Strategy Committee 24 April 2018 Asset Management Plan – Property Disposal List

Appendix 1 -Not for publication by virtue of Paragraph 3 of Part 1 of Schedule 12a of the Local Government Act 1972, as amended. The public interest in maintaining the exemption outweighs the public interest in disclosing it. For Decision

Portfolio Holder Councillor John Russell – Environmental Protection and Assets Councillor Timothy Yarker – Housing

Senior Leadership Team Contact: M Hamilton,Strategic Director

Report Author: Greg Northcote, Estates Manager

Statutory Authority Legal power to dispose of the land – s123 (2) and s 128(1) Local Government Act 1972 and Circular 06/03 Local Government Act 1972 General Disposal Consent () 2003.

Purpose of Report

1.1 To update members of progress in respect of the agreed work program listed in the Confidential Appendix 1.

1.2 To seek instructions to progress site preparation, marketing and other options.

Officer Recommendations

2 a) To note progress reported in respect of the agreed work program listed in the Confidential Appendix1. b) To approve the recommended disposals at para 8 below. c) To authorise officers to dispose of assets listed in para 9 below if satisfactory terms for transfer to Town and Parish Councils are not agreed. d) To approve the renovation and leasing of Nos 2 and 3 King Square, by the Councils Housing Options Team. e) To either authorise officers to dispose of the freehold interest in The Grove in Bridport by open marketing the property subject to the existing lease or to transfer the property to the Council’s new Trading Company at Market Value to progress its conversion to create new housing for lease to generate revenue for the Council. f) To authorise officers to explore the potential of a long lease surrender of the Youth Club premises at Lubbecke Way and if terms are agreed to either authorise officers to dispose of the freehold interest or to transfer the property to the Council’s new Trading Company at Market Value to progress its conversion to create new housing for lease to generate revenue for the Council. g) To authorise officers to progress development and disposal proposals identified in the attached Confidential Appendix 1 with PSP. To conclude terms for disposal of the assets where suitable for disposal via PSP West LLP, with the LLP and to revert back to members for authority to dispose.

Reason for Decision

3 To progress the delivery of the overall objectives of the Asset Management Plan by progressing elements of the work program identified in the Confidential Appendix 1.

Background and Reason Decision Needed

4 Officers brought a Report to the former Executive Committee on 25th April 2017 seeking approval in principle to progress a disposal program of assets listed in a Confidential Appendix 1. The Report authorised the Strategic Director in consultation with the Assets and Finance Portfolio Holder to progress the work program through the use of external consultants and agents as required including use of the PSP LLP Partnership Board where appropriate. Officers agreed to provide periodic updates and now require authority to progress marketing proposals identified below.

5 Officers have since brought two further reports to the Strategy Committee on 14th December 2017 seeking authority to progress the transfer of a range of assets associated with the delivery of discretionary services to Towns and Borough Councils and to progress the transfer of a range of assets specifically to Bridport Town Council. These Reports addressed some assets listed in the original report above and the progress of asset transfers in respect of these assets will be reported separately.

6 A range of assets have also been allocated for progress through PSP West Dorset LLP and progress will be reported separately.

7 The Confidential Appendix 1 contains a brief progress statement identifying the way forward and financial predictions in respect of the remaining assets.

Assets for Disposal

8 Officers recommend that the following assets are marketed immediately and progress as detailed below. Details of likely sale proceeds are in the Confidential Appendix 1 with Location Plans in Appendix 2.

1) Land at St Swithins Road, Bridport – to authorise officers to enter into a joint disposal agreement with the adjacent landowner whereby the Council will receive a substantial capital sum for its roadside verge land that provides access and therefore unlocks a development site for residential housing of approximately 20 units.

2) Strip of land at Coldharbour Industrial Estate, – to authorise officers to dispose of the freehold interest in this parcel of vacant undeveloped land at the edge of the estate.

3) Land at Boldacre Alton Pancras with three garages - to authorise officers to dispose of the freehold interest in this property subject to existing licences.

4) Strip of land near West Street, Bridport – to authorise officers to dispose of the freehold interest in this property to adjacent landowner who is a special purchaser or sell it by auction if terms are not agreed.

5) Land at Meadow Close, with six garages – to authorise officers to dispose of the freehold interest in this property subject to existing leases with or without adjacent land owned by the Chickerell Town Council and to inform the Town Council of the intention to market before progressing.

