Transcript

and Councillor Weksham and their substitutes are Councillors and Jones, Councillor Deere, Cowan and Collins respectively. Thank you. Thank you very much. Do we have any decorations of interest? No decorations? Thank you very much. We're going to, obviously, follow through with a slight amendment to the actual schedule here. What we're going to do now is ask Alan Richards to bring the report and read the report, please, first. Alan? Chair, if it's helpful, no, Alan, it's just preparing himself for the presentation. So what I'm going to do is just give a brief outline of the report on why it's here and in the form it's in here today. So members will be aware of the report that was taken back in November, which it does allude to in the report that we've got here in front of us today, looking at potentially looking at a deal that could be done around faucets and the agreed parameters around that. So what we've actually got here in front of us now is a report where we're looking to agree in principle a deal one faucets subject to the remaining due diligence that's been ongoing. And that's following the agreed heads of terms back in late December, early January. So as I say, Chair, Alan's going to just do a report on what, because we know it's not the most easiest of subjects, and for those who are certainly around when the first and the deal that's currently in place at faucets, it's a complex matter. And I think we'll probably do our best to try and keep it so there's an understanding, not just from members here in the room, but also for those who are present in the public gallery and maybe watching online as well. Thank you. Yes, certainly. And before we go, there's certain matters, again, with the DCC, a lot of this stuff will have to come back to the DCC, so please, we're only here actually looking at the report and I think about the actual main development itself. Thank you. Alan. Thank you, Chair. Thank you, Leader. So I'll put together just a short number of slides for you just to help to set some of the context and the background to the paper, which hopefully will answer some of the questions that may arise during the course of the discussion today, but hopefully also be helpful to refresh members of where we are, how we got here, and what the next steps look like. So I'll run you through those. I'll try and do that quickly. It's online full of time. Firstly, and the Chair is alluded to this, really important today. The Council has a very separate role as local planning authorities, a statutory role, and this is not that today. As we progress, a new planning application will be required, and that will be considered on its merits by officers with recommendations to develop control committee who need to sit impartially to the rest of the Council, and it's also important to note that due to an area of land within Fosse, it's been Greenbelt, whatever the decision that's taken will also be referred to the Secretary of State as has been the case previously with planning applications at Fosse. So why are we here today then? There's a number of other roles for the Council, principally around enabling regeneration. This is about a contractual set of arrangements that we're considering entering into. It's about delivery of housing and a significant amount of inward investment into the City. So what is the development of Fosse's farm? It's been through many iterations over the years, so I thought it's helpful just to recap where we're landing at the moment. Importantly, I'll start at the back end of the slide first of all, there is now no stadium proposal at Fosse's farm. The intention of the consortium of buyers that are talking to the Football Club about the purchase are very clear that they intend to remain at Roots Hall, so we've had to reshape the transaction to reflect that commitment from the buyers of the club to stay at Roots Hall. And therefore, there are no links in this to Roots Hall where previously you'll recall there was a development across two sites. The only link remaining will be one that will be recorded both through the planning when that goes through its due course, but also through the transaction arrangements, which will make sure, as I'll come on to you later in the paper, that contributions come from the land and profit lines of the development of Fosse's to support the regeneration and reconstruction of the stadium at Roots Hall. The way we've settled then at Fosse's at the moment is a very much housing-led regeneration of a large area of land at Fosse's farm. There are three zones of housing within the proposal. I've got some plans to show you shortly on those. And the discussion today focuses around two of those zones, which the Council is talking about, transacting on a zone A, which would deliver up to 944 units, as primarily apartments with some immunity and other commercial space built into the ground floor areas to make sure that we have the right resident experience there. And zone C, which is the new zone, which replaced what was 502 apartments at Roots Hall, is now taking shape as 315, mainly houses to the north of where the apartments were planned. That's in zone C. All of the units that the Council, I should just say, the third, the prints, the other zone of development, I've mentioned it there in the bullet points, around 330 units of housing, which will be delivered without any connection to the Council, other than with our planning hat on, that's most likely to be for private sale, and that will be delivered separately. You'll see where those zones are and how they relate to each other on the next slide. Important to mention, all of the housing that the Council is transacting on will be exclusively built for built to rent, and the way that the transaction structure works requires it to be held for the whole of the lease period, because it needs to generate rental income for the Council to be able to pay the rent to the fund, which enables it to be funded and constructed in the first place. So that's a fundamental part of the transaction that this will be built to rent accommodation. So I talked to the previous slide about the zones, and very, very high-level zoning is there. A, that's where the apartment blocks will be. Zone C is where the family housing will be, and finally, zone B is the part that will be for private development, which is not the subject of our papers today. Just to give you a very high-level feel of density and what that might look like as a community in due course, you can see, I won't talk you through the way those various elements come together again, but the housing piece that's newer to you will be the bit where you've got faucets, farm and play lane identified up to the north of the site there. So why do we want to do this? So this is about creating a new high-quality rental community, really as a different offering for South End is something we haven't got at the moment, so it is different and new, and it's important that we structure it this way in order to make it work. The job creation is really important, primarily through construction now that we're not talking mainly about residential development, but there will be a number of jobs involved in the ongoing running management maintenance of this, and there are commercial and amenity elements to the development as well. Provider, we get this right. This will deliver a long-term income to the Council, and it also provides us with the opportunity to influence the quality of a local embedded rental market across the city, and the Council will also benefit, at the end of the lease term, from the full reversion and revalue of the development. So all of the freehold of the land and all the buildings sitting there on will pass to the Council at the end of the lease for a pound. I say to the Council, we'll actually put it into one of our Council companies, so it'll sit probably into South End. Housing Limited has options to acquire at the end of the leases. It's really important that we secure affordable housing for the city. That's been a very challenging discussion, particularly over the last week or two, where viability discussions have got quite crunchy, and at the moment you'll see that in the report we talk