Purpose

The Council holds a 50% share in Medesham Homes LLP, the owning entity of Bretton Court. Cabinet approval is required to (i) surrender the leasehold interest in, and (ii) give approval to Medesham Homes for disposal of, the freehold of Bretton Court.

Decision

Cabinet RESOLVED to:

1. Approve the property and Lease 1 is declared surplus to requirements.
2. Approve the surrender of Lease 1, subject to the conditions set out below.
3. Approve the determination (by way of surrender or any other method) of Lease 2, subject to the conditions set out below.
4. Subject to final authority and determination by Medesham’s board, approve and ratify the Shareholder Cabinet Committee’s recommendation to Cabinet, in the Council’s capacity as designated member of Medesham Homes LLP, for Medesham to:

a. Dispose of the freehold interest in the property; and,

b. Agree to surrender or otherwise facilitate the determination of Leases 1 and 2

1. Delegates authority to the Executive Director for Place and Economy in consultation with the Executive Director of Corporate Services and Director of Legal and Governance to take all necessary steps to give effect to the recommendations, including agreeing final terms and entering into any necessary legal agreements.
2. Considers the proposed next steps in respect of the wider Medesham restructuring transaction, as set out in section 2.15. 

Alternative options considered

Lease 1: A surrender would allow the Council to receive a premium payment for ending the lease and allow the property to come forward for development with minimal restrictions. he alternative options were considered:

• Do nothing and allow Medesham to sell the building subject to Lease 1 – this was disregarded given the Property requires a full overhaul and retaining the lease, it would restrict the regeneration options to the developer i.e.. rules out demolition.

• Sell Lease 1 to the open market – this was disregarded given the building requires redevelopment and the Council are effectively receiving a receipt through surrender rather than sale.

Lease 2: The surrender by Medesham or otherwise determination of this lease would allow the freehold to be sold for development. The alternative option was considered:

• Do nothing – allow the lease to run and continue receiving income from Medesham, until Medesham initiates the surrender by serving the necessary legal notices. This was dis-regarded as we already know Medesham is seeking to sell the Property and want to surrender this lease to allow the Property to be sold. There is a short-term income benefit whilst the lease is in place however this would delay the redevelopment of the Property.