For Publication
REPORT TO: CABINET 12 December 2011
AGENDA ITEM: 26
SUBJECT: CCURV Initial Development Property Update LEAD OFFICER: Stephen McDonald Executive Director, Planning and Environment CABINET MEMBER: Cllr Tim Pollard Deputy Leader and Cabinet Member for Regeneration & Economic Development and Children Families and Learners
WARDS: All
CORPORATE PRIORITY/POLICY CONTEXT:
CCURV contributes to the following: • Regenerating the town and district centres • Increasing the supply of affordable housing • Reducing worklessness • Raising adult skills and increasing adult qualifications • Providing better cultural and leisure opportunities • Increasing the number of young people in employment, education and training FINANCIAL SUMMARY:
Financial implications are set out in the Part B paper.
FORWARD PLAN KEY DECISION REFERENCE NO.: not a key decision
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The Leader of the Council has delegated to the Cabinet the power to make the decisions set out in the recommendations below.
1. RECOMMENDATIONS
1.1 To note progress of the CCURV programme for the Initial Development Properties of Taberner House, College Green and Tamworth Annex.
1.2 That the Executive Director of Planning and Environment in consultation with the Council Secretary and Solicitor, be given executive delegated authority to undertake relevant steps and conclude any agreements necessary to:
• Remove Tamworth Annex from the CCURV Initial Development Properties and replace it with a substitute site at best consideration;
• Investigate the bringing forward of Rees House and Morland Lodge as a substitute site for Tamworth Annex and subject to compliance with the requirements concerning land disposals under the Local Government Act 1972 , commit the site to CCURV; and
• Apply a temporary freeze of the A Loan coupon payment for College Green and Barclay Road Annex to commence from the long stop dates set out in the CCURV agreements or another such date as the parties may agree with appropriate justification.
1.3 To note that the former care home sites of Brigstock Manor, Cheriton House and Stroud Green Lodge will be formally offered to CCURV subject to Section 123 of the Local Government Act 1972 best consideration test and a report to Corporate Services Committee confirming that the Council is obtaining the best consideration; and
1.4 To note that Coleby Court will also be offered to CCURV subject to the site being declared surplus to Council requirements, Section 123 of the Local Government Act 1972 best consideration test and a report to Corporate Services Committee confirming that the Council is obtaining the best consideration.
2. EXECUTIVE SUMMARY
2.1 CCURV is a 50:50 joint venture partnership between Croydon Council and John Laing; its aim is to regenerate key sites across the borough commencing with the Initial Development Properties that were committed to CCURV at Commercial Close in November 2008 through the entering into of legally binding agreements with John Laing.
2.2 This report takes the opportunity to update Members on progress in relation to the Initial Development Properties of Taberner House, College Green (incorporating Barclay Road Annex) and Tamworth Annex. It builds on 286 information set out in the CCURV Annual Report 2010 presented to Cabinet in October 2010 (A96/11 refers) setting out each project’s current status and programme for redevelopment within the context of the change in market conditions and opportunities that have arisen since commercial close.
2.3 The paper focuses specifically on:
• Progress of options relating to the redevelopment of Taberner House that will commence following the completion of Bernard Weatherill House;
• The re-launch of the Fair Field masterplan that will define the future parameters for the redevelopment of College Green and Barclay Road Annex;
• The removal of Tamworth Annex from the CCURV Initial Development Properties and its replacement by a substitute site;
• The recommendation that subject to further assessment Rees House and Morland Lodge be a substitute site for Tamworth Annex and subject to the demonstration of best value and compliance with section 123 of the Local Government Act 1972, commit the site to CCURV as a replacement Initial Development Property;
• The principles around the application of a temporary freeze of the A Loan Coupon payment for College Green and Barclay Road Annex to commence and end at dates to be agreed with John Laing as set out in the report; and
• The offer of the former care home sites Brigstock Manor, Cheriton House, Coleby Court and Stroud Green Lodge to CCURV in accordance with clause 13.1 of the CCURV Members Agreement whereby CCURV has the first opportunity for site acquisition subject to Section 123 of the Local Government Act 1972 best consideration test.
