Issue - meetings
Creation of Property Development Fund
Meeting: 12/03/2015 - Cabinet (Item 155)
Councillor Phil Davies introduced a report by the Strategic Director - Regeneration and Environment which sought Members approval to create a Property Development Framework that would support the development of new commercial floor space within Wirral. The Framework would set out a number of alternative development models that could be used to address the economic viability of projects where the build costs were greater than the end value. This proposal would enable commercial projects to be delivered that met the objectives of the Council’s Investment Strategy.
The Strategic Director was in attendance at the meeting and briefly explained the technicalities associated with a Property Development Framework which would give the Council some different opportunities and options in future. His report outlined how it was proposed that the Council could do things differently. It was suggested that the Council took out head-leases, entering into agreements with developers. The proposal was that the Council would rent new buildings and then rent them on to others. The Strategic Director accepted that there were risks associated with this strategy but it was a way to get businesses to grow and relocate to Wirral. He also proposed to continue gap funding in some circumstances. Head-leases carried the biggest risk but this would be managed by using the reserve in the event that a business went “bust”. The Strategic Director informed that he would ensure that buildings being developed were re-letable.
Councillor Phil Davies reported that the big advantage of looking at the proposed mechanism was that it would enable the Council to retain in Wirral those companies who wanted to expand. He considered it sensible to use £700,000 in this way for this purpose
(1) the Cabinet agrees to establish a Property Development Framework based on the three delivery models set out in Section 2 of the report in order to support the delivery of the Council’s Investment Strategy;
(2) the Cabinet authorises Officers to identify sources of funding to support the implementation of the Property Development Framework – both external and internal resources;
(3) the Cabinet agrees that £700,000 from the Working Neighbourhood’s reserves be reclassified as Property Development Framework reserve to be used as a contingency budget for the use of the Head Lease delivery model;
(4) the Cabinet agrees that any surplus made by the Council from the rental charged through the Head Lease arrangement would be reinvested into the contingency reserve;
(5) each and every project considered under the Property Development Framework be brought forward to Cabinet for approval and be accompanied by a detailed report reflecting a full project appraisal and setting out how the specific matter complies with all financial and legal requirements; and
(6) an annual report on the performance of the Framework be presented to the Cabinet.