6) Land Adj 1 Council House (Ex Play Area) Melcombe Horsey – to authorise officers to dispose of the freehold interest in this property conditional on planning.

7) Land at Coles Lane, Yetminster - to authorise officers to dispose of the freehold interest in this property but approach Magna Housing Association first to establish their interest in acquiring it or jointly marketing with their adjacent land.

8) Dotcom Office 1 & 2, Buckland Newton - to authorise officers to dispose of the freehold interest in this property as a whole or in two lots. The pair of vacant two storey semi-detached offices with licensed parking spaces would lend themselves to being converted into one bedroom houses subject to planning permission. To maximise value an outstanding issue with parking on a shared forecourt requires resolution.

9) All Saints Church, Dorchester – to authorise officers to negotiate a sale of the church to the current commercial tenant rather than continue to retain the asset.

Potential Asset Transfers to Town and Parish Councils

9 A range of assets are under consideration for transfer to towns and parishes. Only a few were listed in the previous report. In the event that satisfactory terms are not agreed, officers recommend that the following assets are openly marketed (being surplus to Council requirements and being unsuitable assets for retention as investments). Location Plans are in the Appendix 2.

1) George Street Shop, Garages and Former HM Store Gushes Yard, West Bay

2) Seagull’s Restaurant, West Bay (not on plans)

3) Car Park / Picnic Area at Lane, Maiden Newton

4) Grazing land at West Cliff, West Bay

5) Plantation at Victoria Grove, Bridport

6) Land adj entrance to Gundry`s, Bridport

7) Land at Huntsmead/Clanfield, Sherborne

Provision of housing to let

2 and 3 King Square, Bridport

10 This pair of semi-detached two storey houses located off the East Street Car Park were formerly leased to Churches Housing Association. Officers have negotiated the voluntary surrender of the leases at the Housing Association’s request. So the Council has vacant possession. Officers have sought advice from local agents in respect of their immediate disposal. Their advice is in the Confidential Appendix 1. The houses require refurbishment but are readily saleable.

11 The Council can however licence out the houses and take a revenue, leaving the opportunity to realise a capital receipt in future if required. These centrally situated properties are suitable as temporary housing for those looking to secure housing from the Housing Register or as Emergency Housing. The Head of Housing feels that by using these homes as short term temporary accommodation occupied under licence, the council can both reduce the cost of placing households into bed and breakfast whilst generating a significant income stream. New legislation, in the form of the Homelessness Reduction Act, will be implemented in April 2018, which is likely to ensure that demand for short term temporary accommodation remains high for the foreseeable future.

12 The Housing Options team will easily be able to find people to live in these homes, occupying them under license prior to their being found longer term housing. While it might alternatively be possible to lease these houses to a housing association or other housing provider, who could then let them for longer periods under more conventional tenancies, this would be less attractive financially to the council as this would do nothing to reduce our use of emergency accommodation such as bed and breakfast. Should these two homes no longer be required for licensing or letting, they could then be sold.

13 Our Housing Options Team advise that the estimated cost of renovating both houses to a decent letting standard is around £34,000. Officers propose that the refurbishment of each property is funded from the Housing Initiatives Budget, subject to the separate approval of Strategy Committee. Once ready for letting, the properties could on average generate a net return of £9,105 pa each. In addition by bringing the houses back into use from being long term empty homes, New Homes Bonus will be payable, which is anticipated to bring in £9,200 over two years.

14 This could be viewed as a reasonably short term investment giving a return over two years of about £27,500 so on average a 3.4% return per annum before costs of external maintenance and insurance. Although quite modest and likely to be 2% thereafter, this proposal does provide two units of residential accommodation for temporary or emergency housing for which there is significant demand.

15 The Grove, Bridport –

This is a grade II listed building currently leased as a retail unit but formerly leased as offices where the current excluded lease expires shortly. The property could lend itself to residential conversion or a range of commercial uses subject to planning consent. The conversion opportunity and likely sale outcome is supplied in the Confidential Appendix 1. There are several ways forward including open marketing the property subject to the existing lease. The marketing would be unconditional giving the purchaser the opportunity to seek planning consent for a residential conversion themselves or an alternative viable commercial use. This is preferable to seeking detailed consent for the listed building in advance of marketing.

16 Alternatively the property could be transferred to the Council’s new Trading Company at Market Value to progress its conversion to create new housing for lease to generate revenue for the Council.

