Manchester City Council Item 8 Executive 22 July 2009

Manchester City Council Report for Resolution

Report To: Executive – 22 nd July 2009

Subject: National Indoor BMX Centre

Report of: Chief Executive Chief Executive, New East Manchester Ltd.

Summary

This report updates the Executive on proposals to develop a National Indoor BMX Centre at along with associated public realm as part of a wider Velopark and the vision for the overall development of Sportcity going forward. The report requests that the Executive recommend to the Council that the Capital Programme is increased and authority is delegated to the Chief Executive and the Chief Executive of New East Manchester Ltd (NEM) to negotiate and agree terms with third party funders, to procure contractors to undertake the works and to agree long term governance and leasing arrangements for the Velodrome and the new BMX Centre.

Recommendations:

The Executive is asked to:

1. Note the progress made in developing proposals and securing funding for a new National Indoor BMX Centre at Sportcity in East Manchester and to approve the project;

2. Recommend to the Council that the Capital Programme is increased by a total of £24.35; financed from capital grants of £15.88 million and a Capital Fund Contribution of £ 8.47million.

3. Delegate to the Chief Executive and the Chief Executive of NEM, in consultation with the City Treasurer, Head of Leisure and the Executive Member for Arts and Leisure, authority to provide grant support to the Federation of a maximum of £80,000 to facilitate their move into temporary office accommodation;

4. Delegate to the Chief Executive and the Chief Executive of NEM, in consultation with the City Treasurer and Executive Members authority to negotiate and agree terms with any third party funders;

5. Delegate to the Chief Executive, the Chief Executive of NEM, the City Solicitor and the Head of Leisure authority to agree with Sport and others long term governance arrangements for the new BMX Centre together with the Velodrome supported by a long term sustainable business plan; Manchester City Council Item 8 Executive 22 July 2009

6. Delegate to the Chief Executive and the Chief Executive of NEM authority to negotiate and agree the terms of disposal of the facility at nil consideration in order to implement the long-term governance arrangements; and

7. Delegate to the City Solicitor authority to complete all the necessary documentation, to obtain any necessary statutory consents and take all other steps necessary to implement the above decisions.

Wards Affected: Ancoats and Clayton

Community Strategy Spine Summary of the contribution to the strategy

Performance of the economy of The new National Indoor BMX Centre aims to the region and sub region further the economic growth of Manchester and the sub region by enhancing Sportcity as world class sporting destination.

Reaching full potential in The development of the National Indoor BMX education and employment Centre will provide a number of direct and indirect employment opportunities and will provide a catalyst for a range of wider business opportunities. It will become the long-term permanent for the British Cycling Federation and lead to the creation of 64 net full time jobs and safeguard 100 jobs.

Individual and collective self The National Indoor BMX Centre will provide esteem – mutual respect opportunities to three key groups, including elite athletes, schools and the wider community to participate in a range of sports activities.

Neighbourhoods of Choice The National Indoor BMX Centre will build on East Manchester’s established portfolio of world class sporting venues, which are accessible to local communities and will further enhance the area’s profile and attractiveness. Programmed access for local schools will be accommodated within the Business Plan for the new facility.

Full details are in the body of the report, along with any implications for:

• Equal Opportunities Policy • Risk Management • Legal Considerations

Manchester City Council Item 8 Executive 22 July 2009

Financial Consequences - Revenue

Manchester City Council currently provides an annual grant to the Velodrome Trust of £26,000 and has agreed the application of discretionary rates relief for the building.

A revenue business plan for the Velodrome and BMX Centre has been drafted and a break even position is achieved subject to an annual revenue grant of £230,000 from Sport England and Manchester City Council being responsible for all planned repairs and maintenance of the structure and fabric of both the buildings.

Provision of revenue grant support to the British Cycling Federation of a maximum of £80,000 to facilitate their move into temporary office accommodation; to be funded from corporate contingencies.

Financial Consequences – Capital

The total proposed capital costs of the scheme is £24.350 million, this includes £19.55 million estimated cost for the construction of the BMX centre, and £4.8 million for the first phase of public realm works to support the development of the wider Velopark and deliver a sense of place.

