Issue - meetings

The Leader introduced a report seeking approval for the new Asset Management Strategy. 

The Asset Management Strategy had been in place since 2018, refreshed from the previous administration and items contained within the Strategy  had been delivered.  Taking it forward took into account all other works going on in the town centre and members were referred to paragraph 2.5.1 of the report which outlined the planned capital works and projects and 2.5.2 which outlined asset disposals.  Paragraph 2.5.3 outlined other projects at Chatterley Valley, Kidsgrove and the Circus Heritage Centre.

Councillor Fox-Hewitt asked for absolute clarity on the proposed terms for the Joint Venture Redevelopment in terms of the end purchasing agreement.  Councillor Fox-Hewitt’s understanding was that the costs would be redevelopment of the site or the value of the land at that time – whichever was the greater. Hypothetically, if York Place cost £900,000 to redevelop and it was valued at £1.5 million, the Council would receive £1.5 million but would that include the purchase of the site.  For example, if the purchase cost £1 million and £900,000 was spent redeveloping it, that would leave a shortfall of £400,000.  Therefore clarity was required that the purchase cost of the land and site was included in the package of payments.

The Leader believed that was the case and would bring in the Deputy Chief Executive.  With regard to the borrowing, all Council’s did this.  Newcastle had not borrowed significantly for a number of years because of the sale of the housing stock in the 1990’s.  From a financial point of view, that money would pay off the interest and loan.  The Deputy Chief Executive advised that the cost of creating the York Place asset would include land, construction cost, development fees, interest payments on the construction period etc so there would be a budget code and every cost put against that budget code would be the cost of creating the asset.  At the time of completion the Council would receive a valuation of that asset and that would include the land and the development – whichever was the greater would be the cost that the Council would receive.

Councillor Fox-Hewitt asked, in terms of the partnership and any of the developments in the town centre, would the procurement of materials and trades be sourced locally.  The Leader confirmed that would be the case.  Capital and Centric were also keen on sourcing locally.

Councillor Brockie stated that built into each stage of the journey with Capital and Centric was the provision that if things did not work out the Council was under no legal responsibility to continue with it.  Preliminary work would be undertaken by Capital and Centric at a cost of up to £256,500 to be available for scrutiny within six months.  Could the Committee be kept appraised of who would be responsible for carrying out regular risk assessments, how risks would be quantified and qualified and what would be in place to bring about the necessary interventions.

The Leader  ...  view the full minutes text for item 7

(i)            That the progress made to date with the procurement exercise for the Joint Venture Development Delivery Partner redevelopment plans for key town centre sites be noted;

(ii)          That the benefits of the Capital and Centric operating model as set out in Paragraph 2.14-2.21 of this report be noted;

(iii)         That the procurement through a direct award under the Pagabo Development Management Framework of Capital and Centric, be agreed,  to develop plans and development business cases for the York Place and Midway Car Park sites, at a cost not exceeding £256,500;

(iv)         That the Deputy Chief Executive, in consultation with the Portfolio Holder for Finance, Town Centres and Growth, and Portfolio Holder for One Council, People and Partnerships be authorised to progress discussions with third parties for the sale or lease of a portion of the York Place site;

(v)          That the Deputy Chief Executive, in consultation with the Portfolio Holder for Finance, Town Centres and Growth, and Portfolio for One Council, People and Partnerships be authorised to undertake the necessary preparatory work for the closure of the Midway Carpark in autumn 2024.

The Leader presented the report on the Procurement of a Joint Venture Development Partner and the appointment of Capital and Centric for York Place and Midway regeneration projects.

The Deputy Leader expressed his support for the proposal, outlining the benefits of the financial aspects. The Portfolio Holder for Strategic Planning and the Portfolio Holder for Leisure, Culture and Heritage also wished to endorse it.

Clarification was requested about which safeguards were in place to protect the Council’s financial reputation against the uncertainty of costs and benefits. – The Deputy Leader reiterated that Capital and Centric would be purchasing the asset thus removing the financial costs of the borrowing as well as risks related to under occupancy.

The Leader mentioned that a chain of pub had shown an interest in York Place. The Deputy Leader confirmed that a brewery wished to be involved in the centre, which was the potential for another project at a later stage.

Resolved:

(i)            That the progress made to date with the procurement exercise for the Joint Venture Development Delivery Partner redevelopment plans for key town centre sites be noted.

(ii)          That the benefits of the Capital and Centric operating model as set out in Paragraph 2.14-2.21 of this report be noted.

(iii)         That the procurement through a direct award under the Pagabo Development Management Framework of Capital and Centric, be agreed, to develop plans and development business cases for the York Place and Midway Car Park sites, at a cost not exceeding £256,500.

(iv)         That the Deputy Chief Executive, in consultation with the Portfolio Holder for Finance, Town Centres and Growth, and Portfolio Holder for One Council, People and Partnerships be authorised to progress discussions with third parties for the sale or lease of a portion of the York Place site.

(v)          That the Deputy Chief Executive, in consultation with the Portfolio Holder for Finance, Town Centres and Growth, and Portfolio for One Council, People and Partnerships be authorised to undertake the necessary preparatory work for the closure of the Midway Carpark in autumn 2024.

Watch the debate here