Agenda item

The Portfolio Holder for Growth & Prosperity (and Deputy Leader) to submit a report proposing phase 1 of the asset development programme.

Cabinet:

 

1)    NOTED the Corporate Assets Development programme and approves the approach for phase 1 relating to the development proposals for Phoenix House and Cattle Market North site, as well as the potential redevelopment of Parkside, as identified in Section 5 of the report;

2)    RECOMMENDED TO COUNCIL the inclusion of £285k within the Capital Programme for the Asset Development Programme Phase 1 funded through £163,000 grant funding and £122,000 from the Council’s capital receipts as set out in section 9 of the report;

3)    APPROVED to Delegate authority to the Director for Growth and Regeneration in consultation with the Portfolio Holder for Growth and Prosperity to procure and appoint consultants and contractors to enable the use of this funding;

4)    APPROVED to Delegate authority to the Director for Growth and Regeneration in consultation with the Director for Corporate Services to sign the grant agreement following relevant due diligence.

5)    APPROVED the disposal of land at North cattle market site, as identified in appendix 2 with delegation to the Director or Growth and Regeneration to finalise any associated legal documentation.

5)

Pranali Parikh, Director for Growth and Regeneration introduced the report, the purpose of which was to propose Phase 1 of the Asset Development

Programme.

 

Ms. Parikh outlined the Phase 1 proposals for the Council's land and property assets (for Phoenix House and the Cattle Market North) and highlighted the work undertaken to date (assessing the development potential of relevant assets, creating a new corporate property and assets team and securing £500k business rates pool  grant funding, which the Council would match-fund with £375k).

 

Ms. Parikh highlighted that this was a long-term development programme, using a self financing model to develop the first phase of sites to generate capital receipts or revenue income, which would be reinvested in development of the space.

 

Ms. Parikh summarised the actions, which would be taken over future months relating to design and visibility, as well as commercial negotiations which would include engagement with occupiers of the buildings.  She highlighted that Phoenix House did not currently prove financially beneficial, as its expenditure and the income it generated were similar.  It had the potential to be developed, due to its location or to be disposed of in order to generate a capital receipt.  Proposals would be submitted to Cabinet in May 2021.  Disposal of the Cattle Market North site was proposed to generate a capital receipt for reinvestment either in the development of Phoenix House or another asset.

 

Councillor Leigh Higgins, Portfolio Holder for Growth and Regeneration (and Deputy Leader) advised of an amendment to recommendation 2 (at Section 2 of the report), which should reference Section 9 of the report (rather than Section 10).

 

Councillor Higgins advised that collaborative working with local Councillors was key and he welcomed Scrutiny Committee’s involvement, noting the value of the feedback they would provide.  Much work had been undertaken already and it was an ambitious project to make effective and efficient use of Council assets.  It was important to consider whether strategic assets were able to deliver strategic aims for the Council and if not, identify the best options for the Council.

 

Councillor Higgins highlighted that the aim of the Development programme was to create financially sustainable models to support future development of assets and reduce the need to borrow.

 

Councillor Higgins noted that the Cattle Market North site had long been identified for housing and it was anticipated that this would result in economic regeneration and maximise the Council’s gain.  Concerning Phoenix House, the Council had been in discussion with Partners who occupy the building, giving them advance notice of the possibility for disposal of this asset and working with them should they need to find another site.

During discussion the following points were noted:

 

• Members thanked Ms. Parikh and Councillor Higgins for their work.
• Members noted that some of the work on this project dated back to 2008 and that since the implementation of new governance arrangements work had gained pace (and updates on the work had been provided to Members).
• Members agreed the need to be commercially minded and anticipated that Phase 1 investigations would identify opportunities leading to financial sustainability.
• Members highlighted their support for the valuable services currently provided at Phoenix House, reiterating that partners should be worked with closely to ensure no loss of service to the community.
• There was concern over the impact a possible disposal of Pheonix House would have on strategically placed and successful community centres (at the Cove, Fairmead and the Edge) if services moved there.
• The benefit of these centres was hard to quantify but they undoubtedly brought much value to individuals, the community and the Council (including financially) long-term.
• Officers would give consideration to concerns raised and liaise directly with Portfolio Holders.
• Assurance was given that Phase 1 involved appraisal and evaluation of Phoenix House, in order to determine the best and most financially viable option for the Council (disposal of Phoenix House was an option to be explored but had not been committed to at this stage).
• Phoenix House was currently not deriving any financial value for the Council and would require investment long-term.
• Members recognised the need for regeneration, to enable the Council to maximise its finances and further invest in the projects to safeguard its future and bring community prosperity.
• Scrutiny would play an important role in identifying issues to be considered and providing feedback to help inform decisions.

 

 

 

 

Cabinet:

 

1)    NOTED the Corporate Assets Development programme and approves the approach for phase 1 relating to the development proposals for Phoenix House and Cattle Market North site, as well as the potential redevelopment of Parkside, as identified in Section 5 of the report;

 

2)    RECOMMENDED TO COUNCIL the inclusion of £285k within the Capital Programme for the Asset Development Programme Phase 1 funded through £163,000 grant funding and £122,000 from the Council’s capital receipts as set out in section 9 of the report;

 

3)    APPROVED to Delegate authority to the Director for Growth and Regeneration in consultation with the Portfolio Holder for Growth and Prosperity to procure and appoint consultants and contractors to enable the use of this funding;

 

4)    APPROVED to Delegate authority to the Director for Growth and Regeneration in consultation with the Director for Corporate Services to sign the grant agreement following relevant due diligence.

 

5)    APPROVED the disposal of land at North cattle market site, as identified in appendix 2 with delegation to the Director or Growth and Regeneration to finalise any associated legal documentation.

 

Reason for the decision

 

This proposal will help support the Corporate Priority of Delivering sustainable and inclusive growth in Melton by confirming plans, committing funding and developing our assets to generate income and provide housing and jobs growth.

 

This proposal supports the aspirations within the Council’s Corporate Strategy to maximise the value of the Council’s property portfolio ensuring effective and efficient use. It also supports the effective utilisation of grant funding secured for this purpose and will help the Council maximise the development potential of some of the assets which is not being realised currently. It will assist by reducing liabilities and cost of repair, maintenance, business rates, utilities and operational arrangements for the Council’s assets.

 

The development of these two sites could potentially generate over 120 homes. This will help achieve the objectives of the Council’s emerging Housing Strategy and contribute positively to achieving the Local Plan target of building 6175 homes by 2036.

 

Redevelopment of these sites will help revitalising the area by creating an opportunity for a high-quality gateway development on the edge of town centre.

 

According to the House Builders Federation, house building creates 1.2 construction jobs for the build, this would equate to approx. 144 full-time-equivalent jobs for the duration of the construction project.

 

By combining complementary services together in a prominent, accessible and sustainable location the proposals will also reinforce the use of Parkside as a shared service hub and consolidate operating costs and reduce duplication amongst a range of public sector partners. Should a feasible proposition be developed it would assist in generating additional income for the council and mitigating the lost income arising when the County Council vacates the building from December 2021.