3. DETAIL
3.1 When CCURV was created, the Council envisaged a rolling programme of site developments over the life of the vehicle. The initial competition to appoint a development partner was based on four development sites – Fell Road, Taberner House, College Green and Tamworth Annex. Other sites would then be considered by CCURV as they became surplus to Council requirements. This report focuses on the Initial Development Properties other than Fell Road where the construction of Bernard Wetherill House is on schedule.
3.2 The CCURV Annual Report 2010 sets out the current and anticipated economic conditions impacting on the CCURV programme. It notes a decline in residential markets during 2010, stabilising in 2011 and prediction of future growth between 2013 and 2015. This is further supported by Savills anticipating a future growth in the wider Croydon market following the implementation of the Metropolitan centre masterplans.
3.3 The programmes contained in the CCURV business plans for the Initial Development Properties have been realigned in order to take account of these 287 forecasts therefore improving the realisation of benefits that the redevelopment of these sites brings. A delay in the delivery of schemes until 2013 onwards, when markets are expected to improve, is of benefit to the business plans and ensures that there is adequate time to make certain that all of the necessary permissions and approvals are in place to guarantee delivery.
3.4 Taberner House
3.4.1 CCURV is a key stakeholder within the development of the Mid-Croydon masterplan, working closely with the masterplanning team in shaping future development proposals of the area and Taberner House which falls within the context of the draft masterplan.
3.4.2 In 2010, CCURV undertook an options study for the Taberner house site that looked at the development opportunities offered by Taberner House and also to inform the Mid-Croydon masterplan team. The option study considered two options. The first was for a refurbishment of the existing building converting it to residential and the second, a demolition of Taberner House and replacement with a comprehensive redevelopment of the site. Both options investigated the opportunities and constraints set out within the draft masterplan and included deliverability, phasing and the massing impact on the surrounding areas while being sympathetic to their immediate environment of The Queen’s Gardens, Bernard Weatherill House and the Town Hall. Both options were for residential schemes delivering a range of tenure and unit sizes.
3.4.3 CCURV’s preferred option and the one that is currently in early design stages is option two, a complete redevelopment of the site. This is in line with the draft masterplan and is at early stage discussions as part of a pre-application process with the Council as Local Planning Authority (LPA). Early involvement with the LPA in the design development of the scheme will ensure that it meets planning policies and guidance.
3.4.4 It is anticipated that a planning application will be submitted in the first half of 2012 which is within the programme required in order to commence on site when the Council relocates to Bernard Weatherill House in 2013/14.
3.5 College Green & Barclay Road Annex (‘College Green’)
3.5.1 In respect of College Green, the programme for the redevelopment of the site is later than originally envisaged in the CCURV Partnership Business Plan. This can be attributed to several reasons, in part to the change in market conditions and a delay in detailed transport modelling by Transport for London for the adjacent Wellesley Road. There has however, been considerable recent progress in relation to this site.
3.5.2 Members will recall that a masterplan for the site was commissioned by CCURV and completed in draft in March 2010. The masterplanning process was put on hold to allow other projects to progress and to ensure that the masterplan integrated into the Council’s Local Development Framework programme. 3.5.3 The masterplan is now in the process of being re-launched. The new masterplan, ‘Fair Field,’ will define the scale, quantum and type of development 288 for the College Green site and is being undertaken by CCURV and the Council in partnership. A stakeholder board was convened in September 2011 to guide the completion of the masterplan and CCURV is integral to the process. 3.5.4 It is intended that the Fair Field masterplan is adopted by the Council as Interim Planning Guidance following public consultation in 2012. The masterplan will inform the production of the Croydon Opportunity Area Planning Framework currently being developed together with the Mayor of London and inform the CCURV Business Plan and proposals for the future form of the redevelopment of College Green by CCURV. 3.5.5 In terms of land assembly, the Council has repurchased the Fairfield Car Park at College Green. Under the CCURV Member’s Agreement the Council is obliged to acquire the car park for the CCURV College Green redevelopment by spring 2014 (provided CCURV has achieved ‘Readiness to Develop Criteria’ by that stage). Under the CCURV Conditional Sale and Development Agreement, CCURV will acquire the asset from the Council for the price the Council has paid for it. 3.5.6 By acquiring the asset the Council ensures that it meets its obligations to CCURV, thus eliminating the risk of failing to secure the asset later and thereby incurring pre-development costs. Furthermore, by the Council acquiring the car park this financial year, it will gain £1.01m rental revenue per year prior to commencement of the CCURV redevelopment from NCP who operate the asset. 3.5.7 Additional land assembly is being pursued by John Laing and the Council who are in discussion with Croydon College regarding the acquisition of Barclay Road Annex; essential to the redevelopment of College Green. 3.5.8 Due to the delay in the original programme envisaged for the redevelopment of College Green when CCURV was established, John Laing has reasonably requested that there is a temporary ceasing of the payment of the A Loan Coupon for both College Green and Barclay Road Annex.