about hitting an affordable housing level reduced from the previous 30% down to 15% with a possibility to drop even lower if that's necessary in order to meet the other viability thresholds. It's important for me to point out, I know I've already drawn the distinction between our role as planning authority and local and in our other, with our other hats on, but whatever is settled in terms of principles for the land transaction, in terms of affordable housing, will also quite separately and independently have to clear all the relevant planning tests and viability tests and be signed off by the Secretary of State as a reasonable fair position to reach. So it's important that I set that in context as well. Whilst talking about viability, one of the other key factors is to meet, it's really important for the Council is to make sure that we reserve sufficient rental income for us to be able to deal properly and diligently with the ongoing long-term management and maintenance of the development. So you'll see a figure there, 27% to 29%, I'll talk a bit more about the detailed due diligence that we've been doing shortly, but that has been assessed by expert operators of specialist built to rent product in the market as being a reasonable and necessary level of rental commitment for us to set aside to make sure that we can deal with that management and ongoing maintenance properly. The housing would be available to anybody who wishes to take it, so that would be residents within the city or new residents coming to our city. It's really important that we get a catch-up with housing delivery. We are behind the curve on housing delivery woefully, and it's really important that we move the dial on that and start delivering some good quality housing. In terms of anticipated markets, this is really important because the design of the units as they stand at the moment and all of the work that we've done with, I mentioned our built to rent advisors, specialist built to rent advisors have identified that the likely market for this type of housing will be mixed, but a significant proportion of it is likely to be sharers. So for example, two young professional couples perhaps sharing a two-bedroom apartment, so we've made sure that the design discussions will reflect that, for example, with two double bedrooms, two bathrooms, so that the couples can cohabit with shared common space in there, and the attraction of this type of offering and where it sets itself apart from the rest of the market will be in the amenity value and the offerings that are available to residents in terms of concierge, residents gym, and other amenity space that will be around the estate to make it a really good, high quality place to live. Those qualities will also set the rent above the embedded market average levels, so what we're talking about here is rents is a quality of product that's different to what we have in the market at the moment, and a level of rent which is higher than that which the general market would support currently is important that Councillors are aware of that as we go into this. I'm happy to take any more questions on that, probably for a part two as we move forward with the discussion. We'll also include houses in the newer element that we've just picked up recently since the discussion's in November, there's 315 houses there to support a different type, a different part of the market as well, and as I'm sure you're all very familiar, the rental market is hugely pressured itself and very, very limited availability, so we think this is a different product, but we've tested very hard the market for this and we believe that that is there. Finally, it will be very important to any of our football fans watching, it's going to be really important that we secure and enable the payment to the consortium who are looking to acquire the Football Club to make sure that a payment is taken from the land and profit elements of the transaction that goes towards the refurbishment of Roots Hall to make sure that we protect the future of the Football Club and give it its best possible chance at great success into the future. Hopefully, you're all very familiar with this, I've mentioned it already, so I'm not going to dwell on it. Nothing in our transaction now relates to Roots Hall other than the security of money to pay into the Football Club. The training facilities have now been completed out of Fosst's farm and all of the development that we're talking about is at Fosst's. So what is the structure of the transaction? How does it work? Essentially, this is what's called income strip transactions, and it's all facilitated on private land, so the Council doesn't have land holdings up in this area that we're talking about now. The bill cost is financed from the strength of the Council's position, so because we're prepared as a tenant to take on long leases and pay rents, there's a significant degree of value and security in that payment, which is very attractive to the likes of pension funds and annuity funds, because it enables them to back off their risk to pay their people who draw in pensions from them and who would expect them to be, for example, CPI linked. So the income stream that would be derived from the asset here would match their liabilities, so it's very attractive to pension funds, especially given the strength of the Council's covenant strength. That's why it enables a very significant amount of capital to be generated off the back of that, such that we can bring forward a development like this and support it. It's not new. It's not new. There's quite a lot of examples of these now across the country. It's a model that has been used to deliver significant regeneration, particularly where there are unique viability issues or abnormal costs associated with it, because it does enable a higher amount of capital value to be derived than the traditional development model were built for sale. The Council would take the leases at the point when the blocks are practically completed. So if I take the example, say we take a phase of residential development, a block of flats is completed, and at the point where we sign that off, everybody has signed it off to say yes, that is completed and ready for occupation, the Council would draw down the lease for that block and would at that point become liable to pay the rent to the fund from that day for the next 55 years, subject to any very specific rent-free periods that have been agreed as part of that to help us with early years, let up voids and management type issues, voids and letting type issues. I've talked about the outgoing rent to the pension fund, and I'll talk more about the importance of that relationship later. The Council will receive all of the rent coming in from the tenant. So once we are the leaseholder of that block, we will be responsible for its letting maintenance management. We will receive the full gross rent, and from that rent we have to make allowance for all of our costs, and there will be a sum that will be paid to the fund in order to release the capital for the construction. And the other movement from where we were previously, we were talking about leases of up to 45 years due to changes in the wider economic climate and conditions, particularly around things like guilds and bond rates, 45 year lease is no longer enough to secure sufficient capital to be able to construct this, which is led to various levers being pulled around the development, one of which is the length of the lease, so the length of time for which the Council will need to pay that rent. Lots of detail there. You've got this in your reports, probably easier than I take questions on it as appropriate in part two, I'd like you just to focus for a minute on the right-hand side of the screen there. That most important relationship to focus on is the one between we've got pension insurance corporation, which is not 100% secured, but most likely to be the pension company that will take this. They're very interested in this transaction, and South End on CCT Council. So that is the long-term relationship. As each unit is completed, as each block or sectional phase of the development is completed, the Council will draw down