International Sports Village
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CARDIFF COUNCIL CYNGOR CAERDYDD EXECUTIVE BUSINESS MEETING: 17 APRIL 2007 INTERNATIONAL SPORTS VILLAGE REPORT OF CORPORATE DIRECTOR AGENDA ITEM: 4 PORTFOLIO: CORPORATE Reason for this Report 1. This report is to seek the Executive’s approval of a competitive tender exercise in relation to disposal of the remaining part of the Sports Village retail site and to report recent progress at the site. Background 2. Phase 1 of the Sports Village development has been completed. The road infrastructure and utilities works are complete, and Morrisons and Toys R Us are trading. 50% of the receipt for the residential site has been received, with the balance due in April 2007, and the 50 metre pool is due for completion at the beginning of January 2008. Practical Completion for the temporary ice rink was achieved on 8 March 2007 and the temporary rink is fully operational, some snagging work to the temporary rink remains to be completed including repainting of the external walls which requires a period of continuous of dry weather. 3. Financial appraisals and construction programmes are being updated for Phase 2 of the development which includes the multi purpose arena, snow box, hotel, parking infrastructure and the Olympic standard canoe centre. Discussions have commenced between the Council and a potential operator in respect of the proposed new multi purpose Arena at the Sports Village. 4. Cardiff was contacted and asked to submit evidence by the Merits Committee of the House of Lords in respect of the debate in both Houses of Parliament concerning the Regional Casino, and a copy of Cardiff’s “Call for Evidence” submission to the House of Lords is attached as Appendix A. The House of Lords was critical of the recommendation by the Casino Advisory Panel to site the first regional casino in Manchester and the draft order containing the casino legislation was rejected by the House of Lords on Wednesday, 28 March 2007. In view of the inevitable delay to the casino legislation, appraisals are being developed which will allow phase 2 to proceed with or without a Regional Casino. Page 1 of 3 Issues 5. The Executive at its meeting on 14th November 2006 agreed that the Retail Agreement of 9 June 2004 (as varied) with Bride Hall Developments Limited be extended until 31 March 2007 and if Heads of Terms are achieved for a suitable disposal by that date then by a further three months from that date. 6. Bride Hall has failed to locate a retail operator for the last remaining site and therefore their agreement needs now to be formally terminated. Following this there is a need to dispose of the site to a new bidder, developer, or owner operator who can provide the necessary land receipt in order to realize a capital receipt to finance outstanding commitments on Phase 1 and to progress Phase 2 of the development at the Sports Village. The site needs to be advertised for sale on the open market for disposal by means of a competitive tender with the option of both an unconditional bid and a conditional bid which will then have to be assessed by the Council’s specialist advisers. Reasons for Recommendations 7. The outstanding retail receipt is required as quickly as possible so as to cross-subsidise the phase 2 leisure development Legal Implications 8. There are no legal implications arising in respect of this report. Financial Implications 9. The balance of the retail receipt is an important component in the funding of the outstanding commitments that remain from Phase 1 of the Waterfront development, which include:- • The 10 year subsidy to be paid to the pool operator, there is also a financial risk to the Council if actual NNDR payments are above the base figure in the operator’s business plan. • Payment of the outstanding residential overage due to Orion Land & Leisure Cardiff Ltd. • Commuted sums for the road network. A further report will be required when the updated financial appraisals and programmes are produced for phase 2 to demonstrate the financial implications for the Council and to approve any actions necessary. Page 2 of 3 RECOMMENDATIONS The Executive is recommended to agree that 1. the current Development Agreement with Bride Hall for the retail site at the International Sports Village be formally terminated. 