A report from the Executive Director of Regeneration and Environment will be circulated as soon as possible. This should be read in conjunction with Report No.263, agenda part one refers. (Key decision – reference number 4442)

(Report No.264)

TO FOLLOW

(This document contains exempt information as defined in Paragraph 3 (information relating to the financial or business affairs of any particular person – including the authority holding that information) of Schedule 12A to the Local Government Act 1972, as amended)

Councillor Doug Taylor (Leader of the Council) introduced the report of the Executive Director of Regeneration and Environment (No.264).

NOTED

1.               That Report No.263 also referred as detailed in Minute No.6 above.

2.               Members’ questions were sought on the recommendations set out in the report and a full and detailed discussion followed on all aspects of the proposed land acquisition.

3.               The current terms on which the land was to be acquired and the planning restrictions in place with regard to designated Strategic Industrial Land. Members noted the on-going discussions that were currently taking place with regard to the potential future commercial and residential uses of the sites in question, as set out in the report. Members were advised of the terms of the purchase based on existing uses and the valuations which had been carried out in support of the proposed purchase price. The potential future financial implications for the Council were discussed, as set out in the report.

4.               The detail of the valuations and purchase report undertaken as set out in section 3.6 of the report. The recommended purchase price reflected the value of existing use as industrial, considering all current planning permissions. Councillor Sitkin emphasised the prudent approach that was being taken and, reiterated the potential implications of the on-going discussions with the GLA in moving forward with the future designated use of the sites in question.

5.               Members highlighted the need for a holistic approach to the Meridian Water development to be taken. It was reiterated that the purchase was based on existing designated use and the timeframes for the overall development were outlined. The long-term aspirations were highlighted.

6.               The importance of the Council having control over the future potential uses of the sites in question to support the overall aspirations of the Meridian Water development. The financial implications for the Council would be positive in considering the range of potential future uses of the land. Members were advised of the potential future uses of the sites in question by the current Seller should the Council not proceed with the acquisition. This could not only have a negative impact on the overall Meridian Water development proposals but would also potentially have a future financial impact on the value of the land.

7.               James Rolfe (Executive Director of Finance, Resources and Customer Services) outlined the detailed revenue and capital financial implications for the Council in proceeding with the land acquisition which would be within the Council’s prudential borrowing thresholds. The issue of potential meanwhile income was also addressed. Members discussed the annual revenue income predictions of both sites and the benefits that this could present for the Council. It was anticipated that there would be no adverse impact on the Council’s revenue position, as detailed in the report.

8.               That following the previous deferral of the decision from the Cabinet meeting on 26 April 2017, further due diligence work had been undertaken as requested by Members. Financial due diligence was ongoing to confirm the overall viability of the Meridian Water scheme, as highlighted in the recommendations of the report and set out in the decisions below.

9.               Councillor Taylor requested that recommendation 2.1 of the report be amended to include “in consultation with the Executive Director of Regeneration and Environment and the Executive Director of Finance, Resources and Customer Services”; as reflected in decision 1 below and in the decisions of the part one report (Minute No.6 above referred).

10.           That the decisions included a recommendation to full Council for an additional capital fund to be made available to the 2017/18 capital programme to support the acquisition, decision 3 below referred. Excluding the recommendation to Council, the decisions taken would be subject to the Council’s call-in processes.

Alternative Options Considered: NOTED, that the part one report (Minute No.6 above referred) addressed the alternative option of acquiring the Sites by CPO and acquiring the Sites at a later date. The part two report addresses the risks, as set out in full in section 4 of the report.

DECISION: The Cabinet

1.               Noted that the decisions below were subject to the demonstration of overall viability of the Meridian Water scheme. Cabinet agreed that authority to approve the overall viability be delegated to the Cabinet Member for Economic Regeneration and Business Development and the Cabinet Member for Finance and Efficiency in consultation with the Executive Director of Regeneration and Environment and the Executive Director of Finance, Resources and Customer Services. Subject to confirmation of the overall viability, the decisions below were recommended.

2.               Agreed to authorise and approve the purchase of the Stonehill Industrial Estate (Stonehill) and Hastingwood Industrial Estate (Hastingwood) for a total price, detailed in recommendation 2.2 of the report (exclusive of VAT) plus SDLT and fees as detailed in recommendation 2.2 of the report.

3.               Agreed to recommend to Council that the existing capital funding allocation for the Meridian Water programme be re-profiled to accommodate the immediate requirement and an additional capital fund, as set out in recommendation 2.3 of the report, be made available to the 2017/18 Capital Programme to support the acquisition.

4.               Agreed to authorise the release of the sum detailed in recommendation 2.4 of the report (+VAT) for the purchase of Stonehill. The structure of the payment was as set out in recommendation 2.4 of the report including the deposit, payment on completion and, payment 12 months following completion.

5.               Agreed to recommend that the Council Opt to Tax for the Stonehill Site. Confirmation had been received that Seller had elected to tax. This would allow the Council to recover the sum detailed in recommendation 2.5 of the report, in VAT liability. It also meant that the Council would charge VAT on future sales and leases at the Site.

6.               Agreed to authorise the release of the sum detailed in recommendation 2.6 of the report, for the purchase of Hastingwood (subject to existing long leases). The structure of the payment was as set out in recommendation 2.6 of the report.

7.               Noted that Hastingwood would be purchased on the basis of a Transfer of Ongoing Concern (TOGC) and therefore VAT was not payable on the purchase of this Site.

8.               Agreed to delegate authority to the Cabinet Member for Economic Regeneration and Business Development and the Cabinet Member for Finance and Efficiency, in consultation with the Executive Director of Regeneration and Environment and the Executive Director of Finance, Resources and Customer Services, to authorise and approve the purchase of the 1.09 acre site known as “The Triangle” site, if the option to acquire this Site from the Seller became available at market value.

9.               Agreed to delegate authority to the Cabinet Member for Economic Regeneration and Business Development and Cabinet Member for Finance and Efficiency, in consultation with the Executive Director of Regeneration and Environment, and Executive Director of Finance, Resources and Customer Services to approve the meanwhile strategy for Stonehill that would be recommended following further detailed appraisal of options and Due Diligence.

RECOMMENDED TO COUNCIL that the existing Capital funding allocation for the Meridian Water programme be re-profiled to accommodate the immediate requirement and an additional capital fund, as set out in recommendation 2.3 of the report, be made available to the 2017/18 Capital Programme to support the acquisition.

Reason: NOTED, the detailed reasons for the recommendations as set out in section 5 of the report.

(Key decision – reference number 4442)