a lease, and we will become a tenant of – as the diagram shows – pick, and we will then – that is the relationship then once that development is completed. There'll be all the usual warranties, guarantees around the build and the construction in terms of quality and long-term fees, but that's the most important relationship. Everything else between now and the completion of those buildings is around careful management of risk and programming to make sure that we get the right product and the right place and the right way. We're comfortable with it, and it delivers the right thing, the right outcomes for our residents. So, in that context, we've had to take – the approach that we've taken to making sure that our due diligence around the various companies involved, the most important bit there is that fourth bullet point, probably, sorry, not the fourth one, the fifth bullet point we've got there, to make it – so various companies will play different roles in this development at different points, and it's really important that we have protections and mitigations in place to make sure that we are comfortable, that wherever the company is that we're contracting with is sufficiently robust and has the right – everything in place to be able to give us the confidence they can meet their contractual requirements through those development processes, so that's what we've done. Just a worth a note, because I'm sure people will go off and look up a number of those companies themselves on development companies generally. If you think about the way in which development works, a development company will very often be set up as a single-purpose vehicle or a specific company to deliver a development, and more often than not, that will therefore mean that they are funded to go and acquire land, secure planning, and all the other consents that they need to build and then to build. At that point in time, that company is going to be significantly underwater, having outlaid an extraordinary amount of cost, and it'll only be later in the process when the proceeds of that development start coming in that one would hope that a company would then get above water and become a profitable entity. So it's just worth bearing that in mind as we move forward with this. I've talked a bit about the income ship illustration, and the bit I'd like you to focus on on this diagram is the red section, and I always think of Egypt in the years of famine and years of plenty. So if we get this structured correctly, there will be years of plenty in early years where we will see, hopefully, a significant profit rent. As time goes on, the risk increases that as the asset ages and gets older and as the rental market perhaps doesn't quite keep check, there is a risk that our rental outgoings could exceed our rental incomeings, therefore creating a deficit position. So it would be really important to the council that we're really carefully sighted on this. We're saving for those rainy days. We're making sure that in those years of plenty in early years, we're putting money aside, making sure we're building a sinking fund for long-term repairs, maintenance, but also to deal with this deficit period. Having regard to the fact that at the end of the least term, the full value of the asset passes with the freehold of the land to the council at the end, so ultimately, the vast majority of that cost should be paid for through incoming rents, but it's really important that we put money aside for a rainy day and make sure that we are prudent with that. And that's a very significant part of the financial due diligence work that is currently underway. A very high level. I've sanitised this, so it's really for part one to be shared publicly, but that pie chart on the right there, if you think the whole is all of the rent that's coming into the council, the orange section is illustrative of the rent that we will need to pay away to the fund in order to raise the capital to construct. The dark blue section, this is where my wife would tell me I've got my colours all wrong, to the top right hand corner of the pie chart, illustrates the operational expenditure that we are allowing for, so 27% of the gross rent will be set aside and allowed for us to make sure that we maintain and manage these really high quality products to make sure that it stays that way, and we deliver the level of rents that we need in order to make the whole transaction work. And the final two slices there, the light blue and the green, the green is money we will need to set aside out of our, the light blue and the green together are effectively our profit rent, but we need to deal with those carefully, as I've just described at length, and I've illustrated there 3% of that being set aside to deal with major repair issues over the long term of the development, for example, lift replacements, roof repairs, new windows, bits and pieces that will inevitably become due as we move through the term of the lease. So, where are we with the due diligence, you'll have heard a lot about this, and I've tried to take my time to describe in the report to you what we're doing around those various elements of due diligence, so they're there, they're working our way through it, we're well advanced with the market due diligence with Cortland, very, very close to the built to rent market and really understanding what the product is, what it needs to be, making sure that the rents and operational costs are in the right places, all of that, along with the housing mix, blend, affordable numbers, feed into the financial modelling, which 31.10 are now starting on for us, they've not quite got everything they need for that, but that work is underway, legal due diligence carries on throughout, and that will apply both to the companies that we're contracting with, but also to the structure and the way the deal is structured and laid out and set out for us. And finally, once we've got through all of that, I mean, the legal work will flow right through way beyond exchange and into development as well. The external audit piece is there, it's really important, we will have to summarise all of that information for our external auditors, who must also be happy that this transaction as put together is in the council's long-term financial interest, is absolutely affordable and is the right thing for the council to be doing, so with all of our, we've deliberately procured a set of due diligence advisors who will not tell us what we want to hear, if it's not what they genuinely believe, so they're challenging, they're very challenging and they're kicking the tires of this all the way through to make sure that this is the right thing for us to do. And if at any point red flags go up, when we are, when it comes to our attention that something needs to change or needs to be done differently, as has been the case through the work already, we will absolutely raise that and make sure that's corrected, so hopefully there's some assurance there in terms of the quality of the advisors that we put around us to make sure we get to the right place. Ultimately then, the report sets out the principle of proceeding and delegates authority to myself, along with section 151 officer in consultation with the leader and the relevant portfolio holder at the time, I've taken care with the relevant portfolio holder because currently it probably would cross over between planning and housing, so we just need to make sure that we're able to provide some fluidity around that to make sure it's correct at the right time. And I've talked already about the importance of planning, development control, the independence of development control committee and the need to refer the matters to the sexual state. As with any significant transaction or any transaction at all, pretty much there will be conditionality. The list I've set out there is by no means all of it, but these are the key things that we will need to make sure are cleared pre-exchange of contracts, and then once we have exchanged contracts, there are a whole load of other conditions that will need to be met before the council is then obliged to take draw down these leases and we're into the long-term position. So I don't intend to