2. the remainder of the retail site at the International Sports Village be advertised for disposal on the open market by means of a competitive tender with the option of both an unconditional bid and a conditional bid which will then have to be assessed by the Council’s specialist advisers. TOM MORGAN Corporate Director 2 April 2007 The following appendix is attached:- Appendix A – Casino - Call for Evidence Page 3 of 3 APPENDIX A Casino Call for Evidence – March 2007 Question 1 – Introduction. Briefly summarise the characteristics of your bid. Was it linked to a specific site or area, was it part of a wider development project or stand-alone? Answer - The Cardiff bid is a fundamental part of a wider project intended to deliver the regeneration of the most socially deprived areas of the City and to support sport and the healthy living agenda leading up to the 2012 Olympics. 1.1 The proposal for a Regional Casino made on behalf of Cardiff Council is a major regeneration of an urban brownfield site located at the Cardiff International Sports Village (CISV) directly alongside Cardiff Bay, in what is acknowledged as one of the most socially deprived areas of Wales and the UK. 1.2 Following the establishment by the Government of the former Cardiff Bay Development Corporation, large scale land reclamation was carried out in South Cardiff and the key to continue this regeneration into the west side of the Bay is the completion of an arc of entertainment extending from the Inner Harbour to the site of the Cardiff International Sports Village. 1.3 CISV is one of the most exciting sports, leisure and entertainment destinations in the UK which will include a world class swimming, snow and ice complex, Olympic-standard canoe course, luxury and family hotels, retail, restaurants and apartments, plus a multi-purpose arena suitable for a range of sporting events, concerts and conferences. Also included within the scheme is a major casino which has been a core element of the project since planning consent was granted for the facility back in 2003. 1.4 A regional casino will provide the ability and means to bring forward and deliver a host of facilities which would enable Cardiff to play a full and active role in supporting the 2012 Olympics as a training venue for home and visiting teams. Similarly it would reinforce Cardiff as a major visitor and tourist destination and have a significant impact on the city-region economy. 1.5 CISV will provide some 5,000 jobs, 1,500 directly related to the regional casino, 3.24m visitors per annum, 2.6m related to the regional casino, the operation of the regional casino and hotel would result in an additional £65m of GVA pa in the local economy and an additional £26m of GVA accruing from the construction phase. 1.6 Following a rigorous competitive tendering exercise, the Council with its development partner Orion Land & Leisure (Cardiff) Ltd and the Department of Enterprise, Innovation and Networks- DEIN (formerly the WDA), identified Aspers as the preferred operator for the Regional Casino. 1.7 The Council is fully committed to plans for a Regional Casino which was reinforced in 2005 by a decision by the Council that CISV was the only location supported for a Regional Casino. In March 2006 the Council’s Licensing Committee recommended that it would give favourable consideration to an application for a licence for a Regional Casino at CISV. Question 2 - Submitting your bid. Were the instructions on how to submit your application clear in terms of what was required and by when? Did you feel you had enough time to prepare your bid? Answer - Throughout the selection process there have been a number of instances where the CAP has failed to provide clear guidance in relation to the type and nature of the submission required. 2.1 Details of the opportunity to make proposals to the CAP for casinos were made available to the Council through its working relationship with DEIN, as no details were directly received from CAP in the initial period for receiving expressions of interest i.e. 31 st December 2006. (Clause 28- Final CAP Report). 2.2 The original guidance for the first submission required was clear in that it required concise and relevant evidence limited to not more than 20 pages to be returned by no late than 31 st March 2006. 2.3 Following CAP’s initial sifting exercise and the publication of the shortlist detailing the local authorities to be invited into the next stage; there was much confusion and uncertainty from both successful and unsuccessful applicants as to the next stage of the process, during which submitting authorities were given an opportunity to provide CAP with additional information. Only after repeated attempts to contact CAP was the issue resolved. However, even though additional information was submitted, CAP did not issue a revised ranking. Page 1 Casino Call for Evidence – March 2007 2.4 On 3 rd August 2006 the Council was asked to provide a written statement to CAP summarising the key merits of the proposal in no less than 1500 words by no later than 10 th August. Similarly CAP asked for the return of 16 additional specific questions plus supporting details originally by no later than Friday 18 th August.