The bid to Sport England has received an outline commitment for grant funding of £3 million subject to final approval; in addition NWDA have agreed provision of £8.08m grant funding in principle for the BMX Centre subject to final approval in September 2009. The first phase of the public realm will be funded from a grant from the Homes and Communities Agency (HCA) of £2.4 million and £2.4 million ERDF funding pending application approval, a decision is expected in September 2009. Manchester will be asked to make a capital contribution in the region of £8.47 million over the two years of construction 2009/10 to 2010/2011 The City Treasurer has confirmed the Capital Fund can meet this total contribution of £8.47 million.

The recommendations in this report, if approved, will increase the capital budget by £24.350 million (£2.618 million in 2009/10, £21.007 million in 2010/11 and £0.725 million in 2011/12).

Subject to a review of trust arrangements for the Velodrome and the BMX Centre the Council will also have the additional costs of landlord responsibilities for both buildings. The lease of the new facility and the Velodrome will be transferred at nil consideration.

Contact Officers:

Name: Eddie Smith Position: Chief Executive, NEM Telephone: 0161 223 1155 E-mail: [email protected] Manchester City Council Item 8 Executive 22 July 2009

Name: Karen Tierney Position: NEM Telephone: 0161 223 1155 E-mail: [email protected]

Name: Des Gardner Position: Head of Regeneration (Legal) Telephone: 0161 234 4599 E-mail: [email protected]

Name: Ceri Taylor Position: Head of Corporate Finance Capital Finance, Projects and VAT Telephone: 0161 234 3458 E-mail: [email protected]

Background documents (available for public inspection):

The following documents disclose important facts on which the report is based and have been relied upon in preparing the report. Copies of the background documents are available up to 4 years after the date of the meeting. If you would like a copy please contact one of the contact officers above.

Report to the Executive, 23 rd July 2008, Sportcity.

Manchester City Council Item 8 Executive 22 July 2009

1.0 Introduction

1.1 New East Manchester Ltd (NEM) and the City Council are working to bring forward a comprehensive approach to the future development of the Sportcity site in East Manchester ensuring that it maximises its contribution to strengthening the destination role of East Manchester by building upon its sporting and leisure facilities; improving the site’s integration with the wider area; and expanding employment opportunities for local residents.

1.2 As part of the overall strategy for Sportcity, NEM and the City Council are bringing forward plans to develop a new National Indoor BMX Centre adjacent to the : Velodrome along with associated high quality public realm enhancing its function as a velopark. This report sets out these proposals in further detail; seeks approval to the project and recommends the Council approve an increase in the Capital Programme to fund the project, in accordance with Section 2 of the Local Government Act 2000, which gives the Council power to support projects where it considers them to be in the interests of promoting the social, economic or environmental well-being of the area and having regard to the Community Strategy.

2.0 Background

2.1 Members received a report in July 2008 on actions taken to bring forward a comprehensive approach to development at Sportcity. Considerable momentum has been generated at Sportcity over the past 12 months and this has resulted in an emerging vision for its future development that seeks to build on its sporting identity and success to create a new destination for the city and the region.

2.2 The new National Indoor BMX Centre is a critical component of the strategy to enhance and extend Sportcity’s world class sporting infrastructure and aims to support further economic growth in the City of Manchester and the sub region by enhancing Sportcity as a world-class destination for sporting participation, activity and events. The National Indoor BMX Centre will be the first of its kind in Europe, capitalising on one of the fastest growing cycling disciplines. It will ensure that Manchester becomes the long term, permanent home of the British Cycling Federation, and will allow the North West to make a major contribution to the London 2012 Olympics.

2.3 The National Indoor BMX Centre builds on Sportcity’s established portfolio of world class sporting venues and will further add to the successful Events Strategy which includes a rolling programme of National, European and World Events in various sports. Proposals are also being developed to bring forward a first phase of new public realm at Sportcity, focusing on the National Cycling Centre and new BMX facility, providing high quality pedestrian and cycle linkages to the rest of Sportcity, and the new Metrolink stop on Ashton New Road.

