [0.88 Ha] in a prominent position on Riverside Park.

Whorlton Road Industrial Estate was relatively modern in its appearance, comprising several terraced industrial units of steel frame construction with blockwork to the lower sections, sheet metal cladding to the upper walls and a half pitched roof.

Whilst the Council was the freehold owner of Whorlton Road Industrial Estate, the property was subject to multiple leases and the Council currently also leased back the entire estate from Borough Properties.

In 1982 the Council entered into a 125 year headlease with Woodhead Construction Ltd, where the Council let vacant land to Woodhead Construction Ltd for the purposes of developing Whorlton Road Industrial Estate. Simultaneously, the Council also entered into an underlease with Woodhead Construction Ltd, agreeing to leaseback the completed development for a term of 35 years.

Borough Properties subsequently acquired those leases, and were now held on the headlease as a tenant, which had a term of 86 years remaining, and also on the underlease as the Landlord, due to expire in 2026. The underlease, which held the Council as the tenant to Borough Properties was due to expire in 2017, but in 2008 the respective leases were varied, extending the Council’s term as tenant up until 1 January 2026.

As well as the term being extended, other variations were made to the lease, which with the passage of time had considerably increased the Council’s liability and would continue to do so up until the end of the lease term, in January 2026.

An Asset Disposal Business Case confirming the status of the subject property, as surplus to operational Council requirements, was attached at Appendix C to Part B of the submitted report.

OPTIONS

Re-use for operational purposes - No Council operational service requirement had been identified.

Other uses - Given the property’s location and make up, no use other than light industrial would have been suitable.

Do nothing - The Council would have remained as a tenant under the existing terms, subject to the full obligations and associated costs of the Underlease until Jan 2026. Following January 2026, the Council would not have had the benefit of the asset until the Headlease came to an end in January 2107.

ORDERED

1.      That the information contained in Part A of the report be noted.

2.      That the decision be taken once all the financial or exempt information contained in Part B of the report had been considered.

REASON

In order to meet the Council’s requirements to generate capital receipts, increase annually recurring revenue streams, reduce future expenditure and  ...  view the full minutes text for item 93