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 () 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 () 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 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 opened in 2007 providing a direct foot and cycle bridge to the International Financial Services District on the north bank of the . 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.

6.7 The subjects, shown on the attached plan, shall be used solely for accommodating a mixed use development and for no other use whatsoever without the prior written consent from the Seller which shall be granted at their absolute discretion.

6.8 The Purchaser shall be responsible for the Seller’s reasonable legal expenses in connection with this transaction subject to a maximum of £10,000 plus Value Added Tax, together with City Property’s fee of £2,000, plus Value Added Tax.

6.9 The Purchaser will not be entitled to assign in whole or in part its rights under the contract of sale without the Seller’s consent which consent shall not be unreasonably withheld to an assignation of the whole contract of sale to a reputable, respectable and responsible third party assignee which is demonstrably capable of paying the price and carrying out and completing the Proposed Development.

6.10 All third party determination in the contract of sale shall be by an independent expert and not by way of arbitration

6.11 In the event that the Purchaser instructs ground investigation works, site surveys, habitat surveys, EIA surveys or any other such survey or report, prior to the date of entry then the costs of such works/surveys shall be borne by the Purchaser. For the avoidance of doubt the seller shall not reimburse the purchaser for any such costs whatsoever whether the sale completes or not.

6.12 The Executive Director of Regeneration and the Economy, in consultation with the Director of Governance and Solicitor to the Council shall be authorised to conclude all other matters pertaining to the disposal of the subjects and to enter into the necessary legal agreements on terms which are in the best interest of the Council.

6.13 The transaction is suspensive on the Purchaser receiving a satisfactory report in relation to the Seller’s title.

6.14 The transaction is suspensive on the Purchaser obtaining Masterplan Consent and AMSC approval for their proposed mixed use development in a form satisfactory for the Purchaser’s purposes.

6.15 The suspensive conditions at 6.13 and 6.15 operate entirely for the benefit of the Purchaser who will be entitled to waive them at their option. In the event that the Purchaser has not purified or waived the suspensive conditions by 31 December 2018 either party may resile.

6.16 In the event that the Purchaser dispones the subjects prior to the commencement of proposed development to the subjects (as authorised by PPiP Ref 16/02357/DC a copy of which is annexed and subscribed as relative hereto) then the Purchaser shall pay to the Seller 100% of all sales proceeds in excess of One Million Three Hundred and Seventeen Thousand Five Hundred Pounds (£1,317,500) subject to all reasonable marketing costs incurred by the Purchaser during the sale process.

7 Policy and Resource Implications

Resource Implications:

Financial: The proposal will generate a capital receipt for the Council.

Legal Issues: To conclude the appropriate legal agreements.

Personnel: No direct personnel implications.

Procurement: No relevant procurement issues.

Council A Thriving Economy: Strategic Plan: A resilient, growing and diverse city economy where businesses thrive.

Disposal of these sites will facilitate the redevelopment of a major strategic site adjacent to the river and bring forward significant inward investment to the city, creating new employment opportunities and assisting in the growth of the regional economy. Equality Impacts:

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

What are the No equality impacts identified. potential equality impacts as a result of this report?

Sustainability Impacts:

Environmental: The sale of the subjects will allow the development of a strategic redevelopment opportunity. A large area of vacant and derelict land along the Riverside may now be redeveloped starting the transformation of a long standing regeneration priority area.

Social: The disposal of the subject will provide the Community with additional jobs as the business grows.

Economic: Potential for job creation during construction and following completion.

Common The subjects are not considered to form part of the Council’s Good: common good.

For property to form part of the common good it requires to have been within the ownership of a burgh. Burghs were abolished as at 16 May 1975 in terms of section 1 of The Local Government (Scotland) Act 1973. The Act enables a local authority to appropriate land into the common good but not to acquire it for a common good purpose. The subjects comprise three plots and were acquired as follows:

(1) Plot 1 (shown bound in black and dotted on the attached plan) - In 1985 by the Council’s statutory predecessor, Glasgow District Council. The subjects are not on the list of common good assets. There are no other relevant factors to suggest that the subjects have been appropriated to form part of the common good of the Council. (2) Plot 2 (shown bound in black and hatched on the attached plan) - In 1987 by the Council’s statutory predecessor, Strathclyde Regional Council. There are no other relevant factors to suggest that the subjects have been appropriated to form part of the common good of the Council. (3) Plot 3 (shown bound in black and shaded grey on the attached plan) - In 2000 by the Council. There are no other relevant factors to suggest that the subjects have been appropriated to form part of the common good of the Council.

Privacy and Non Disclosure Agreements (NDA’s) have been signed by Data Protection Officers of the City Council. No Privacy and Data Protection impacts: impacts identified.

8 Recommendations:

It is recommended that Committee:

1. Notes the contents of this report;

2. Approves 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. Authorises 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.