Manchester City Council Item 8 Executive 22 July 2009

3. National Indoor BMX Centre

3.1 The 16,000 sq m National Indoor BMX Centre will be the first covered BMX venue in the country, with capacity to seat audiences of up to 2,000. The centre will offer both traditional BMX and supercross uses. The Centre’s specification has been agreed with Union Cycliste Internationale to ensure it is appropriate for international competition as well as with the national associations for supporting sports uses to be accommodated at the centre. Discussions are well advanced with the British Cycling Federation (BCF) who intend to occupy the office space within the new Centre, thus making Manchester the Federation’s long term home.

3.2 The National Indoor BMX Centre will offer core programmes to three key groups, including elites, schools and the community. The BCF will use the facility for elite training in the run-up to the 2012 Olympics and provide added capacity to host national international events, whilst also extending participation in cycling disciplines. Providing the national training for the BMX team it is estimated that the enhanced facilities will provide support to 60 elite athletes, including 20 involved in BMX and related disciplines and 40 in the main cycling squad.

3.3 International, national, regional and local events will be hosted at the Centre equating to between 10-12 events per annum, with the potential to attract around 23,000 visitors per year. Locating the facility alongside the main Velodrome will encourage cross over with other cycling events, a trend illustrated by ’s ambition to combine BMX and other cycling disciplines for the 2012 Olympics.

3.4 The centre will be available during school hours, in the evenings and at weekends and will therefore ensure public engagement in sport. A comprehensive school and community use programme has been developed to maximise the opportunities for young people in local schools and as well as the wider community to use the centre. School programmes will equate to around 25 hours a week at the centre and will be in the form of a blend of activities aimed at engaging young people from local schools in the sport, providing a stimulating environment where they can develop to their full potential. Community programmes will be focused on targeted user groups as well as open sessions. In total the Centre will generate over 120,000 user visits per annum.

3.5 The project includes for the design and construction of a fully enclosed 70x100m BMX racing track area with a clear structural span and the ability to seat approximately 2000 spectators at national BMX competitions. The building will contain all the support and ancillary accommodation associated with the track and will be physically linked to , occupying the current east car park. The link between the buildings will provide access to and between both buildings at ground and first floors and will contain reception, administration, restaurant and retail areas. The first floor will provide facilities for spectators and also office space covering Manchester City Council Item 8 Executive 22 July 2009

approximately 1100 m2. The main structure will be constructed in steel that will create a clear and uninterrupted arena space.

3.6 The new BMX facility will be complemented by the first phase of new public realm at Sportcity. This will include the development of a network of pedestrian and cycle paths supporting the development of the wider Velopark and creating new, direct links between the wide range of mixed-use developments that exist or are being developed in the area. The works will connect National Cycling Centre and BMX facility itself to Clayton Vale and Philips Park and via a promenade to the canal towpath, the Local District Centre, existing bus routes and the new Metrolink stop, as well as the residential and commercial opportunities in West. This includes the creation of a new pedestrian/cyclist bridge crossing over the canal, providing an impressive gateway to Sportcity.

3.7 The National Cycling Centre and BMX facility will have two main entrances, to the north and south of the atrium that links the two buildings. The land surrounding these entrances provides the opportunity to create dynamic, multi-purpose areas that forms part of a series of cohesive, complimentary urban spaces alongside the new paths and boulevards. A 2,000msq plaza along the southern elevation of the Centre will be furnished with seating and urban design elements creating flexible space where people can dwell, for example for events, but also designed to be suitable for use by wheel sports. The public realm works will also include upgrading an existing emergency access onto Stuart Street to serve the car parks, which will be re-planned to suit the new development, including the provision of secure parking and storage for BCF to compliment their new office space in the BMX Centre. This first phase of the public realm is estimated to cost £4.8million, with funding being sought from the Homes and Communities Agency (HCA) and £2.4 million ERDF funding currently being applied for, with a decision expected by September 2009. The intention is for these works to be contracted as part of the new BMX facility.

4.0 Procurement

4.1 The proposed works are the subject of an OJEU Notice which was placed on 6th July 2009 and which will allow the letting of a single contract covering both the proposed building works associated with the BMX facility and the public realm works. This approach will minimise disruption to the existing Velodrome facility during construction works and conflict between various contracts if the works were to be let separately.