go into these in great detail, the two old pluck out there for the benefit of any fans watching. In particular is the link to the sale of the club, to the consortium and the security of the £20 million to the companies who will own football club to make sure that that money goes into the reconstruction and redevelopment of retail, as I have described. CBRE and Merseyside Pension Fund are really important on that list as well. They are the interim funders effectively. They have bankrolled everything to date to do with Thames Plaza and Fosse's farm at this development, and they also have charges across all of the key land interests. So without the consents that we need, the widest sense that the we, all involved in the transaction, need consents from CBRE and Merseyside Pension Fund in order to be able for this to proceed. So we've got a lot of other people around us whose interests are reasonably well aligned to ours, not identical to ours, but reasonably well aligned to ours in the shape of CBRE, Merseyside, PIC and as well, making sure that this transaction in the round works for everybody involved in it. I'm not going to pluck out any other key bits from there. There we go, that was it for me. Hopefully that's helpful. Sets the scene a little bit and hopefully answers some of the questions you might have been mulling over. Thank you. Thank you very much, Aaron. Before we go on to obviously for questions from the committee, let's continue. Okay, we've got any questions from the member of the public today. No questions, okay. Questions from Cancer Day? We've got one of them, Steve and Aylin. Under the rules, Steve and you have five minutes. Thank you. Members of the committee, chairman, officers, and members of the public, thank you for allowing me to speak on this vital item being discussed today. I'm aware that most of you sitting around here this afternoon at such an important time in our council's history, believe that I'd sought rubbish and will not listen. That is your choice, but I remind you, you have a responsibility and a responsibility to affect South End for years to come. Let it be pointed out the seriousness of giving away a section of Jones Memorial Ground and Victory Sports Ground to allow access to the stadium that was built. This was ignored. Now there is no stadium being built. Any agreements today must include the return of parts of Jones Memorial Ground and Victory Sports Ground given to the development of the stadium. I repeat, must include the return of the land of the Jones Memorial Ground and Victoria Sports Ground given to the development of the stadium. Failure to return the land of Jones Memorial Ground and Victory Sports Ground back to South End City will have huge consequences for South End and all its residents, a massive impact on 71 parts of South End. No longer will a hammer of woodpeckers, the shouts of four and the class of horses be heard in Belfer's Park, the sound of leather on Willow in South Church Park. The children playing on a warm Sunday afternoon in Eastwood Park, just a few examples of what will be lost to housing, extra vehicles on our road and the pollution. Mr. R.A. Jones, a benefactor of 100 years ago to our town, was a very smart and clever man, who was upstaged by a council of Britain, chair of the Parks and Open Spaces Committee. It was Councillor Britton who was responsible in showing South End Parks exist and still there today. So, Mr. R.A. Jones left time bombs in the covenants of the then-new parks to protect his park or quarry park, the Memorial Ground as well as Victory Sports Ground. If you do not include return the land of Victory Sports Ground and Jones Memorial Ground back to South End City, the time bombs will start ticking. You have a responsibility and I'm confident you will step up to the mark. Thank you. Thank you very much, Stephen Hayley. Before we come again to the question to the committee, we're reminding that we're under a tight time schedule this evening, because obviously we got the audit committee around about the 630th Seaman, so we want to try and actually get everything said and done by quarter-power six, so we've got part one and part two, so please refrain to asking any detailed questions regarding to finance and if you want to do that, that must come in part two. So, first of all, here we go, questions from Councillors. Thank you, Chair. Thank you for the presentation, Mr. Richards, very clear and very purposeful. The costs of the due diligence, please. Who's paying for that and have we got some maturity over that, please? Councillor TUNNICOCKS. Yes, Chair, I could give some maturity over that. That's actually been paid for by the Martins themselves, so it's not come at any cost to the Council. Your second question? Thank you, if I may, on that point, on similar point, 9.6 in the report talking about ongoing costs regarding securities, when we progress to the final stage of actually taking on these leases, there's talks about costs here being involved to the Council regarding external advice around these securities on the ongoing basis. Is that factored into the expenditure on the graph you showed us, Mr. Richards? Is that money being taken to account? Councillor TUNNICOCKS. It isn't, it isn't, if that makes sense. And I think you probably could, though, wear a caveat that we still need to keep it remaining under review because it's still part of the pre-agreement, but yes, some of it will still be, but we see it's factored into the longer term costs as well. And your third question? Thank you. Your second question is also aligned, but it's a little difficult. I just want to make sure that we get our processes in place, Chair, so the question is regarding external audit that there's a concern because I see that we are planning in the paper to tell them all the due diligence results at the end, and we're not planning to inform them as we go through because obviously that's going to add possibly a delay factor to this whole process. Councillor TUNNICOCKS. Yes, it might not add any delay because a lot of this is still being worked in in tandem where it can because we know the urgency around it and also with the winding up of the petition as well. So we do need to be mindful of that. So where things can be done in parallel with in tandem to save time and also to save costs as well that's being done. So they are being kept depressed, but it's like anything and I think to be fair, Paul, you know, for your background, there's work that you can do up to a point where you still got to have to wait to, to the end part to then review the remaining parts of it. So hopefully that gives you the reassurance that that's not just external audit, but that's all parts of due diligence. So you'll see there from the report we've got one part going through there is other partners and some of that work has already started working in tandem and parallel just this week as well. Councillor interjecting. Your first question. Thank you, Chair. Can I have some clarification first, please? It sounds like I'm asking a question, but we're at pre-cabinet scrutiny. So the role of members here today may be to make some recommendations or accept. Okay. So we've just had somebody that's sort of made a recommendation to us. So I hope that that will be noted. Right. My question is, if you're referring to Councillor ALLAN's comment, he's not a member of the committee, so that won't form a recommendation and that's you, so choose. Councillor JOHNSTON, if it helps with it, with this, when it comes to Jones Memorial Ground, the land that was going to be used for that, needed to be used for that, was for the stadium. The stadium is not going to be there, so there is no need to use for that land. I'm quite happy to incorporate that in. With Victory Park, there was planning permissions already being given because we may need to improve some of the road infrastructure and access points. And that's why I say, am I, it might not be needed, but it may well be needed, but as planning permission to be given, that's why I can't put that element into the report, but I can give you the surety regarding Jones Memorial Ground in relation to that won't be needed as part of that development. Sorry, Councillor