Purpose

Cabinet is recommended to approve the final delivery terms for Phase 1 of Avenue Road estate regeneration.

Decision

Cabinet:

(1)          approved that the council proceeds to Conditional Exchange of the Agreement for Lease with L&G and enters into the necessary legal documents to transfer the Site under a long lease and allow construction of the first block, consisting of 116 social rented homes;

(2)          approved the viability appraisal and agree the council contribution and financing approach, within the financial envelope, set out at Appendix 3 of the report;

(3)          delegated the agreement of financial terms (price agreement) to take place at a date no later than 31st December 2026, at terms within the financial envelope, to the Strategic Director of Resources in consultation with the Strategic Director of Place;

(4)          delegated approval of the principal contractor appointment sum (build cost) and subsequent figure set in the final viability appraisal to the Strategic Director of Place in consultation with the Strategic Director of Resources;

(5)          approved that income from disposed council sites, as set out in the schedule at Appendix 6 of the report, is used as part of the funding strategy;

(6)          approved a budget of £3.837m to complete the delivery of Phase 1, as set out at Appendix 3 of the report;

(7)          noted the viability position of Phase 2 (as set out at Appendix 3 of the report), which demonstrates that the scheme is affordable to the council;

(8)          approved a budget of £400k to progress feasibility of Phase 2 (as set out at Appendix 3 of the report) and noted that a further report will be brought to Cabinet to set out financial implications and full delivery proposals;

(9)          approved the decant strategy, as set out at Appendix 5 of the report; and

(10)       approved that Rights of Light compensation consultation is undertaken.

Options & Alternatives Considered

The Final Business Case for the scheme sets out the options and alternative delivery routes for Avenue Road estate. ‘Refurbishment’ and ‘Do Minimum’ options for the estate have not been considered as part of the revised business case as they were ruled as part of the original OBC in 2021, due to being the costliest options and those with the least qualitative benefits for the estate. The Business Case attached at Appendix 4 considers the alternative options available to the council in respect of the delivery of Avenue Road estate as part of the Economic Case.