3.5.9 The A Loan is a proportion of the transfer value that is used to fund the schemes design and development costs of the Initial Development Properties. From Commercial Close onwards, the Council receives an interest at a rate of 4.75% (in respect of properties to which it has good title) on the difference between the total A Loan commitment of John Laing and the amount of the John Laing A Loan drawn down by CCURV from time to time – this is known as the unmatched A Loan.
3.5.10 CCURV pay the A Loan Coupon quarterly to the Council at a rate 4.75% of the College Green A Loan value and 0.05% of the Barclay Road Annex unmatched A Loan value. A temporary cessation of the A Loan Coupon would effectively mean that the Council stops receiving a combined net monthly interest for College Green and Barclay Road Annex.
3.5.11 A temporary freeze of the A Loan Coupon will need to have an agreed commencement and completion date, fully documented by reference to the appropriate agreements. Officers have recommended that the Executive Director of Planning and Environment in consultation with the Council Secretary and Solicitor, be given executive delegated authority to undertake relevant 289 steps and conclude any agreements necessary to implement a temporary freeze.
3.5.12 Officers will ensure that the proposed variations do not result in any degradation of John Laing’s obligations to progress the Readiness for Development Criteria for the site. CCURV will continue to work in partnership with the Council in the Fair Field masterplanning process and to bring forward a revised CCURV Business Plan for the development site that sets out clear development timelines. The business plan will fully consider the most opportune market conditions for a redevelopment that meets with both the masterplan and CCURV’s aspirations for the redevelopment of this key metropolitan town centre site.
3.6 Tamworth Annex
3.6.1 Tamworth Annex is occupied by South London and Maudsley NHS Trust (SLAM) who operate mental health services from the building. SLAM occupies the building as part of a wider agreement between the Council and SLAM to share occupancy at agreed locations.
3.6.2 At the time that Tamworth Annex was committed to CCURV it was considered that the accommodation was unsuitable for its purpose in delivering healthcare services. It has, however, become clear that this is not the case and to progress with a redevelopment of Tamworth Annex thereby decanting SLAM to an alternative property could be detrimental to the services being delivered from the facility. Officers therefore recommend that Rees House and Morland Lodge substitute Tamworth Annex subject to the site being brought forward through the Council’s disposal process and demonstration of best value consideration.
3.6.3 Rees House is located on Morland Road and is in use as Council offices, whilst the building to the rear, Morland Lodge, has been historically been used as a care home and by the Council’s community mental health team for older adults. Both buildings occupy a single site with an area of 0.43ha/1.06 acres (Tamworth Annex has an area of 0.24ha/0.58 acres). Rees House and Morland Lodge now only accommodates around 70 Council and NHS staff. The site historically accommodated over 200 staff and is therefore largely vacant and not required for the Council’s future accommodation needs. The remaining Joint Learning Disability Team staff would require decant to an alternative location or locations and the Council’s Corporate Accommodation team are investigating this.
3.6.4 In order to ascertain the CCURV transfer value for Rees House and Morland Lodge, the site would need to be formally offered to CCURV who would then consider its value and make an offer to the Council. Any offer would be subject to demonstrating that it achieves best value for the Council.
3.6.5 As with the other Initial Development Properties, the inclusion of Rees House and Morland Lodge would be subject to the agreement of a CCURV Business Plan which will incorporate Readiness for Development Criteria such as gaining planning approval, and until completion of these, the site would remain in Council ownership.