and John, you may continue. Thank you, Chair. So my question is perhaps not so much about the due diligence and the finances, because other members of the committee and audit committee have, I'm a sub here today, so what jumped out to me was about carbon impact and 16.1. There's a, I'm sorry for long pream, well there is a material change in the environment that we are going to experience should this all be agreed, there was going to be a large open space. So therefore, I would ask that we have regard within other policies and other offsets attached to this and having regard to this, that that is seriously considered, because it says we are not going to be able to do a lot of this, and that is a lot of what we are going to consult on, and there are costs involved in not meeting those targets, not just financial costs, but those in terms of the health of the city. So my question is, can we be assured that everything will be done to address the impact, the carbon impact that this will now bring, because it's materially different to think to terms and head to terms that we've agreed around that. Councillor CUNNINGHAM. Councillor CUNNINGHAM. Thank you, Chair. I'm grateful the question has actually come up, because that's one element where it will become as part of the planning. So to actually satisfy those needs and the policy requirements as well, as well as the national obligations that there are around that, will still have to be factored in. But what we should be mindful of here is that the numbers have changed, the premise and how it hasn't deviated around from that original deal that's still there. So a lot of those concerns will be picked up as part of the planning process, so I just wanted to give you the reassurance that that's not being abandoned. It will still have to be factored in as part of that. It's just looking at the different element of the Council and the process that has to go through to be looked at. So hopefully that gives you the reassurance. It's not being abandoned, but here today it's looking dominantly around the land transaction. So those other parts will be picked up as part of the planning process. Councillor interjecting. Councillor interjecting. Thank you. Second question. Again, there are references towards the end of the paper to things that we have to be regarding. I would just like to pick up that we have a local plan going on, and this will contribute significantly to a good outcome in the local plan. But we should be mindful of how, of the process of the timing of the local plan, it's very difficult to put time limits on this, as we've said. Col told haven't got everything they need. So I think that we need some regulation around timelines, we're going to have a lot of new Councillors soon. You know, lots of our very experienced colleagues have retired, and we're going to be having to give this to them. So just some real clear indications that for the local plan that this will fit the current local plan and any new local plan, because this actually could really flagship our local plan if it has to go to the Secretary of State. And I know I'm speaking on that, it's not planning, but that's why we have other cabinet members here. I'm very mindful of us being at the end of a municipal year and the material changes around that. And I won't make any comments, I promise. Thank you very much. Do you want to come back on that, Tony? Yeah, if I could give some reassurance, in terms of compatibility with the current local plan there are in the development of the new local plan, it's compatible with both, because the principal around it and building and in around that site has already been established, so that's already part of the current local plan and it will be factored into the new local plan as well. So hopefully that should give the reassurance that it's compatible on both. Councillor interjecting. Thank you, Chair. Just looking to ask a question around the projects or blocks whenever we actually take them over. Are we going to look at our current stock that is overpopulated and actually look to re-high some of the residents to make it more balanced, would that be a possibility? Councillor interjecting. I think it's fair to say, at this stage here, one thing we can say with some maturity is that there will be more affordable homes into the mix that we can use to house people than what they currently are, who gets access to those, who doesn't, I think it depends on a number of different factors, but I think it's safe to say that there will be more housing stock available for people who desperately need that housing than what the current is today. Now, the second question. Yeah, last question, Chair. Just come back around the land held in trust for Jones Memorial. I know there's a slither that's going to be used for the road. Can we get some guarantees or to make sure that no more land within that is actually used in the future that's actually kept for the community? Councillor Nggal. Yeah, Chair. I think I partially touched upon it in my last answer in relation. So the land at Jones Memorial ground will not be needed. The one that's already there's got planning permission. There is not envisaged any more will be needed if there's not. What we're saying is if it needs to be used that's already been granted planning permission, it needs to be used if it don't then releases back, but what we're not going to do, you start building or walk through Jones Memorial Park to a stadium that's not going to exist. So that's the reason why we can say with certainty that that one form part is alluded to in the report if you actually look at the recommendations, but I'm happy to take that way and make it crystal clear if it isn't already there that certainly that with Jones Memorial ground. Any more questions? Just one more random one for each, sorry, we would have been possible then to do a proposal to actually make sure that Jones Memorial ground is protected in the future that it won't be built on. Councillor Nggal. The trust already provides for that. So what we're saying is here is the Council of Public Affairs Trust. What I'm saying is I can be crystal clear here is that nothing I love that will be used for this development. So as it stays, there is no need for it and it stays as it is. So I hope that that gives the reassurance, but before it was needed to allow for access to going into the stadium, it's not needed, it's not needed, it doesn't get built on. But I think Alan wants to just come in on an extra point on that. Thank you through you, Chair. I was just going to add to that the trust land is protected not only through the trust documents that exist, but also very importantly by the Charity Commission which is established to protect the objects of trusts and the land that's held in trusts. So if there were any proposal to change, as has been the case before, not only would Councillors sitting as trustees rather than Councillors need to take a clear decision on anything to do with that, we would then have to take that as officers, we would have to take that up with the Charity Commission and seek the consent of the Charity Commission who will always only act in the best interest of the trust. So there's additional level of assurance and protection there. Thank you. Councillor, Daniel Cowan. Thank you, Chair. It's around the affordable housing element, I note in the report that it's dropped from Council's minimum requirement of 30% down to 15, possibly as I was 13%. I'm sure that will all come out in the washers part of the discussions that we'll have later. But my question is, where do we expect or have we determined where those houses would be, whether it's all zone A or a mix between A and C? Councillor Tanya-Hops. Yeah, I could give the guarantee that it's a mix of all ranges, all types, all units across the zones A and C that we have the income strip lease for. So it's been clear that it's not just in one area, not just one type, it's actually a mixture across all of the housing styles, but across those two zones. And your second question? Thank you, Chair. So is that 15% going to be across the total number or the number of each individual zone? Councillor Tanya-Hops. It's total proportion up