Item 2

Glasgow City Council 20th September 2018

Contracts & Property Committee

Report by Executive Director of Regeneration and the Economy

Contact: Ian Robertson Ext: 74750

DISPOSAL OF THE FORMER PRIMARY SCHOOL & SCHOOLHOUSE, MARWICK STREET, G31 3NG

Purpose of Report:

To advise Committee on the outcome of a marketing exercise carried out by City Property (Glasgow) LLP in respect of the above property.

Recommendations:

That Committee:

1. notes the contents of this report; and

2. approves the sale of the above subjects to Spectrum Properties () Limited subject to the terms and conditions as outlined in this report.

Ward No(s): 22 Citywide:

Local member(s) advised: Yes X No consulted: Yes  No

Report to: Contracts & Property Committee

From: Managing Director of City Property (Glasgow) LLP

Date: 20 September 2018

Subject: Disposal of the Former Haghill Primary School & Schoolhouse, Marwick Street, Glasgow, G31 3NG

1. Holding Account

1.1 Education Services

2. Description

2.1 The subjects fall within the Dennistoun Conservation Area and comprise the category “B” listed former school and schoolhouse. The site extends to 0.55 hectares (1.37 acres) or thereby as shown on the plan attached to this report.

2.2 The former primary school and schoolhouse are located south of Alexandra Park in the Dennistoun area of the city, approximately 2 miles from the city centre.

2.3 The school buildings and ground occupy a complete street block which is bounded by Marwick Street, Appin Road, Walter Street and Aitken Street.

2.4 The subjects comprise a substantial 3 storey school building with basement and a 2 storey schoolhouse, both of which are red sandstone ashlar with slate roof which were designed by A Lindsay Miller in 1904. Both buildings are category “B” listed and are noted on the Buildings at Risk Register for Scotland.

2.5 The schoolhouse was declared surplus on 1st April 1996 and the former school was declared surplus on 1st August 2004 shortly after the school closed in June 2004.

2.6 Despite interest from a local housing association dating back to 2006 plans for the subjects have failed to come to fruition due to a combination of the significant costs associated with any redevelopment and the lack of available grant funding. Indeed, Council funded feasibility studies undertaken in 2006 and 2015 for a scheme similar to the one now proposed produced cost estimates of some £5.2M and £7.5M respectively, the deterioration of the property being a major cost contributor.

2.7 Furthermore, the intervening downturn witnessed in the property market combined with the continued deterioration in the condition of both buildings has resulted in no meaningful and viable interest from either a private developer or a social landlord over a prolonged period of time. Whilst no up-to-date cost estimates are available it is acknowledged that the buildings in their current condition present a very challenging redevelopment proposition.

2.8 As a result of this prolonged vacancy and lack of investment in the building fabric, both buildings have fallen into a state of considerable disrepair and continue to deteriorate year on year. This has been evidenced recently by the spend of some £15,000 for the removal of several sections of the boundary wall which Building Control identified as dangerous. In addition City Property’s Technical Team advised that the cost of demolishing the subjects would be in the region of £300,000.

2.9 City Property was first instructed by Housing Investment to bring this property to the market in late 2016 as a forthcoming opportunity. A full marketing campaign commenced in December 2017 with a closing date for offers being set in March of this year.

2.10 It is considered that the former School and Schoolhouse do not form part of the Council’s Common Good. The subjects were acquired by the Council’s predecessors, the School Board of Glasgow, using statutory powers and they are not on the list of common good assets. There are no conditions in the title which would suggest that the subjects were being acquired to be held or used as part of the common good. There are no other relevant factors to suggest that the subjects would form part of the common good of the Council.

3. Background

3.1 The subjects were marketed by City Property in December 2017 with a closing date of 29th March 2018. One offer for £75,000 (SEVENTY-FIVE THOUSAND POUNDS STERLING) was received from Spectrum Properties (Scotland) Limited at the closing date. City Property is of the opinion that this figure is representative of Market Value when consideration is given to both the aforementioned condition, refurbishment costs and on-going maintenance and inspection costs.

3.2 The marketing brief was specific in that the subjects were marketed as a restoration opportunity and the guidance for bidders’ document detailed the information sought for a bid to be deemed compliant.

3.3 By way of additional background Members may wish to note that between 1873 and 1918, Glasgow School Board built over 75 parish schools, each accommodating 800 to 1000 children for reasons of efficiency and economy. Unlike other School Boards, Glasgow appointed a range of architects thus bringing a variety of character to the three-storey utilitarian school buildings. The last school built by Glasgow School Board opened in 1916. Of those that do remain many, like Haghill Primary School & Schoolhouse, have fallen into a state of disrepair and therefore present challenging redevelopment propositions given their scale and listed status.

