Agenda item

The Executive Member for Regeneration and the Director of Regeneration and Culture submitted a report for the Executive’s consideration. The purpose of the report was to provide information on the building options that had been explored for the future accommodation of Council Staff and request approval for:

a)     a departure from Centre North East (CNE) being considered the preferred option due to changing circumstances;

b)     Fountains Court being the preferred option for the future accommodation of staff;

c)      the purchase of Fountains Court; and

d)     a delegated decision to the Director of Regeneration and Culture, Richard Horniman, and the Director of Finance, Ian Wright, with regard to expending the £200,000 contingency set aside in the investment strategy, should it be required.

 

Fountains Court was proposed as the preferred option, the key benefits of the option being that:

a)     The building had recently been vacated by Firstsource, therefore purchasing and occupying the building would prevent long-term vacancy, thus helping to meet the Council’s regeneration objectives.

b)     It offered the space and layouts required for staff. At approximately 38,000 sq. ft it could accommodate approximately 335 desks (5 per 10 people) and all previously assumed services, with the exception of the Customer Centre which would remain on the ground floor of Middlesbrough House. Furthermore, the building offered the flexibility to extend with modular space if required in the future.

c)      As the building would be fully occupied by the Council, there was no requirement for the Council to let the vacant space. That in contrast to the CNE option whereby the Council would be taking a commercial risk on vacant space needing to be let.

d)     A recent building survey had confirmed the building was in sound condition and although it required refurbishment, it would be possible to achieve a very high standard of fit out and an excellent working environment for staff. As it was by far the most economical option to purchase, a good proportion of the investment could be allocated to ensuring a high internal specification.

e)     It was by far the most economically advantageous option. Further due diligence and survey work needed to be undertaken to fully understand the costs, but it was anticipated that the cost of the purchase and fit out of the building could be accommodated within the original fit out budget for One Centre Square. If the detailed due diligence subsequently identified that could not be achieved, a request for an additional allocation of funding would be made prior to work starting. A saving of up to £6.8m would be made when comparing Fountains Court to a generic new build option of the same net internal area.

f)       Moving to Fountains Court would be achieved in a shorter timescale than the other options, particularly any new build options. It was estimated staff could begin to relocate there in autumn 2022.

 

If approved, the next steps would be:

·        design work and staff consultation to firm up the requirements;

·        tendering and a mobilisation period for the refurbishment and fit out. Any tendering work would take account of the preference to support local businesses and in turn the local economy;

·        on site works; and,

·        staff could begin to move there in autumn 2022.

 

OPTIONS

 

The Council could:

·        Do nothing - The principle that the Council should relocate to a new office building had been established by previous Executive direction. The Civic Centre would have required significant investment to bring it up to an acceptable standard and was not an economically viable option in the long-term.

·        Continue to proceed with the CNE option - The Council could have continued to proceed with leasing and occupying CNE. However, CNE was unlikely to meet the Council’s evolving needs and that would have resulted in higher costs and greater risks than necessary.

·        Pursue another option highlighted in the report - That was not recommended, predominantly because they were not as economically viable, carried greater risks and also prolonged the timescales for relocation.

 

ORDERED

 

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

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

REASONS

 

The last report to Executive on 27 October 2020 had identified that a further options appraisal would be required, as the Council’s needs had evolved, as had the wider property market.

 

The report outlined the Council’s updated requirements, and how those now fit against the current available options.

 

The report identified Fountains Court as the preferred option as it was the most economically viable option whilst still meeting the Council’s requirements and regeneration aspirations. It was recommended that Fountains Court was purchased with the intention of refurbishing the building, ready for staff to relocate.

 

The subject of the report had not been examined by the Overview and Scrutiny Board or by a Scrutiny Panel.