4.2 Following formal sign off of the Work Stage D proposals, technical information (Work Stage E) will be compiled for issue with tender documents. It is anticipated that five contractors will be invited to tender following assessment of returns of a Pre Qualification Questionnaire which will be issued as part of the OJEU process. The Building Contract will be let under NEC Conditions of Contract on a ‘Design and Build’ basis. The proposed programme for procuring the project is detailed below.

Manchester City Council Item 8 Executive 22 July 2009

Milestone Date

Stage D Report Issued 17 th July 2009 Board Meeting and Approval to Proceed 28 th July 2009 Work Stage E 29 th July – 6 th October 2009 Tender Documents Complete 13 th October 2009 Tender Returns 10 th December 2009 Start on Site January 2010 Completion 31 st March 2011

5.0 Financial Summary

5.1 The total capital cost of completing the scheme has been estimated at £24.35 million, this includes £19.55 million for the construction of the BMX centre and £4.8 million for the first phase of public realm works. These are provisional costs and will be further clarified on issue of the Stage D Report. The estimated costs of the scheme will be robustly scrutinised and any significant alterations will be discussed with Executive Members.

5.2 In order to support the BCF’s commitment to Manchester as its long term home based within the new BMX Centre, BCF need to move temporarily to accommodate an increased number of staff and to meet the requirements of the existing Great Britain Cycling Team within Velodrome. This will be for a period of 18 to 24 months whilst the Indoor BMX Centre is developed, which will then become BCF’s permanent home. An agreement has been reached for BCF to take up office space in the Fujitsu Building at Central Park but in order to facilitate this move there is a need for contributions towards fit out and any dilapidations at the end of the lease. This will be a simple fit out aimed at minimising any dilapidations. A contribution to meeting these costs will be critical to ensure that BCF retain Manchester as the home of British Cycling, supporting the creation of 64 net additional jobs and safeguarding 100 further jobs. It is proposed that the City Council provide a grant of £80,000 to BCF to meet these costs.

5.3 The funding partners for the BMX centre are Sport England contributing grant funding of £3 million and NWDA providing grant funding of £8.08 million, both subject to formal approval. Manchester will be asked to make a capital contribution to the costs of the BMX Centre in the region of £8.47 million over the two years of construction 2009/10 to 2010/2011 along with grant funding of £80,000 to the BCF, resulting in a total contribution of £8.55 million.

5.4 The first phase of the public realm is estimated to cost £4.8million, to be funded from a grant from the Homes and Communities Agency (HCA) of £2.4 million and £2.4 million ERDF funding pending application approval, a decision is expected in September 2009.

5.5 The recommendations in this report, if approved, will increase the capital budget by £24.350 million (£2.618 million in 2009/10, £21.007 million in Manchester City Council Item 8 Executive 22 July 2009

2010/11 and £0.725 million in 2011/12), financed from capital grants of £15.88 million and a Capital Fund Contribution of £8.47 million .

5.6 Subject to a review of trust arrangements for the Velodrome and the BMX Centre the Council will also have the additional costs of landlord responsibilities for both buildings.

5.7 Manchester City Council currently provide an annual grant to the Velodrome Trust of £26,000 and it is proposed this will continue.

5.8 A revenue business plan for the Velodrome and BMX Centre has been drafted and a break even position is achieved provided that the annual revenue grant of £230,000 from Sport England continues to be received and Manchester City Council takes responsibility for all planned repair and maintenance to the structure and fabric of both buildings. The final position on the business plan will be determined as part of the review of governance arrangements for the Velodrome and the BMX Centre and following negotiation with Sport England.

6.0 Governance and Legal Issues

6.1 A Sportcity Board has been established to oversee the development of Sportcity, chaired by the Chief Executive and including senior representatives from NEM, the HCA, NWDA, Sport England and MCFC. This overarching Board provides a mechanism to ensure that the three strands of investment across Sportcity work together to ensure the delivery of a comprehensive vision for Sportcity.

6.2 The management the construction of the National Indoor BMX Centre and the associated public realm project itself is governed by an appropriately assembled Board, chaired by the Chief Executive of NEM and consists of representatives from Manchester Leisure, Corporate Services, the British Cycling Federation, the Velodrome Trust, the NWDA and Sport England. Major decisions and Gateway approvals are all governed at Board level. A Project Manager has been appointed to manage the project through to completion.