to the total of it. Approximately, off hand here, you're looking, you're in the region of around 130 homes. And your third question? No third question, Chair. They're all finance related, so I'll wait for part two. Thank you very much. Councillor Maxine-Hops. If we do go on and just want to clarify, we're saying approximately about 130 homes we can actually now relate down, it's between 160 and 180. Thank you. Councillor Maxine-Sant, say your first question, please. Thank you, Chair. And which is for the report. What concerns me is the reduction in affordable housing and following on from my colleague, from our group leaders' questions. What guarantee do we have that will remain at 13 to 15% that they might turn around and say that we can't have any affordable homes? Do we have a guarantee for that? Councillor Tanya-Hops. In terms of the figure that's there between that figure, that's what we'll be contractually written into. But as I say, in terms of the reduction from 30 to 15, 13, 15%, that would have to be as I think, as Alan had already said in the presentation, would have to be demonstrated apart the viability test when it comes to planning. But I think it's key to mention that this is all done around viability and risk to the Council as well here because of a number of different factors. That's why you've seen housing as part of the mix here as well. Because in terms of construction, housing is cheaper to construct than what blocks of flats are because of all the other amenities, space, lift, etc. you've got to put in. So when we're looking at construction, that's why we've seen a dearth of it across the country because of build costs, materials, labour and everything just associated with development. So in terms of that and the affordability, the affordability of the scheme and to do what it needs to do as well, that's why those figures have been derived at. But I can guarantee that in terms of the agreement that be signed, there will be nothing less than what's already in that report. So what's in the report will form contractually that part. Councillor interjecting. Any other second question? Councillor interjecting. Thank you, Leader. The second question is about the construction. Would we be using local builders and thereby keeping money within cell phones that jobs will be created for people living in cell phones and also be working in cell phones? Councillor interjecting. As we're not the constructor, we can't necessarily make that stipulation, but what we can do is talk around that with the developer to see how far local constructors can play a part in this, as well as local jobs and local schools. I'm sure there's going to be an element of that, but we don't have no contractual obligations over the developer in how they do it, but as I say, I'm sure, again, these questions have regularly come up as part of planning, but we can feed that back into some of the discussions that we've already had. Any other questions? I have no third question, but just to ask if that, as the Leader has said, if that can be part of the discussion in the future, thank you. Councillor Tricia Cowser, your first question, please. Thank you, Chair. The report on the presentation, what's our potential rates, sorry, at 20 percent higher than the market, and suggest a sharing model with two couples sharing, so where we have young couples who live with their families currently, I fail to see the advantage of moving to share with strangers, so I wanted to ask, how do we manage this, or who would manage it, how would we market it, what security would there be for tenants who opted for this model? Councillor Tony Gox. So, as part of the work that we've done as part of due diligence, and the company we've got have provided a lot of professional advice on the mixes, the units, and where there would be a market for types of properties. Now, to be clear, that's not all the properties will be like how you describe, but there would be an element of that, because that's what's come from the advisors, and in terms, again, moving forward, I think Alan made reference to it, that we would need to make sure that we have the appropriate people with the appropriate skills, managing that housing stock to get the rent in terms of the marketing, and at least it's some of that in terms of the rent timings, you would see it's in part of the confidential report, we can touch upon that if we need to in part two, but it's just to give you that reassurance that all this has been taken with the best possible advice is not something that we stipulated, it's about looking at what's the need, and will it be able to yield what everybody needs to get out of this? Councillor interjecting. Any second question? Councillor interjecting. Thank you, Gensha. Councillor interjecting. It's really related to planning which I know this isn't appropriate for this meeting, but it's something to take forward, I hope, so the original, the attractive offer previously was that every unit would be accessible and adaptable, and I just wondered if there was still a likelihood of that going forward. Councillor Tony Coxe. I think Tricia, you're right, a lot that will come out from planning, but what I think is worth noting, if that's already what's come out from the previous application, I would then say that's down to developer control to make sure that those sorts of things are fed into the mix and make sure that we still get that accessibility level as well out from it. Any third question? It's really just to build on from that, and I know the answer would be similar in that I noticed there's an increase in studio apartments in terms of this development, and we do have a particularly strong policy about percentage of single-person dwellings, and I just hope that we will take that into account in the future, can I get that reassurance? Councillor interjecting. Yeah, again, Chair, I'm quite happy to say that the levels and the numbers and the units were all based on the advice of the dialogue that's been happening with our advisors as well, and there were some interesting discussions in some of the unit mixes that, while people may want that type of unit mix as an apartment, when it could be provided from a house within that. So there's all those parts of discussions that are fed into the mix to actually come out with the percentage and proportions that we've got in unit sizes and styles. Councillor MACKERBOOM, your first question, please. Thank you. And 9.4, it talks about the relationship between the Council and the funds. Now, at the very bottom, it says, therefore, it is the funds who principally, who are principally at risk while their development is underway, and we will have security and stepping rights to protect its position. What is meant by step-in rights, and also the Council will be at risk when the properties are handed over. So what step-in rights do we have to protect our position then? Councillor TONICAL. For the technical term, I will pop. For the technical term and the technical, what stepping means, I'll pass over to Alan. But principally, what this means is, is the developer has all the risk. We will only take it on, except it, when it's built to a level of satisfaction that we're comfortable with. So that's where our protection staff, we were saying, look, we expect these to be, we've built a design at a certain level and a construction before we take them on. In terms of stepping rights, I'll pass over to Alan, who will be able to give a more eloquent answer than I'm able to give on that one. Thank you, Leader. Well, I could try anyway. Step-in rights, essentially, are a protection measure for the fund or for a bank or anybody who's dealing with major construction. It's to cover the eventuality that, for example, the main contractor goes bust and that measures need to be put in place to put an alternative contractor in. The fund would reserve the rights to be able to step in, make those arrangements, put an alternative contractor in to make sure the development is completed. In simple terms, that's essentially how stepping rights would work. And your second question. Thank you. Turning to the question of our old friend, viability, those of us who are on development control