290 3.6.6 There may be an option to extend the site to include 6 Morland Road which adjoins the site and is in use as a health care clinic, however this site is not in Council ownership and is vested with the Secretary of State for Health, therefore its inclusion would need to be negotiated and would be progressed by CCURV.
3.6.7 Officers request that the Executive Director of Planning and Environment in consultation with the Council Secretary and Solicitor, be given executive delegated authority to undertake relevant steps and conclude any agreements necessary to remove Tamworth Annex from the CCURV Initial Development Properties and replace it with Rees House and Morland Lodge at best consideration.
3.7 Future Sites: Brigstock Manor, Cheriton House, Coleby Court and Stroud Green Lodge
3.7.1 In January 2008 the Homes for the Future (New4Old) Cabinet Committee agreed that the former care home sites of Brigstock Manor, Cheriton House, Coleby Court and Stroud Green Lodge be included within the Urban Regeneration Vehicle (reference A5/08 refers).
3.7.2 Under the CCURV Members Agreement Clause 13.1, CCURV has the first opportunity for site acquisition of Council sites that have been declared surplus to Council requirements subject to Section 123 of the Local Government Act 1972 best consideration test. On this basis, three of the sites, Brigstock Manor, Cheriton House and Stroud Green Lodge will now be formally offered to CCURV.
3.7.3 It is noted that Coleby Court is currently being considered for an alternative Council use; if the site is declared surplus to Council requirements, it is intended that it will also be offered to CCURV subject to Section 123 of the Local Government Act 1972 best consideration test.
3.7.4 The disposal of any of the four sites to CCURV is subject to the Council being satisfied that it is obtaining the best consideration and that if CCURV meet the best consideration test and wish to acquire the sites, the offer made by CCURV will be presented back to Corporate Services Committee for consideration and approval.
3.8 Freedom of Information/Data Protection Considerations
3.8.1 Information relating to this paper, requested under the Freedom of Information Act, held internally or supplied by external organisations, will be accessible subject to legal advice as to its commercial confidentiality, or other applicable exemption, and whether or not it is in the public interest to do so.
4. CONSULTATION
4.1 This paper and the recommendations contained within it has been prepared in consultation with Council officers from departments and teams including Planning and Environment, Corporate Resources and Customer Services 291 (finance) and the Executive Office (legal and democratic services).
5 FINANCIAL AND RISK ASSESSMENT CONSIDERATIONS
5.1 Financial and risk considerations are contained in the part B report.
Approved by: Katharine Eberhart, Head of Finance PRC and Central Departments on behalf of the Director of Finance
6. COMMENTS OF THE COUNCIL SOLICITOR AND MONITORING OFFICER
6.1 The Solicitor to the Council comments that, as set out in this report, any land disposals to CCURV will need to be in compliance with section 123 of the Local Government Act 1972. Advice and support will be provided by the Council’s Corporate Legal Team throughout the process and in relation to the recommended amendments to the contract documentation set out in this report.
6.2 (Approved by Sean Murphy, Corporate Solicitor, on behalf of the Council Solicitor and Director of Democratic and Legal Services).
7. HUMAN RESOURCES IMPACT
7.1 There is no Human Resources impact arising from this paper.
7.2 (Approved by: Chris Baldwin, HR Business Partner on behalf of the Director of Human Resources & Organisational Development)
8. EQUALITIES IMPACT ASSESSMENT (EqIA)
8.1 An EqIA has not been undertaken for the proposals set out in this report however EqIAs are undertaken for CCURV projects at the appropriate stage in project development.
9. ENVIRONMENTAL IMPACT
9.1 There are no environmental impacts arising from this paper however it is noted that CCURV has committed to ensure that environmental and sustainability objectives are achieved in accordance with the Council’s environmental policies. It is also participating in the environmental and climate partnership and working with the Council to formulate a district energy strategy.
10. CRIME AND DISORDER REDUCTION IMPACT
10.1 There are no crime and disorder reduction impacts arising from this paper
CONTACT OFFICER: Catherine Radziwonik, Development Manager
BACKGROUND DOCUMENTS: none
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