4. Proposal

4.1 The proposal submitted by Spectrum Properties (Scotland) Limited comprises a residential development of the existing school building and schoolhouse together with a four storey new build block on the eastern boundary of the site. The development proposal is to form 51 two bedroom flats, one 3 bedroomed house and associated car parking. The bid is deemed to be compliant in terms of the bid guidance issued to all interested parties.

4.2 City Property has verified with the proposed purchaser that there is funding available for both the acquisition and future development of the project.

4.3 In addition this developer has previously acquired similar properties and successfully redeveloped them including Hydepark Public School, now operating as a business Centre. In addition Primary school has been successfully converted to a residential development. More recently the company has acquired the former Shakespeare St School and is on site carrying out the first phase of a residential conversion.

5 Terms and Conditions

5.1 The subjects, shown edged in black and hatched on the attached Committee Plan,are to be sold to Spectrum Properties (Scotland) Limited (SC11598) (the Purchaser).

5.2 The proposal comprises a residential development of the existing school building and schoolhouse together with a four storey new build block on the eastern boundary of the site to form 51 two bedroom flats, one 3 bedroomed house and associated car parking. An agreed planning overage is to be paid should planning consent be granted for more than the proposed 52 units.

5.3 A total purchase price of £75,000 (SEVENTY-FIVE THOUSAND POUNDS STERLING), exclusive of VAT if applicable, will be payable for the subjects on the date of entry.

5.4 The Purchaser’s proposal is subject to the following conditions:

i. Planning Permission ii. Building Warrant iii. Listed building consent iv. Water Authority consent v. Roads construction consent

5.5 A deposit of 10% of the purchase price will be paid on conclusion of conditional missives, returnable only in the event that the purchaser does not secure planning permission or building warrant for their proposal.

5.6 The purchaser will be granted 9 months from the date of conclusion of missives to obtain all necessary consents failing which the purchaser shall be entitled to resile from the missives without penalty due to or by either party. If the Purchaser is unable to waive, fulfil or purify any of the foregoing suspensive conditions within the forgoing timescale for matters out with its control, the Purchaser shall be entitled to an extension of time as is reasonable in the circumstances.

5.7 The purchaser shall be under obligation to complete the proposed development within 2 years of the date of entry, this date being deemed to have been triggered on purification of all of the suspensive conditions. In the event of default City Property would seek to challenge any delay and negotiate an extension of time as is reasonable in the circumstances. Any such extensions would be subject to an additional extension fee together with our reasonable legal and professional fees being borne by the purchaser.

5.8 If before completion of the development the purchaser obtains planning permission for more than 52 units on the site, the purchaser will pay to GCC an additional sum equaling £3,000 x number of units above 52.

5.9 The Council will benefit from a clawback provision of 50% of the profit should the Purchaser sell the property without carrying out any meaningful development. This provision shall run for a period of five years from the date of entry.

5.10 That the Executive Director of Regeneration and the Economy in consultation with the Director of Governance and Solicitor to the Council be authorised to conclude all other matters pertaining to the disposal of the property and to enter into the necessary legal agreements on terms which are in the best interests of the Council.

6 Policy and Resource Implications

Resource Implications:

Financial: The proposal will generate a capital receipt of £75,000 for the Council and Council tax income once the properties are occupied.

Legal: To conclude the appropriate legal agreement.

Personnel: Not Applicable.

Procurement: Not Applicable.

Council Strategic Plan: A world class city: Build strong and resilient neighbourhoods and communities; Deliver local services and neighbourhoods informed by our residents’ views.

Equality Impacts: An Equality Impact Assessment (EQIA) is not required in this instance.

Does the proposal No specific equality related outcomes. support the Council’s Equality Outcomes 2017-22

What are the Not Applicable. potential equality impacts as a result of this report?

Sustainability Impacts:

Environmental: Restoration of a B listed building and new build development on adjacent former playground site.

Social: The proposed development will create new residential housing and in addition will contribute positively to the local community as well as the citizens of Glasgow.

Economic: Reduction in Council maintenance costs.

This disposal complies with the Council’s Common Good: Approved Policy on Common Good Assets.

Privacy and Data Not Applicable. Protection impacts:

7 Recommendations

That Committee

1. notes the contents of this report; and

2. approves the sale of the above subjects to Spectrum Properties (Scotland) Limited subject to the terms and conditions as outlined in this report.