Lubbecke Way Youth Club

17 The Council owns the freehold interest and leases the whole site to the Youth Club. Officers understand that the Youth Club may respond to an approach to agree surrender terms. If terms can be agreed the Council could progress the disposal or transfer to the Council’s new Trading Company at Market Value for provision of housing to let.

Assets progressing to disposal through PSP West Dorset LLP

18 Finally there are number of assets listed in the Confidential Appendix 1 that have been identified for disposal through PSP West Dorset LLP. The basis for disposal in respect of most of such assets is that the Council will grant an option to the LLP, the exercise of which is conditional on the LLP securing planning consent for development. The grant of the option constitutes a disposal and the price payable by the LLP if the option is exercised, which is fixed when the option is granted, is always established by independent valuation or in instances where there is no conflict of interest, a valuation undertaken jointly with the LLP and PSP.

19 Additionally and the rationale behind disposal of assets via the LLP is that the uplift in value obtained by the input of skill and expertise by the Council’s partner in the LLP in order to obtain planning consent and otherwise bring assets to the market advantageously, will be shared between the Council and PSP (its partner in the LLP) in a pre-determined individual profit share arrangement. Taken collectively the price receivable by the Council for the asset and the profit share should secure best consideration for the Council within the meaning of section 123 of the Local Government Act 1972.

20 Officers will progress and conclude negotiations for the disposal of assets listed in the Confidential Appendix 1 but report outcomes for disposal decision to members.

Implications

Corporate Plan

21 Secure initiatives that will increase the supply of housing and affordable homes that are built and reduce the number of empty properties

22 Ensure that people who are vulnerable or in hardship are supported, feel safe and more able to live independently

23 Maximise income through effective asset management and trading activities and realise the significant savings targets that are set out in the Medium Term Financial Plan

24 Work with our partners across Dorset to reform and shape the future of local government to ensure that it is sustainable

Financial

25 Adopting the recommendations in this report will generate capital receipts and will increase net revenues. Costs associated with these proposals will be funded from the Housing Initiatives Budget, from existing budgets especially if transfers are cost neutral, and from capital receipts.

26 Transfers proposed at less than best consideration are permitted within the meaning of Section 123 (2) A of the Local Government Act 1972 in defined specified circumstances:

a) the local authority considers that the purpose for which the land is to be disposed is likely to contribute to the achievement of any one or more of the following objects in respect of the whole or any part of its area, or of all or any persons resident or present in its area;

i) the promotion or improvement of economic well-being; ii) the promotion or improvement of social well-being; iii) the promotion or improvement of environmental well-being; and

b) the difference between the unrestricted value of the land to be disposed of and the consideration for the disposal does not exceed £2,000,000 (two million pounds). Equalities

27 The recommendations do not have any negative impact on equalities but provision of new emergency and temporary housing stock may be beneficial.

Environmental

28 The recommendations will result in transfers of assets to town and parish councils on a sustainable basis. Where assets are disposed of, any future development will require planning consent where appropriate environmental protections and improvements will be considered.

Economic Development

29 Dotcom Office 1 & 2, Buckland Newton were originally developed as offices for letting to local businesses and while they have been occupied for periods more recently the units have stood vacant for several years and attracted only one enquiry last year (for only one unit and the net revenue generated would have been less than the housing recommendation proposes).

Risk Management (including Health & Safety)

30 The risks of inaction outweigh the risks with the recommended course of action that will reduce future liabilities.

Human Resources

31 There will be resource requirements for delivery of the recommendations for staff in Housing, Estates and Legal Teams.

Consultation and Engagement

32 Portfolio Holders have been advised of the proposals and are advised periodically of progress. Members of the PSP West Dorset LLP are briefed on all matters on a regular basis. Representatives of Town and Parish Councils are to be directly approached regarding asset transfer opportunities. Local Members will be consulted ahead of any proposed disposals or transfers.

Appendices

33 Confidential Appendix 1: Asset Management Plan – Property Disposal List

34 Appendix 2: Location Plans

Background Papers

35 Executive Committee 25 April 2017 Property Asset Management Plan – Disposal List 36 Strategy Committee 14th December 2017 Transfer of Assets to Bridport Town Council 37 Strategy Committee 14th December 2017 Transfer of Services/Assets

Footnote

Issues relating to financial, environmental, economic and equalities implications have been considered and any information relevant to the decision is included within the report.

Report Author: Greg Northcote Estates Manager Telephone: 01305-838268 Email: [email protected]