6.3 The Governance arrangements for the ongoing operation of the Velodrome and BMX Centre are also to be reviewed in order to ensure that the facilities are operated in the most efficient way. The review will be undertaken in consultation with the Velodrome Trust, funders and other stakeholders and will form part of the process to develop a sustainable business plan for the facilities. Issues to be considered in the review will include the need to ensure that work to repair and maintain the facility are delivered. The operational arrangements for the facility will also be reviewed in the light of the recent changes across the wider Sportcity estate to ensure that any efficiencies are captured. This will require agreements with funders to ensure that support continues in place to define a sustainable business plan, allowing all partners to be confident that the enhanced facilities will deliver long-term benefits to the area.

Manchester City Council Item 8 Executive 22 July 2009

6.4 As part of the long-term governance arrangements it is proposed that the new facility and the existing Velodrome will be owned and operated as a single facility. In order to achieve this the City Council will need to enter into a similar leasehold structure as currently exists for the Velodrome under which the facility is leased to the operator for a peppercorn. The terms of the lease will enable the operator to control the facility and assume responsibility for insurance and other outgoings. In order to secure the transfer at nil consideration it may be necessary to secure the Secretary of State’s consent, subject to more detailed legal advice as the matter progresses.

7.0 Contributing to the Community Strategy

(a) Performance of the economy of the region and sub region

7.2 The development of the National Indoor BMX Centre aims to support the economic growth of Manchester and the sub-region by building on the City’s portfolio of world class sporting venues and supporting Manchester’s development as a premier destination for sporting activities, capable of attracting high profile national and international events.

(b) Reaching full potential in education and employment

7.3 The economic impact of the National Indoor BMX Centre will be considerable, leading to a number of direct and indirect employment opportunities. Investment in the Centre will lead to the creation of 64 net new full time equivalent jobs and 100 safeguarded jobs and will generate 120,000 user visits a year. The centre will host a number of events every year that will attract audiences of 23,000 from across the UK and further afield generating a forecast net GVA impact of £2.56m. The development also offers the opportunity to attract advanced cycle and wider performance enhancement businesses to the region, allowing for the development of the sports cluster, generating economic and reputational benefits to Manchester and the North West.

(c) Individual and collective self esteem – mutual respect

7.4 The National Indoor BMX Centre will provide opportunities to three key groups, including elite athletes, schools and the wider community to participate in a range of sports activities. The facility will provide the opportunity for elite athletes to train in the run up to the 2012 Olympics, and will also provide participation opportunities for local schools and the wider community through a dedicated schools programme, along with targeted community programmes as well as open sessions.

(d) Neighbourhoods of Choice

7.5 The National Indoor BMX Centre will build on East Manchester’s established portfolio of world class sporting venues, which are accessible to local communities and will further enhance the area’s profile and attractiveness. The new public realm will enhance the local environment providing an amenity Manchester City Council Item 8 Executive 22 July 2009

for the local community and visitors, as well as enhancing the connections between Sportcity and surrounding neighbourhoods and help develop a sense of place.

8. Key Polices and Considerations

(a) Equal Opportunities

8.1 A key aim of the proposed development is to ensure that schools and local communities are able to access the facilities provided and to ensure that local people are able to benefit from the wider economic benefits generated by the development. In addition there is a commitment to ensure that the design standards of the development will comply with the highest standards of accessibility.

(b) Risk Management

8.2 A risk workshop has been held and a number of risks identified and allocated to appropriate parties for management. Further workshops will be held following the completion of Work Stage D to reflect to advancement within the design process and to fully identify risks for the construction phase of the works. In following a single stage Design and Build type of contract many of the construction related risks, in terms of unknowns and cost, will be passed to the successful contractor. There will remain with the Employer the risk of Client Introduced Change however this will be minimised by the thorough Work Stage E period prior to tender.

(c) Legal Considerations

8.3 In order to secure the necessary grant funding the City Council will enter into detailed grant agreements with the funding bodies. The City Solicitor’s division will continue to support the project team in relation to these agreements. Advice has also been given in connection with compliance with the public procurement rules and the land transactions needed to implement the scheme. As set out in the report it may be necessary to secure the Secretary of State’s approval to the grant of a peppercorn lease to the operator of the facility.