Content

13.1

The
Director of Regeneration and Development introduced the report
which provided committee members with an update on the financial
position of the Heart of the City II project, including the impact
of current lettings.
 
It
sought approval to reallocate the surplus capital budget to support
development and fit out of unlet units. It also requested delegated
authority for Officers to investigate and adopt a policy of
retaining the units in a Special Purpose Vehicle (SPV), to maximise
commercial opportunity and potentially provide an attractive option
for disposal at a later date.
 
Finally, it sought approval to procure partners to provide Asset
and Property Management services for the estate.

 

 

13.2

RESOLVED UNANIMOUSLY: That the Finance and
Performance Policy Committee:-
 
a)   
Note the scale and impact of the Heart of the City II Estate; the
successful delivery of the capital works to budget and the
successes of letting activity made thus far.
b)   
Approve the reallocation of the remaining approved capital budgets
as per Appendix 1.
c)   
Note the updated Business Plan and the impact on the 26/27 Revenue
Budget.
d)   
Approve the commission of an Asset Management services provider for
the Heart of the City II estate, via direct award.
e)   
Approve the commission of Property Management services via an open
tendering process.
f)     
Note that officers will explore the creation of the most
appropriate vehicle to maximise rental income in the scheme and
provide an attractive proposition for investment into this vehicle
as part of a potential long-term disposal plan, and approve the
commission of financial, legal, and technical advice necessary for
that work A further report will be provided to the Committee at a
later date.

 

 

13.3

Reasons for Decision

 

 

13.3.1

The
Council needs to provide efficient asset and property management
services to ensure NOI is maximised and the Estate is run
effectively. It also needs to ensure that the Estate is structured
in a way that maximises the financial and investment returns to the
Council. This report requests that the Committee approves the
procurement of asset and property management services and delegates
authority to Officers to structure the Estate in a manner that
achieves these objectives.

 

 

13.4

Alternatives Considered and Rejected

 

 

13.4.1

Return
the proposed virement amount to the overall capital budget. This
has been rejected as capital incentives are the expectation of any
prospective tenant. Not having sufficient budget would
significantly limit our ability to attract tenants at a scale and
significance that is deserving of the development.

 

 

13.4.2

Dispose
on a block-by-block basis the individual blocks as and when we
are able to. This has been rejected as
the estate has the potential to return a much higher receipt to the
Council by offering up all the blocks in an SPV as part of a
specific scheme.