Councillor Pat Hackett introduced an updated report by the Director of Law and Governance following approval by the Cabinet at its meeting on 24 February 2020 of the Wirral Growth Company LLP Partnership Business Plan.  (Minute No. 94 refers.)  He informed that the Council’s plans for economic growth were about creating community wealth.  They were also about creating jobs and opportunities for local people, regenerating commercial areas and inspiring ambition.  Councillor Hackett was of the view that prosperous communities were happier, healthier, and better places in which to live. The proposals set out in the report detailed the next steps for taking forward the strategic regeneration objectives of the Wirral Growth Company for Central Birkenhead.

Councillor Hackett reported that Council officers had been working with the Wirral Growth Company LLP to finalise the location of the proposed new Birkenhead Commercial District. This development was  to be underpinned by the Council taking a lease of space anticipated to be approximately 150,000 sq. ft net for a period of approximately 40 years, with a maximum rent payment period of 35 years to enable funding for future re-developments by the Wirral Growth Company LLP.

Whilst the business case for this development was approved by Cabinet at its meeting of 24 February 2020 the report recommended to Members that there should be no significant delay in proceeding with the above lease arrangements, notwithstanding the economic effects of the Covid 19 pandemic.

The report sought authority for the Director of Law and Governance to negotiate and finalise the terms of the lease structure in consultation with the Director of Regeneration and Place and enter into a conditional agreement for the lease and such other documentation as may be reasonably necessary to progress the proposed lease structure. There were also consequential recommendations regarding the appointment of contractors and the amendment of the Milestones for entering into the agreement for lease.

This matter affected all wards within the borough and the decisions were Key Decisions.

In considering other options the Cabinet noted that to not enter into the agreement for lease the Council would be exposed to a claim that it had breached the partnership agreement and this would trigger a potential compensation payment to its Joint Venture Partner. This option was, therefore, not recommended.

Another option was to revisit the means of financing with a view to an outright purchase of the property.  This was not recommended as the merits of such an option had been fully considered by the Cabinet in the report of 24 February 2020. Whilst financing a purchase via the Public Works Loan Board had been considered, the Council would be directly funding the preparation and construction costs from day one, placing a liability on the Council. The annuity lease mechanism meant that the forward funder would be funding this. Also, the timing of payments with lower amounts under the annuity lease in the early and mid-term life of the asset meant that the annuity lease was predicted to result in lower cost on a net present value discounted cash flow basis.  The Cabinet agreed the recommendations in the report that an annuity lease option would be the better option. It was considered that there had been no significant changes in circumstances requiring the above appraisal to be re-considered.

The Cabinet noted that another option was to arrange for a funder to have the obligation to fit out the offices space.  However, whilst this was technically possible, it was considered that no funder would invest because of such an obligation.

Appended to the report were:

·  Appendix 1 – Wirral Growth Company Partnership Business Plan (Exempt - Minute No.117 refers.) 

·  Appendix 2 – Site Plan for the Birkenhead Commercial District Offices

·  Appendix 3 – Report on the proposed legal structure

·  Appendix 4 – Extracts from report on the proposed legal structure with sensitive information (Exempt Minute No. 117 also refers.)

Councillor Hackett thanked the Director of Regeneration and Place and his Team of officers for their hard work on this project.

Councillor Stuart Whittingham also thanked all the officers involved with this regeneration project, he commented on the fantastic plans the Council had for this area of Birkenhead and was pleased the Council’s current governance arrangements were ending on such a positive note.

Councillor Hackett referred to the Council’s Local Plan and informed that this regeneration area of the borough would help the Council meet its new housing targets and ensured that it did not have to build on green belt land.

Councillor Anita Leech welcomed the report and was pleased to see this regeneration work taking place in the borough.  She considered it to be a real kick-start to the numbers of houses in the Local Plan being built on brown field sites.

Councillor Janette Williamson also welcomed the report and regeneration on this scale, it fitted with the more locally focused community wealth building and she considered that it was absolutely vital as the borough came out of the Coronavirus Crisis that the Council built its community up.  She also thanked the Director of Regeneration and Place and his team of officers for their hard work.

RESOLVED:

That the following be approved:

(1)   the appointment of the following consultants on the design and delivery of the new offices, in accordance with the terms of the Wirral Growth Company Partnership Agreement:

(a)  Building Contractor- Morgan Sindell

(b)  Architect - AHR Architects Limited

(c)  Civil and Structural Engineer- Curtins Consulting Limited

(d)  Fire Engineer - Design Fire Consultants Limited

(e)  M&E Engineer, BREEAM and Acoustics- Hannan Associates Limited

(f)  Contract Administrator- Walker Sime Limited

(g)  Quantity Surveyor- Abacus Cost Management Limited

(h)  Health and Safety Auditor - Walker Sime Limited

(i)  Landscape Architect – Gillespies LLP

(j)  Ecology – United Environmental Services Limited

(k)  Highways - Vectos

(l)  Rights of light and Party Wall -GIA

(m)  Planning - Barton Willmore Planning Limited

(2)  the granting of authority to the Director of Law and Governance in consultation with the Director of Regeneration and Place to:

(a)  negotiate and agree and finalise the terms of a lease  of the land shown edged red on the plan attached at Appendix 2  to Wirral Growth Company LLP  or such funder as may be appointed by Wirral Growth Company LLP  together with a lease back to the Council of the land and/or the completed office development (of approximately 150,000 sq. ft)  within the  following parameters:

(i)  the land acquired or to be acquired at Milton Pavements shall be added to the Option Agreement with the Wirral Growth Company LLP on the basis that the Wirral Growth Company LLP may not acquire it at less than the amount the Council pays for it and on the basis of the existing option agreement conditions, with such specific changes as may be needed to accommodate the proposed structure of the annuity lease;

(ii)  the lease back to the Council from the Wirral Growth Company LLP or the funder  shall be at no more than the rent per square foot set out in the approved  Partnership Business Plan as set out in the exempt Appendix 1 to this report; and

(iii) the conditions that apply to the option agreement currently shall apply to the sale and leaseback arrangement so that the viability tests and planning tests and other tests that apply to the working arrangements of the Wirral Growth Company LLP apply to the annuity lease structure.

(2)  negotiate and agree and finalise amendment of the Milestones in the Partnership Agreement and the Partnership Business Plan to reflect the revised timescales for the entering into of the agreement for lease as follows:

  ‘agreement for lease to be entered into by 30 June 2020 albeit the parties have informally agreed an extension on that date to 31 August 2020.’