Glasgow City Council 14Th June 2018
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Item 3 Glasgow City Council 14th June 2018 Contracts and Property Committee Joint Report by Executive Director of Regeneration and the Economy and Managing Director of City Property (Glasgow) LLP Contact: Richard Brown Ext 76000/Pauline Barclay Ext 76166 PROPOSED OFF-MARKET DISPOSAL OF THREE (3) SITES AT TRADESTON, GLASGOW Purpose of Report: To seek Committee approval of the off-market disposal of three (3) sites within the Tradeston area to Drum Property Group Limited. Recommendations: That Committee: 1. Notes the contents of this report; 2. Approve the off-market disposal of land in the Tradeston area to Drum Property Group Limited to the terms and conditions as outlined in the report; and 3. Authorise the Executive Director of Regeneration and the Economy in consultation with the Managing Director of City Property LLP and the Director of Governance and Solicitor to the Council to progress the sale of the three (3) sites within the Tradeston area. Ward No(s): 5 (Govan) Citywide: Local member(s) advised: Yes No consulted: Yes No 1. Holding Account 1.1 Plot 1 - Former Euro Yachts site – Development and Regeneration Services (Former Planning Account). 1.2 Plot 2 - Clyde Place Road Solum – Land and Environmental Services. 1.3 Plot 3 - 38 Clyde Place – Social Work Services. 2 Description 2.1 Plot 1 the area shown bound in black and dotted on the attached plan is a cleared site which extends to some 1,699 square metres (0.42 acres) or thereby, it is adjacent to a flatted residential area and the Tradeston Pedestrian/Cycle Bridge. 2.2 Plot 2 is shown bound in black and hatched on the attached plan and forms part of the public footpath and road, both of which have been adopted, it extends to some 125 square metres (0.03 acres). 2.3 Plot 3 shown bound in black and shaded grey on the attached plan is currently occupied by Clyde Place Assessment Centre, a Social Work property. The building is a four storey category B listed property, of sandstone construction, it is bound by Clyde Place to the north and Centre Street to the east, there is a carpark to the west of the property which has a substation on site. The site extends to some 1,047 square metres (0.258 acre) or thereby. 2.4 As part of the Council’s homelessness strategy, proposals were approved by the City Administration Committee on 31 May 2018 to relocate the services currently operating out of Clyde Place Assessment Centre to Rodney Street. Actions will now be taken to have the services relocated by 30 September 2018. 3 Planning 3.1 The subject sites are designated in the Glasgow City Development Plan as Housing Land Supply with a capacity of 376 units for the overall Tradeston area of 3.36 hectares. The Tradeston front three blocks are located within the City Centre and are identified as an area of strategic economic investment. 4. Background 4.1 The Tradeston area of the city has been a long standing regeneration priority for Glasgow. The area suffered significantly from post-industrial decline. Despite recent public investment in strategic infrastructure and effectively being located on the opposite bank of the river from Glasgow’s International Financial Services District, the area remains dormant in regeneration terms. This is due in part to the economic crash around 2007, the constraints of multiple ownership and the requirement of significant up-front development funding to enable redevelopment to be undertaken at a scale commensurate with the location thereby necessitating end user occupation. 4.2 Following the production of the Tradeston Development Strategy in 2002 a number of developers expressed interest and actively pursued options and legal agreements with many of the property owners in the Local Development Strategy area. Predictably, particular effort was focused on the three front street blocks fronting onto Clyde Place, reflecting its prominence in respect of the river frontage. 4.3 Following negotiations on 27 November 2003, the Development and Regeneration Services Committee authorised the Director of Development and Regeneration Services to enter into negotiations with Alburn Tradeston Limited (ATL), to enable draft terms to be agreed between both parties for the redevelopment of the front three street blocks at Tradeston. Finalised terms for a proposed Development Agreement between Glasgow City Council and ATL were reported to and approved by the Development and Regeneration Services (Property) Sub Committee on 5 May 2004. Subsequently a legally binding Development Agreement missive was entered into. For the avoidance of doubt the Development Agreement covered the entire front 3 blocks. 4.4 This strategy evolved and was further developed and updated by the City Council in partnership with ATL in terms of providing a context for the development site in question as well as the wider urban area encompassing the twelve block grid of Tradeston. The revised Tradeston Local Development Strategy 2005 was noted by Development and Regeneration Services Committee, in February 2005. 