Content

 
 
9.1
 
 
 
 
 
 
9.2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9.3

 
 
The Finance and Performance Policy Committee
considered a report of the Executive Director of Neighbourhood
Services which provided an update on the previously approved
recommendation in 2017 to surrender the existing lease of the
Upperthorpe Healthy Living Centre (Zest Centre) from the
Upperthorpe and Netherthorpe Healthy Living Centre Trust (UNHLC)
and the grant of new lease to the Netherthorpe and Upperthorpe
Community Alliance (NUCA).
 
RESOLVED UNANIMOUSLY: That the
Finance and Performance Policy Committee: -
 

Approves to accept the proposal to
surrender of the existing head lease of the Zest Centre from the
UNHLC.
Approves to accept the proposal to
surrender of the existing underlease of the Zest Centre from the
NUCA.
Approves the grant of a new 30-year
lease to the NUCA as set out in this report.
Approves the termination the funding
agreement dated 1st August 2002 and made between the Council and
UNHLC.
Gives approval to set the budget (as
set out in sections 1 and 4.2 of this report) as part of the annual
budget setting process for a revised revenue funding amount linked
to the new lease. Noting that the current Zest Business Model
requests an uplift of £35,000 per annum on the sum described
in this report.
Gives approval for the award of
revenue grant funding to NUCA for the delivery of an agreed leisure
services specification, subject to the completion of a subsidy
control principles assessment to demonstrate, to the reasonable
satisfaction of the Director of Parks, Leisure and Libraries
Notes the decision of 23rd November
2021 and approval of capital investment in the Zest Centre.
Notes that funding of up to
£2,685,044 to deliver a 5-year programme of essential
lifecycle maintenance work at the Zest Centre will be transferred
via a capital funding agreement to NUCA, which will be subject to
approval via the Capital Programme report to Finance Committee in
July 2024.

 
Reasons for
Decision
 

9.3.1
 
 
 
 

It is expected that investment into improved
facilities will help to retain participation and usage of the Zest
Centre. Improved facilities will better meet customer expectations
of a modern and welcoming leisure and entertainment offer, will
contribute to the Council’s ambition to get more people more
active more often and towards tackling health inequalities across
the city by supporting the provision of facilities which encourage
people to be active in are area where there are poorer health
outcomes
 

9.3.2

As the Zest Centre is a strategically
important site for the Council in terms of provision of water space
and an important asset based on future expected population growth/
water demand to 2034, investment in the facility is required to
prevent continued deterioration, reduce future liabilities and
ensure the facility can continue to provide much needed water space
alongside wider leisure and community facilities and services.

 

 

9.3.3

The surrender and re-grant of a lease of 30
years in length would provide improved funding leverage security,
enable improved governance, strengthen security of tenure and to
maximise external investment; improving both the immediate and
long-term viability of the Zest Centre as a valuable community
asset and inclusive leisure service provider.

 

 

9.4

Alternatives
Considered and Rejected

 

 

9.4.1

Option 1 - do nothing In terms of the
capital investment, this is not a realistic option because without
investment in the Zest Centre the building will continue to
deteriorate and there is a significant risk that due to this
deterioration, the Zest Centre would come back to the Council as a
liability. In terms of a lease, if we did nothing, the existing
lease would expire in 8 years. The current lease does not provide
any opportunity for NUCA to secure external funding due to limited
security of tenure, so doing nothing would severely limit
possibilities of further funding being secured. Without investment
and the new lease, if NUCA no longer operated the Zest Centre and
it returns to the Council, the likelihood of another operator
taking on a lease of the property with the current liabilities is
limited, so it would be a liability for the Council and would
potentially close.

 

 

9.4.2

Option 2 – extend existing lease
The existing lease could be extended rather than a surrender of the
lease from the Upperthorpe & Netherthorpe Healthy Living Centre
Trust and a grant of a new lease of the Zest Centre to NUCA.
However, due to the fact that the operating arrangements and
management structure have evolved since 2002, this lease
arrangements continue to be complex and not fully reflect how the
site is operated, which is also a barrier when approaching funders.
This option does not achieve the simplified and updated governance
required due to reflect the changes which have taken place over the
years to the management and operation.

 

 

9.4.3

Option 3 – procure a new operator
Procurement of a new operator for the Zest Centre as part of the
Sport and Leisure Facility Procurement – this was not pursued
due to the remaining term on the existing lease – at the time
of the procurement exercise there was 10 years remaining on the
lease. The lease and operation of the building are linked and
therefore it was not possible to go to the market for a new
operator.

 

 

9.4.4

Option 4 – approach the market for a
new leaseholder It is not possible to approach the market for a
new operator while the existing lease is in place without NUCA
surrendering their interest in the property, which is not something
they have ever indicated they wanted to do.

 

 

9.4.5

Option 5 – surrender the existing
lease and grant a new lease Surrender the existing lease of the
Zest Centre with UNHLC and grant a new lease NUCA, alongside
investment in the Zest Centre as outlined in this report. This is
the recommended option.