know that term quite a lot. That concerns me because are we guaranteed then, if they decide that the scheme is not viable with any affordable housing, are we guaranteed that there will be affordable housing on it? And not that they say, no, we can't put it there. We have to have it off site, which happens a lot on development control. So I just want to be guaranteed that, you know, our old friend, viability, won't give its ugly head and they'll decide that they can't put any affordable housing on this development because of viability. Councillor Toney-Cocks. I could give the assurance if there was no element of affordability in there, there would be no deal. So the fact that I think I've mentioned it in a previous answer, what contractually we will be going through will be that 13, 15%. Where the development control comes into is whether the viability test is there to say that that's what could be provided and not more because obviously with the 30, the 30% affordability that we have within the scheme. So that's where the viability test will have to be demonstrated in the development control but could contractually be provided on that site and not elsewhere. Any more questions? Councillor Robert Mamala. Thank you, Chair. First question might be for Mr Richard or the Leader. Regarding the various consultances that we've engaged with 31, 10, Courtlands, et cetera, can you just clarify that they were our appointments and that they are not working for any other partners within the development? Councillor Toney-Cocks. Confirmed. They work for us. They provide our reports. They provide the due diligence to us but they are funded and the scheduled works I can confirm was agreed in terms of the funding as was mentioned earlier and it was agreed that these people will be provided with the reports and they are our reports and our advice given to us but not working for anyone else. Any second question? Thank you, Chair. Regarding Courtland, who are the advisors for the high-end apartments, are we able to have sight of that report where they have recommended that this high-end apartment plan will work and also if we end up in a void position where the high-end apartments are not fully let, would it give the Council effectively a negative rental scenario whereby we're paying rent for apartments that we can't find tenants for? Councillor Toney-Cocks. I think there's two parts to that question but taking the second part, there's always potentially that risk but that's why it's about minimising the risk and exposure there are to the Council hence the reason that's why the mixes are put forward here today. In terms of actually seeing the full report, I have no problem, obviously we can't publish them here today because all the due diligence reports have been completed but I am happy once they've all been completed and if and when then signed off they are available that members can see. I have no problem with that. But it's impossible to bring them all here today because of the nature of how the report is but in terms of members having access to that, once they've already signed off I have no problem with members being able to see the conversation. Any other questions? My third one is about the 20 million that's due to be released to South End United if that needs to be covered in part two. Okay, fine. At what point will that money be made available and will it be released to the new football club owners in one clip or in several tranches and over what period? Over to you, Tony. Now that part is in part two. The general principal on the 20 million I can talk about but the mechanisms, how we do it, it would have to be part two. I'm afraid. Councillor Chris Walker. Thank you, Chair. Can I ask, can we have the first slide up again on the screen? I know we've asked about victory sports ground innumerable times but there's a slice on there which is highlighted and I would like reassurance. Victory Jones to me they're all the same. I don't play football. Whilst we're trying to do that, Chris, do you have a second question? Thank you for your question, Councillor Walker. Very good eyesight, well spotted and that is an error in the plan there which still shows the land identified but it was for supporters why which we've talked about at length during the meeting so well spotted. That isn't on later versions of the plan but this is all evolving quite quickly so we pick these little bits up as we move through. That was purely for illustrative purposes but you've got a good spot, well done. Any other questions on Councillors? Councillor Paul Klyans? Thank you, Chair. A couple of pieces. One is quite straightforward and just procedural. 6.1 in the report, Chair. It says that the current date is the 10th of November 23th. I think that cabinet date was 20, sorry. I think that's a mistake. I think that date should be something like 9th of November 23 in 6.1. Okay, thank you. That was a question. Thank you. I think the bit I think is missing in here, Chair, and I want to ask about is the protection for roots or roots always mentioned here several times in the paper quite rightly because it's now being removed from the overall future planning for this process but are we and should we put in this paper that we understand and agree that the protection for roots or root under covenants still exists now and will be protected? Councillors interjecting. Chair, I do believe it is in there because it's talking about the land charges that CBRE have over roots haul and if those land charges are not removed, as part of the degree we deal with them, then this still doesn't proceed. So that actually gives security in terms of roots haul. I'm quite happy, Paul, if you think there is some additional wording that may need to go into to strengthen that, I'm more than happy to incorporate that but this was one of the key conditions. What you don't want is a position where there's land charges still over roots haul. The club don't own it which was all part of what we want to do to give the security of the club so the club has an asset moving forward which will be a ground which we know they don't currently have at the moment. So that was tried to be captured there but as I say, if there is some additional form of wording that needs to be added, we'll quite look at it. You can come back. Yeah, I think you're right. Lee, the absolute, the Thomas conversation about the charge on there but I just think it's like a double negative. I just think the clarity for the paper and the future, if it's said that in much clearer terms that this therefore means that the covenant will now be in existence and the ground is protected. And this is the only concert when we come back. Chair, in terms of covenant, I'm not hundred, because there's a land charge, there's not necessary covenant as far as I'm aware. Hang on, excuse me. So, can I support coins and come back up on that, please? Just to say they are different things, yes, you're right, absolutely. That's what I'm trying to get through, that we understand and we make it very clear to the people of South End that we understand exactly what the situation is when this, if we agree this procedure, the cabinet agrees this, when it takes this paper, it understands very much what that means. Councillor interjecting in it, I think 4.2 covers it, probably not covers it, I think what is the explicit language that Paul wants, but we can tighten that up, the wording and take a, I'm sure when the paper goes to cabinet that it will make crystal clear once the land charge is, we expect routes or to remain the property of the football club moving forward. Quite happy to put some words to that effect to show that up, but I think 4.2 was trying to say that, but happy to look at that. Thank you, Councillor, Daniel Cowen, please. Thank you, Chair. You might have to tell me if this is part 2, it's a question regarding the rental yields and our break even point, would that be appropriate now or part 2? The second question on the more. Any more questions from Councillors? We quick glance for comments, okay, and then Tony can sum up for the public before we go into part 2, so any comments from Councillors? Councillor Tricia Cowen. Thank you, Chair. Just wanted to say it's