Purpose

The property was acquired 10th March 2006 by LCC in connection with the proposed Boston Southern Link Scheme (the Docks Relief Road) which is no longer proceeding, resulting in the site becoming surplus. LCC paid £380,000 for the site as a ‘going concern’ comprising a petrol filling station, convenience store, garages, workshops and a residential bungalow.

During the ensuing years the various uses closed and the premises were vacated, resulting in extensive vandalism and nuisance to neighbours and Boston Borough Council. The buildings were subsequently demolished and the site boundaries secured. The former underground petrol tanks remain in-situ and there is a high likelihood of contamination issues.
The decision to dispose of this asset is therefore driven by the absence of any operational or strategic requirement, combined with the significant liabilities and risks associated with continued ownership. The Council’s objective is to secure best value through appropriate marketing exposure rather than retaining a non-performing asset in anticipation of uncertain future uplift in value.
Appendix 1 plans show that the property is prominently positioned with frontage to London Road. The neighbour immediately to the south is a semi-detached residential house and surrounding the site to the rear is the large Calders and Grandidge Woodyard to which access is taken to the North.
The site affords potential for a variety of alternative uses and it is likely that interested parties will only acquire conditional on planning consent and contamination surveys. Our estimated range of value is between £100,000 and £200,000 – in large part due to the likely contamination issues.

The difference between the acquisition price of £380,000 vs our mid-range estimate of £150,000 today is due to the acquisition reflecting viable business uses that were then (in part) destroyed due to the threat of the road scheme. The situation today, in particular the uncertainty of contamination issues , has a huge detrimental impact on the open market value of the site. Dealing with the contamination directly is an option. However, the scale of such works cannot be fully appreciated until ground works begin; meaning that the cost could far exceed any potential value but this cannot be fully ascertained without expenditure and commitment. Any remediation of the site would likely follow the development footprint of a new building on site – as this is unknown it is not a recommended course of action ahead of marketing.

At present the Council continues to incur ongoing liabilities and risks associated with holding the site including:
- Recurring maintenance and vegetation management
- Ongoing security and enforcement risks associated with trespass, fly tipping and anti-social behaviour
- Officer time and resource managing a non-income producing asset
- Reputational impact arising from the site’s condition and
its proximity to neighbouring properties

Direct costs associated with holding the site are relatively modest in isolation. However, these do not reflect the full cost to the Council. In particular they exclude officer time, reactive management and risk related interventions which are not routinely captured but are nonetheless real and ongoing.

In considering options, the Council has assessed the relative position of holding vs disposal. Retention of the site would continue to expose the Council to ongoing cost and risk with no clear strategy for value enhancement. In contrast, disposal would:
- Remove ongoing revenue liabilities and management burden
- Transfer risk to a purchaser better placed to bring the site forward
- Enable the Council to realise a capital receipt reflecting current market conditions

On this basis disposal, in its current condition, represents the most economically rational option.
The disposal method proposed is staged to reflect the risk of potential negative interest.

Stage 1 will be marketing via agents to seek interest and offers.

Stage 2 will be to auction the premises should there be no
generated interest through agency marketing.

Additional points:
Whilst the relief road scheme is no longer proposed, officers will confirm with LCC Highways if any reservations should be made to the frontage for any future road widening.

The site has been identified as suitable for sale, which supports the Council’s property rationalisation objectives, delivers essential and planned financial savings, reducing liabilities and risk exposure.

Councillor Engagement
Councillors Daish, Gibson and Kelly have been consulted and commented with concerns regarding the acquisition cost vs potential value and the timing of marketing the premises at this point in the market cycle; questioning whether there is an advantage to holding the premises for longer to await a market upturn.

Officers have carefully considered these concerns and conclude that the reduction in value is not a function of short term market conditions but is primarily driven by site specific issues including contamination risk and planning uncertainty. As such holding the asset in anticipation of general market improvement is unlikely to materially improve value. The issue is that the cost of tackling both planning and contamination is uncertain at the outset and could materially exceed any likely uplift in value; exposing the Council to speculative development risk which it is neither resourced nor mandated to take.

Social Value
It is not yet known whether the sale will derive any specific social value, albeit sale is likely to lead to development which will reduce nuisance and improve the setting.
Restrictive Covenants
No legal search has been requested at this time but we are not aware of any conditions, covenants, rights of way, restrictions that would materially impact on LCC’s ability to sell the site. The sale will include a restriction against the use of the site for Housing in Multiple Occupation (HMO) and that this be protected by way of a deed of covenant procedure to bind any future purchasers.

Legal Issues
It is understood that the Council has good title to the site and as such is able to enter into a contract for sale.

Method of Disposal

Stage 1 will be private treaty via open marketing:
- Agents appointed to openly market
- As part of this process, officers and appointed agents will undertake proportionate market testing to establish whether there is any interest from adjoining owners that could give rise to enhanced value (e.g. through a wider site assembly or special purchaser interest)
- Interest gathered, parties given opportunity to consider planning and contamination and any other issues
- Bids received – likely to be subject to planning and survey

Should Stage 1 not deliver a satisfactory outcome, disposal via auction will be pursued.
It is expected that any up-front costs can be met from departmental budgets and the legal and agency fees covered from the sale proceeds.
Local Government Reorganisation
Consideration has been given to the potential LGR implications, and the professional view of Corporate Property is that this disposal will not have any impact on the LGR proposals as
neighbouring land is not in public ownership and the site only has potential with adjacent owners.

Decision

To dispose of this surplus site comprising some 0.258ha (0.638 acres) following receipt of agent’s marketing proposals.

Alternative options considered

1. Do nothing - this option has been considered and rejected. There is no operational requirement for the site and continued ownership will result in ongoing cost, deterioration and increased risk exposure without any clear strategy for value recovery.
2. Hold the site and consider it in connection with LCC’s Bio Diversity Net Gain Strategy (BNG) - this option has been considered but the site is not deemed to have any potential for this purpose.

3. Hold the site for future development in partnership with neighbouring land – this option has been considered. Whilst the site is surrounded by a mix of commercial and residential uses and could, in principle, form part of a wider assembly, this would be dependent on third party landowner engagement and alignment of objectives, introducing uncertainty in both deliverability and timescales.
Accordingly, a formal joint venture or assembly approach is not recommended at this stage. However, as part of the marketing process, proportionate testing of adjoining owner interest will be undertaken to identify any potential for enhanced value.

4. Clear the contamination and seek planning consent prior to
marketing – as set out above, this is not recommended due to the cost risks potentially exceeding any uplift in value and that such action would expose the Council to speculative development risks.