Purpose

Acquisition of long leasehold interest

Decision

The Cabinet received a report regarding the Arriva Depot, Lincoln Road, Cressex Business Park. This depot was owned as a freehold asset by the Council and let out on a long-term lease of 125 years to a tenant, from 25th September 2005. The rent was a peppercorn, and the current book value was set out in the confidential appendices. Under the current lease terms, the Council had little control over the site and its value to the Council was minimal. The occupational tenant now wished to dispose of their interest through either an assignment of the lease to another party, or a disposal to the Council. The building was vacant although the tenant was visiting the site regularly to ensure occupation.

It was in the Council’s interests to take this opportunity to acquire the long leasehold to acquire control of the site. Acquisition would bring an important site on Cressex Business Park into occupational use and presented the Council with opportunities either by bringing it into use as part of the Council’s corporate estate, or disposal as an onward transaction, to generate or deliver savings, income or capital receipts.

The Cabinet report set out the background, financial case and rationale for the recommended decision.

RESOLVED:

1. 1.      That the acquisition of the long leasehold of the above property, in accordance with the Heads of Terms contained in the confidential appendices, be approved.
2. 2.      That authority be delegated to the Service Director of Special Projects in consultation with the Cabinet Member for Resources and S151 Officer to finalise terms, contract and due diligence, exchange and complete on the transaction.
3. 3.      That earmarked Reserves be used to fund (a) the acquisition of the long lease as an addition to the Capital Programme, and (b) any Revenue building costs up until the point of a future decision on the site, and/or a letting is achieved, to the values set out in the confidential appendix.
4. 4.      That authority be delegated to the Service Director of Special Projects and Service Director for Corporate Property and Assets (subject to the Property Procedural Rules) to let the property on short term lettings pending the outcome of the due diligence and legal work on options for disposal and operational use after consultation with the Cabinet Member for Resources and S151 Officer.