essential that we give consideration to our current residents and their needs and not price them out of this development, so we have high numbers of residents requiring social housing and we see the numbers already reduced and the potential to reduce further. We also need to make sure that any potential tenants are protected and the risks attached with shared occupancy and other models are highlighted and mitigated, sorry. We need to ensure that all properties are adaptable and accessible and we must acknowledge that we are at risk of reaching our own planning policies in terms of housing mix and must make sure that this is reviewed as a matter of urgency. Thank you, Chair. Councillor DAN you can comment, please. Thank you, Chair. There's a lot of questions that I want to ask, which are related to finance which we'll have to go into part 2 for and I think it's a shame that a lot of those questions for very good reason won't be able to be discussed in public because I know this is something that the residents and the fans of the Football Club are really, really keen to move forward on and see us make a bit of a difference here and hopefully help move the sale of the club forward. And it's on that that I just want to say that I think that all of us want to save the club. We want to do everything we can to save the club and we will and I think ultimately what's going to happen moving forward is that we will accept these papers as they are. I think cabinet will push them through largely as they are because the primary objective is getting us to a point where the consortium get their money and the club gets saved. But what I want to say, which won't come out until we go into part 2, is that we have to make 100% sure that we are not baking in huge financial risks to the council 5, 10, 15, 20 years down the line and I get that's where those red flags are. But I was under the impression that we would have got to that point by now, that we were going to be discussing the outcome of the due diligence and in effect we're not and I just want to say that's a bit disappointing. I recognise that everyone is working at pace and the officers working at pace and this is fast moving. But I think we need to improve our communications as a council to let residents know exactly and the fans of the football club exactly what's going on because they expected us to be discussing due diligence today as well. Thank you. Councillor JANNS. Thank you, Chair. I note that the map in the pack in part 1 is presented for information purposes around this development specifically or these developments. It talks about the phasing and how important that phasing is and my colleagues have brought up about viability etc. What's missing from this map is the fact that there is a very major development also with permission to go ahead there and I spoke about carbon impact etc and balancing that out. We've talked a lot about lorries in the last year and where they're going and what they're carrying and I think that actually we've got to start having some very, very open conversations with regard to that road network and infrastructure and the impact because of that. This brings me on to the viability again. There's going to be a great deal of competition for construction materials, constructors, times etc. At the same time should this phases be released. We could very quickly find ourselves in a situation where there is a tightness on building materials, utilities etc. Now I know that these will be dealt with as part of the planning but as a city we need to be very alert to the huge infrastructure in terms of utilities which are going to go in there. So my concern really is that we get the phasing right and we are talking to the right people. I know there are lots of conversations going on but coming back to residence we talk about the consultation in terms of things that have happened because these haven't happened. Residents feel that everything stops and starts again so we've got a real, real duty to residents who live there and future residents there. And I haven't even started on the transport links that we need for that many people to shift around a city of this size. Thank you. Thank you very much. Councilor Collins. Thank you Chair. Yes, I mean the tenant of this paper is what we need to be doing. I think the officers are working as hard and as diligent as they can. It was notable in 6.4 of the paper. It says here quite clearly the last sentence regarding the age and development. This was first presented for comments to the Council I assume on the 21st of March 2024 which is one month and three days ago. It's very difficult for us to work at pace with that sort of timing but we are. I know cabinet will go through this process and make it move forward. It is a huge impact on South End on sea in all sorts of aspects. As has been said the housing and the need for that and where it's placed and the development and the density of where it's placed. The football club is very important and this is part of the process that we're discussing and we need to get it all right. Now I think this paper certainly sets us on that journey. The due diligence will undoubtedly be very important and that's something we'll come back to I'm sure. We'll talk in part to you about the financial aspect of it which is going to be very important but as we have so far this is where we should be at the moment as best we can with the partners that we're dealing with. So I think this is something we need to be supportive of at this stage. Thank you very much. Any other comments? No comments? Would you like to sum up for the public please, Tony? Yeah, thank you Chair. I think Councillor Collins just mentioned the point here in terms of how quickly and what expectations are. Well one of the things I can give Councillor Councillor assurance of is that none of us have just sat on their back sides just waiting for things to happen. This has been done at express pace. Now as Councillor Collins mentioned things that have come forward as part of the due diligence has had discussions and further discussions and long discussions and also as well to be mindful the heads of terms for for a variety of different reasons and good reasons for that were only agreed in that last week leading into Christmas. So we then started the due the then started the work and we also have to have to mention here is when the schedule of works was signed off. That wasn't signed off by us. It was presented. It had to be signed off. That took us to the middle part of January. That's not about doing. So if you're taking that from the point to where we got at what we are talking about in this report is the due diligence because this is what's come out from the due diligence. Now in terms of levels of affordable housing I would like to have seen more but equally I can't put the counts at risk and if we wanted to do what this was all about and in fact essentially the brief that I was given was to make sure that we could do something that protected and save the club and doing it in a way that don't put the council at risk. Now in terms of that with some of the financials there is always an element at risk you are going to have but it's about minimising the risk where possible and we do have to be mindful. It is a very different financial climate than what it was when this original proposal and deal was put in place. Plus also as well the aspects of the due diligence whilst I can't go into the specifics but for those who have got the confidential appendix we'll see that some things have changed from that from where we are now but that has all come out from due diligence and the discussions that have happened after due diligence. In essence a report on where we are has been produced in what would have been if we were going on not based on about six months but we all know the urgency. This is why it's done being done at express pace but just to give the reassurance to those supporters is this is being done. Not just professionally but expediently and none of us are all sitting here on our back sides just waiting for things to happen. Thank you very much for the sum up. Okay before we go into obviously part two can we stop the podcast please?