4.5 Subsequently planning permission was granted in August 2005 for a mixed-use scheme with the approved Alburn masterplan (ref: 04/02829/DC) supporting residential, shops, offices, restaurants and a creche with supporting infrastructure works. An amendment to this approved mixed use development was granted in December 2006 (ref: 06/03110/DC) increasing the overall number of residential units and altering the previously approved design and conditions. Following the financial collapse in 2007/08, the developer could not deliver the approved development and following considerable dialogue with the authority over a number of years, coupled with the continued economic uncertainty, the development agreement was formally terminated by mutual consent in 2013. 4.6 Following the economic crash the commitment and leadership shown by Glasgow City Council to kick-start the regeneration of the Tradeston district has been considerable. The Tradeston Bridge opened in 2007 providing a direct foot and cycle bridge to the International Financial Services District on the north bank of the River Clyde. This connection and associated public realm works greatly improves synergy with the City Centre and opens up Tradeston for regeneration. 4.7 Council Officers have maintained a continuous dialogue over recent years with various interested developers and have constantly advised them that the Council would welcome interest for regeneration proposals as and when they were in a position to demonstrate any significant agreement or control over property interest in these three blocks. 5 Current Proposal 5.1 Following recovery from the economic downturn the potential for investment in the area remains, and incrementally land assembly has been undertaken. The Council was approached by the Drum Property Group Limited in 2015 to ascertain whether the authority would support the redevelopment of the entire 3 blocks for a mixed use scheme comprising office, residential, commercial and public realm scheme. The entire site has a ‘City Centre’ designation as identified within the development plan. This has given a fresh impetus to delivering redevelopment of the area and Drum Property Group Limited lodged a Planning Permission In Principle (PPiP) application for a mixed-use development (including those sites in the Council’s ownership) in September 2016 (ref:16/02357/DC); now known as Buchanan Wharf. The application provided an opportunity to revisit the previous Alburn vision and permission in principle was granted by Glasgow City Council in January 2017. 5.2 The approved masterplan supports the principle of a comprehensive mixed use development with place-making central to the vision of delivering a vibrant new district. Approved land uses include offices, residential, hotel, serviced apartments, retail, bars, restaurants and a crèche. If realised this development will bring significant employment opportunities and new homes to the south bank with supporting infrastructure and development to create a successful district that is connected directly to the city centre. 5.3 Subject to acquisition of the subjects under discussion in this report, the commencement of the Buchanan Wharf development will fulfill a long standing aspiration of the City Council to kick-start the regeneration of Tradeston. When complete (currently estimated mid 2021) the development will present a generational opportunity to deliver approximately 1.25million sq.ft. of office, residential, retail and service space for named occupiers in an exemplar master planned environment. The development will be anchored by three major inward investment projects including two separate office developments of circa 500,000sq.ft and 210,000 sq.ft, accommodating around 7,000 staff and 310 Build to Rent residential units. The developer and their design team are now working towards submission of detailed application(s) to seek the approval of matters specified in conditions for the layout, design, development capacity and urban form. The developer is anticipating construction to commence in Q4 2018. 6 Terms and Conditions 6.1 Drum Property Group Limited (The Purchaser) is seeking to regenerate the Tradeston area and is proposing a mixed use development for the subjects. 6.2 The subject sites are not currently included in the Council’s Log of Opted to Tax Property. 6.3 The subjects are not considered to form part of the Council’s common good. 6.4 The subjects comprise the three plots shown on the enclosed plan, extending in total to some 0.28 hectares (0.70 acres) or thereby. The attached plan is for indicative purposes only. 6.5 The purchase price shall be One Million Three Hundred and Seventeen Thousand Five Hundred Pounds (£1,317,500), exclusive of Value Added Tax, if applicable, payable on the date of entry. 6.6 The Date of Entry will be the earlier of (a) 7 days after purification or waiver of the suspensive conditions at 5.10 and 5.11 below and (b) 31 December 2018.