Agenda item

To consider the report of the Strategic Director of Corporate Resources.

Agreed:

RESOLVED that the Executive agree:

(1) the sale of the Former Clifton Hill Leisure Centre site to Preferred Homes Limited for £3.375 million at an undervalue of £425,000, conditional upon planning approval being granted for the delivery of 100% Affordable Rent Extra Care housing scheme for older people; and

(2) that the Head of Commercial Assets, in consultation with the Strategic Director of Corporate Resources (s.151 officer) and the Leader, be granted delegated authority to approve the final terms of the sale.

RECOMMENDED that Council approve a budget for £50,000, funded by anticipated capital receipts to cover disposal costs (including external agency and legal fees) associated with this sale.

Reason for Decision: As set out in the report.

The Executive received the report which sought approval for the disposal of the Former Clifton Hill Leisure Centre site to the highest bidder for the delivery of a 100% Affordable Rent Extra Care housing scheme for older people, following receipt of tenders.

Particular reference was made to:-

·         Exeter City Council had originally sold the site to Exeter City Living (ECL) for £2.4 million which was considered at that time, to be a significant undervalue compared to the independent market value for best consideration purposes;

·         Secretary of State approval had been granted for the sale, enabling the Council to buy back the site back from ECL for approximately £3.03 million;

·         the site had since been gone out to tender, and had received a number of bids, in which the highest bid recommended for approval was £3.375 million. Another higher bid submitted was received, but was withdrawn;

·         the bid would deliver a 72-unit affordable rent extra care scheme on the site and an independent valuation had been undertaken for best consideration purposes;

·         the current sale was deemed to be an undervalue of £425,000;

·         due to changes in procurement rules and new subsidy controls, the subsidy control report included in the agenda would be sent to the Government for formal registration as an undervalued sale; and

·         a letter of support had been received from Devon County Council for the development of an additional extra care facility in the city.

During the discussion, Executive Members raised the following points and questions:-

·         although the report refers to an undervalue, the Council had foregone £425,000 in potential receipts by not permitting student accommodation, demonstrating the Councils commitment to delivering 100% affordable rent, extra care housing and prioritising community needs and a balanced use of the site;

·         the letter of support from Devon County Council highlighting the need for extra care schemes was welcomed;

·         the preferred buyer was acknowledged for their sustainable building practices, including the use of air source heat pumps and solar PV;

·         the approach maintained a balance of maintaining both green spaces and delivering homes;

·         there was interest in further community engagement, particularly with residents around Portland Street, regarding the development and planning application process;

·         the development would help free up NHS beds, as evidenced by the success of the similar Edwards Court facility;

·         the location was in a scenic area adjacent to Belmont Park, and would be a highly desirable living area for future residents; and

·         the development would reduce pressure on other facilities and support independent living for residents.

The Leader advised that following an enquiry received that day, that recommendation 2.2 of the report sought delegated authority to the Head of Commercial Assets in consultation with the Strategic Director of Corporate Resources and himself, and that the final terms would be considered appropriately, notably the safety aspects. He further advised that he would notify ward Councillors and the Executive of the outcome of any further discussions with the developer.

Opposition group leaders raised the following points and questions:

·         the Leader was thanked for his time in responding to the enquiry and confirming how they would proceed, notably in addressing active travel and bike storage;

·         was the sale and receipts money going to be used to address the debt or be used to move projects forward?

·         could it be confirmed that recommendation 2.3 of the report is a Council decision?

·         the recommendation and the site future use was welcomed; and

·         clarification was sought on figures outlined in the report and sequence of events with the selling and buying of the land.

In response to questions raised, the Strategic Director for Corporate Resources advised that:-

·         the Council would include opportunities for community engagement in negotiations with the developer, and would be working to develop a programme for ongoing engagement;

·         there was an outstanding debt associated with the site of £3.037 million and would be paid off from the capital receipt and monies from the sale of Mary Arches and the majority of the Mary Arches capital receipt, once received, would be available for future capital projects;

·         the Council could not leave any outstanding debt once an asset is disposed of;

·         the capital receipts from this sale and the Mary Arches sale together would more than cover the outstanding debt related to Exeter City Living (ECL); and

·         the outstanding debt was not limited to just Clifton Hill but to other projects and when the Council previously sold the site to ECL, the best consideration value was over £7 million, necessitating that Secretary of State approval was needed due to significant undervalue.

The Leader advised that previous safety concerns, particularly from the police, would be revisited in discussions with the developer and highlighted that the Council could achieve a higher sale price by breaking the Council's promise not to build student accommodation. He confirmed this was not an option being pursued and that the Council was committed to maintaining community trust and honouring prior commitments.

The Leader moved the recommendations, which were seconded by Councillor Wright, voted upon, and CARRIED unanimously

RESOLVED that the Executive agree:

(1) the sale of the Former Clifton Hill Leisure Centre site to Preferred Homes Limited for £3.375 million at an undervalue of £425,000, conditional upon planning approval being granted for the delivery of 100% Affordable Rent Extra Care housing scheme for older people; and

(2) that the Head of Commercial Assets, in consultation with the Strategic Director of Corporate Resources (s.151 officer) and the Leader, be granted delegated authority to approve the final terms of the sale.

RECOMMENDED that Council approve a budget for £50,000, funded by anticipated capital receipts to cover disposal costs (including external agency and legal fees) associated with this sale.