Meeting documents
Executive (I)
Friday, 28th February, 2014
| REPORT TO: | 10 |
| DECISION NUMBER: | PH/23/2014 |
| EARLIEST DATE FOR DECISION: | 28th February 2014 |
LAND OFF HAWKING PLACE | |
| Matter for Consideration: The disposal of land off Hawking place, Blackpool Technology Park for the development of a new distribution centre. | |
| Information: The Leader of the Council previously agreed a disposal on a 125 long leasehold interest under PH/130/2013 on the 17th December 2013. The proposed tenant has requested amendments to the lease which are being reported below: Should the proposed tenant action the Surrender of Lease clause if they fail to obtain successful planning consent they would cover the Council’s costs and Stamp Duty Land Tax but would like interest to be paid on the sale price agreed. It is proposed the interest rate is set at the current Bank of England base rate of 0.5% payable on the sale price. The proposed tenant requires the permitted use to be unrestricted, previously B1, B2, B8 only from the Use Classes Order (business, general industrial, storage and distribution). Following negotiations the proposed tenant has agreed to restriction to B1, B2, B8 for the first 15 years of the lease term, after which time the use will become unrestricted. Currently the contract requires the proposed tenant to commence building a distribution centre within 12 months and complete within 24 months. The proposed tenant has proposed not to have an obligation to build and replace this with an option for the Council to purchase the land back at the sale price if the development has not begun within the time scale set by the Planning Decision Notice. It is usual for tenants to request consent of the landlord to seek consent prior to a lease being assigned, sublet or underlet, the proposed tenants’ position is no consent of this Council as landlord be required for the duration of the term. This will mean the lease can be assigned, underlet or sublet to another and Blackpool Council will not have control. The proposed tenant has put forward they will not seek the consent of Blackpool Council as landlord prior to obtaining planning consent in the future, they will apply using planning legislation only. The proposed tenant will create a drain in the Council’s retained land for drainage as the drainage network is at capacity, The proposed tenant to maintain this until such time as the Council’s other tenants link to the drain whereby Council will take responsibility and charge each tenant proportionately. | |
| Does the information submitted include any exempt information? | NO |
| Legal Considerations: Limited restriction on control of use for 15 years means the Council will not have any control of the use of land after this time. The only control will be by planning legislation. Removal of assignment clause means the Council cannot control who uses the site, the original tenant can assign the lease to any third party | |
| Personnel Considerations: None | |
| Financial Considerations: An allocation for interest will be required and the capital income received must be ring fenced in reserve funds pending potential recall of the money. The capital receipt received will be required to be held in reserves pending exercising option to purchase the land back. | |
| Performance Management Considerations: None | |
| Risk Management Considerations: Failure to secure planning consent would delay or cancel the proposed scheme, should such a scenario occur the proposed tenant will have an option to surrender the lease and the premium will be returned minus any costs which cannot be reclaimed, interest will be payable by the Council. A 125 year lease is proposed and control of the land is restricted to 15 years, this leaves no control for the Council as the freeholder after 15 years, the use could change without the need for the Council’s consent. The proposed tenant requires the deletion of the commencement date and completion date for the construction of a distribution centre on the land, but providing the option for the Council to purchase the land back if a distribution centre has not been built within the time frame set by the planning decision notice. This means there is no guarantee a distribution centre will be built, and the Council may have to purchase the land back and find an alternative buyer. The Council will have to hold the capital receipt in reserves pending any future exercising the option to purchase the land. No consent of this Council on assignment of the lease could result in any third party succeeding as tenant in the near or longer term and the Council would have no control in this respect. | |
| Relevant Officer: Alan Cavill – Assistant Chief Executive Tourism Culture and Regeneration | |
| Relevant Cabinet Member: Councillor S. Blackburn | |
| Consultation Undertaken: None | |
| Background Papers: None | |
| Is this a key decision? | NO |
| Is the decision required in less than 5 days? | NO |
| Recommendations: To consider the changes requested by the proposed Tenant. | |
| Reasons for Recommendations: The proposed disposal retains and relocates jobs in Blackpool, brings a capital receipt to the 2013/2014 financial budget, enables the construction of a new hi tech distribution centre in Blackpool and allows the Council to explore town centre strategies further. | |
| Is the recommendation contrary to a plan or strategy adopted or approved by the Council? | NO |
| Is the recommendation in accordance with the Council’s approved Budget? | YES |
| Other alternative options to be considered: 1.Not to dispose of the land although this will mean the distribution centre is likely to be constructed outside Blackpool. 2. Grant a freehold sale although this would be bad practice considering the Council owns the freehold of the land surrounding the subject land. | |
| Policy, Overview, and Scrutiny Committee Chairman (where appropriate) Date Informed: N/A Date Approved: N/A | |
| DECLARATION(S) OF INTEREST (if applicable) None | |
| Decision: The Leader of the Council resolved as follows: To agree the disposal subject to the terms requested by the proposed tenant. | |
| Date: | 28th February 2014 |
| Reason for Decision: The proposed disposal retains and relocates jobs in Blackpool, brings a capital receipt to the 2013/2014 financial budget, enables the construction of a new hi-tech distribution centre in Blackpool and allows the Council to explore town centre strategies further. | |
Date of Publication: | 10th March 2014 |
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