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CABINET REPORT Development of an International Mountain Bike

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CABINET REPORT Development of an International Mountain Bike MERTHYR TYDFIL COUNTY BOROUGH COUNCIL Civic Centre, Castle Street, Merthyr Tydfil, CF47 8AN Main Tel: 01685 725000 www.merthyr.gov.uk CABINET REPORT Date Written 16 th September 2010 Report Author Alyn Owen Service Area Economic Development Committee Division Strategic Committee Date 29 th September 2010 To: Chairman, Ladies and Gentlemen Development of an International Mountain Bike Centre at Gethin Woodland PURPOSE OF THE REPORT: To seek Cabinet Approval to participate as a Regional Partner in the delivery of a SEWEF led partnership project to create an International Mountain Bike Centre at Gethin Woodland Park. 1.0 Introduction and Background 1.1 In 2008 the South East Wales Economic Forum coordinated a meeting of key partners with an interest in off-road cycling to discuss a proposal to further develop the market across South Wales and to work in partnership to create a more coherent product for the visitor. From this initial meeting a Steering Group was established and a feasibility study was commissioned to look into the possibilities for developing off-road cycling in South Wales. This study looked at the current offering, new possibilities, the competition, market trends, visitor trends, and from this created a clear picture of how South Wales can develop to become one of the UK leading off- road cycling destinations. 1.2 Off-road cycling, predominantly mountain biking is one of the few well established forms of activity tourism in the South Wales Valleys, and this project aims to take that current offering and expand it to create a World class Centre of Excellence for off- road cycling. 1.3 South Wales has a great reputation for off-road cycling, but research has found that the existing product suffers from significant competitive pressures particularly from new investments and product offerings in the rest of the United Kingdom. This project will both address this issue and create the critical mass necessary to provide the most exciting and accessible off-road cycle trail network in the UK. 2.0 Development of a Regional Project Proposal 2.1 The detailed work on the proposals was delegated to a working group whose membership include representation from Neath Port Talbot CBC (Margam Park and Afan Forest Park representatives), Merthyr Tydfil CBC, Caerphilly CBC, Forestry Commission Wales and South East Wales Economic Forum. 2.2 From the work of this group, an application was developed to deliver a £5,020,000 project. The application was submitted to Visit Wales in November 2009 by the partner organizations. The proposal was based on the creation of the following package across the Region: • The best all-round, purpose built trail centre in the UK at Afan Forest Park and refresh and extend the product offering at the gateway to the Valleys site at Cwmcarn • A world-leading commercial bike park in the Heads of the Valley area at Gethin Woods. • A world class mountain bike events centre in Margam Park, Neath Port Talbot; • A coherent “brand” and an integrated marketing strategy and plan, supported by a programme of events. The aim of this package is to: • Integrate the regional centres with local centres, low level linear and circular cycling routes and skills areas, including cross-valley routes. • Work with partners to develop innovative ways of involving the local populace e.g. Kids Clubs, training of local leaders and providing free bike hire. • Encourage participation in other activities e.g. walking, orienteering, etc. by providing additional infrastructure. 3.0 Structure of the Funding Application and Regional Partnership 3.1 In November 2008 Visit Wales submitted a combined TMF application to WAG for both the Sustainable Tourism and Coastal Tourism projects for approximately £8m. Following the application’s assessment WAG requested that Visit Wales provided additional information to support their bid. This revised application was then considered in the TMF panel in March 2009, however unfortunately the application was unsuccessful. 3.2 Following this decision it was decided Visit Wales would have to conduct a project review if the Sustainable Tourism bid was to go ahead. This review resulted in a range of options being agreed on how to progress with the application. The options were presented to WEFO on the 19 th of May 2009. Following these discussions WEFO and Visit Wales have agreed a draft proposal of a revised total project cost of £17.5m with £14.75m being allocated towards the ‘Centres of Excellence’ concept. However due to the unsuccessful application for TMF project applicants would need to find 52% of the total project cost as match funding. 3.3 The application for the project was there made to Visit Wales on a ‘third party’ basis.The management of the programme proposal is based on Joint Sponsor Partnership between the three Valleys Authorities of Merthyr, Caerphilly, Neath and Port Talbot CBC’s, Forestry Commission Wales and SEWEF. Neath Port Talbot CBC will have the role of Lead Sponsor and will draw the project finance down from Visit Wales. The Programme will be delivered on a ‘Federal’ basis, in which all of the three authorities, including Merthyr, will administer the delivery of grant funded for projects in their own Local Authority areas. Each Authority will have individual prescribed targets and budgets, the amalgamation of which provides the regional financial expenditure and outputs of the Programme. All of this has been approved within the Business Plan and Delivery Profile, as part of the application to Visit Wales, and approved by the Welsh European Funding Office. 3.4 All financial, contractual and operational arrangements have been drawn in the form of a Service Level Agreement produced by Neath Port Talbot CBC, to be agreed and signed by all partners. This agreement has been shared with the Legal Department who have advised that it is acceptable and fit for purpose. 3.5 In the Merthyr Tydfil component of the project, all programme finance will be passed on, with the Authority taking no responsibility for direct project delivery. 4.0 The Gethin International Bike Centre 4.1 The Merthyr Tydfil element of the wider South East Wales proposal is based on the following objectives: • A New Commercial Mountain bike centre to service the visitors and be the business premises of the operator of the centre. • Development of existing car park to service present users and new commercial bike business. • Creation of cross country trails • Attraction of ~£500,000 of private sector funding from a commercial operator to run centre and develop: • Creation of down hill / Freeride “Bike Park” with several runs • Development of infrastructure to service uplift for “Bike Park”. • The total budget for this scheme is £2,117,000. 4.2 A paper has been produced by the Forestry Commission that sets out the Governance options available for the Gethin Mountain Bike Centre (GMBC) project by the project partners: Merthyr Tydfil CBC (MTCBC) and Forestry Commission Wales (FCW). 4.3 Partner Contributions to the Gethin project will be as follows: • MTCBC will provided elements of match funding for this project from its HOV HARP funding allocation in 2011/2012, 2012/2013, 2013/2014. • FCW is facilitating this project by making Welsh Assembly woodlands at Gethin available for this development. • Both partners bring other key skills and competencies to this partnership – procurement, management of structural funds, management of Capital infrastructure projects, management of commercial recreation and management of mountain bike provision. 5.0 Timescales and Delivery Options 5.1 All aspects of the centre of excellence bid must be delivered by the end of December 2013. Annex one ( which can be found in the Members Library ) contains a project plan produced for illustrative purposes to give an idea of the likely timeline for the physical delivery of the project. This options paper aims to identify potential governance options for the project by the partners, 8 options have been identified and a SWOT analysis undertaken for each of the options. The purpose of the paper is to begin discussions between FCW and MTCBC on the best-fit option to deliver the GMBC project. Further options would be welcomed from MTCBC. 5.2 Before the GMBC project can become a “live” project, the partners must decide on an option and establish the formal documentation to support the chosen option whether Lease, License, Service Level Agreement, Contract or Partnership. 5.3 In all options outlined in the paper there is a presumption that GMBC will be operated by a tenant running a commercial mountain bike business. The tenant receiving income from the visitor centre, charges to use the trails, charges to use the uplift service and car park charges for non- biking visitors. The tenant meeting all maintenance costs of the centre, the trails and indemnifying the partners against claims from users. This accords with the recommendations of the Tourism Resource Companies feasibility study, which under-pinned in the Centre of Excellence bid - the need for any new centre to be self-financing and commercially focussed. It also needs to be noted that all options involve a substantial investment by a private sector partner- any commercial rent received would have to reflect “consideration of capital” by the private investor over the lease term. 6.0 Preferred Delivery Option 6.1 FCW enters into an agreement with MTCBC, as the project funding conduit for the Merthyr project element, to license a commercial centre from the site for a period of years. FCW run an expression of interest to the private sector to offer a development lease for the whole project. The successful bidder is responsible for delivering all aspects of the project, investing their own funds and drawing down funding form MTCBC as the project stages are completed.
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