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Demoliton of Greyfriars Complex

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Demoliton of Greyfriars Complex Appendices 0 CABINET REPORT Report Title Demolition of Greyfriars Complex AGENDA STATUS: PUBLIC Cabinet Meeting Date: 13 November 2013 Key Decision: YES Within Policy: YES Policy Document: YES Directorate: Regeneration Enterprise and Planning Accountable Cabinet Member: Cllr Tim Hadland Ward(s) Castle 1. Purpose 1.1 To seek authority to include within the capital programme for 2013/14 and 2014/15 the necessary capital funding to undertake the demolition of the Greyfriars Complex, as part of progressing the regeneration of Northampton Town Centre. 2. Recommendations 2.1 To support the demolition of the Greyfriars Complex to help bring forward the expansion of retail and other commercial uses on this land. 2.2 To approve the inclusion within the Council‟s capital programme for 2013/14 of £500,000 and of £3,500,000 in 2014/15 for the purposes of the demolition of the Greyfriars Complex, with works commencing within the current financial year. 2.3 To support continuing work with the relevant subsidiary of Legal & General plc and other parties, as appropriate, to bring forward re-development of this land and other land holdings in Northampton town centre. Jmd/committees/cabinet report template/05/11/13 2.4 That Cabinet delegates authority to the Chief Executive in consultation with the Cabinet Member for Regeneration, Enterprise and Planning to enter into a contract with the framework contractor. 3. Issues and Choices 3.1 Report Background 3.1.1 The Greyfriars complex was constructed in 1974 and occupies an island site situated between Lady‟s Lane to the north and Greyfriars to the South. At the back end of the site, north to south access roads run between Lady‟s Lane and Greyfriars. The complex comprises several distinct but interconnected elements. Access is obtained to the complex via a number of underpasses and from the Grosvenor Centre. 3.1.2 The bus station element comprises three levels, a pedestrian concourse linking with the adjacent Grosvenor Centre, a ground level where passengers board buses and a mezzanine level with bus operators offices, plant and drivers facilities. 3.1.3 A closed car park is situated above the mezzanine floor level and bus station area. This 300 space car park has been closed for a number of years due to health and safety problems which were not judged cost effective to resolve – given the intended demolition of the complex. 3.1.4 Above the car park are three storeys of office accommodation which has been unoccupied since the last tenant, Barclaycard, vacated the space in the 1990‟s. 3.1.5 This Council has worked for some time with the owners of the existing Grosvenor Centre (currently a company within the Legal & General plc group), to bring forward retail expansion in the Town Centre. This has included promoting new construction on the site of the present Greyfriars Complex. A Development Agreement was completed with Legal & General in 2009. 3.1.6 Key conditions to discharge have included (a) agreeing terms for the surrender of interests in the bus station and (b) working with bus operators and Northamptonshire County Council („NCC‟) to bring forward a new replacement bus interchange facility. The new North Gate Bus Station is under construction. This Station, together with enhanced bus facilities on the Drapery, will provide a modern hybrid interchange for bus passengers in Northampton. It is due to open for public use on 2 March 2014. Greyfriars bus station will then be completely vacated and the complex becomes wholly redundant. To prepare the site ready for redevelopment the building will need to be demolished and the area cleared. 3.1.7 There are a number of constraints that will have an effect upon the methodology under which the complex can be safely demolished. The factors, namely traffic control, composition of some structural elements, underpasses, fuel tanks, proximity of other properties and existing sewers will have an effect on time and cost. A detailed demolition strategy is currently being developed. Jmd/committees/cabinet report template/05/11/13 3.1.8 The demolition of the structure will enable substantive development proposals to be progressed with Legal & General. That process will be undertaken in parallel with the demolition work. 3.1.9 A report by GHK Consulting Ltd in October 2009, commissioned by the Council, identified the cost to refurbish the building including the offices, car park and bus station would be £30.8m. 3.2 Issues 3.2.1 Planning permission will be required to demolish the building. An application is intended to be made shortly. 3.2.2 The precise costs of demolition are being developed at present. The current estimate of cost makes a number of assumptions. Some of these may be subject to change in light of practical conditions. In order to meet the proposed programme, the procurement of the main contractor is intended to be via use of the “Scape” Framework. This is based upon an „open book‟ approach. It has been used successfully for the construction of the North Gate Bus Station. 3.2.3 The demolition process will require, in the need for diversions for transport, the phased closure of first, Lady‟s Lane, and then Greyfriars, resulting in disruption to drivers and bus routes. Discussions are underway with Northamptonshire Highways to examine diversions to minimise disruption. 3.2.4 The pedestrian routes below the bus station will be closed. Alternative safe routes for pedestrians will need to be provided. There are existing linkages of the Grosvenor Centre with the Greyfriars Complex, including existing fire escape routes. Satisfactory alternative arrangements would need to be agreed and put in place. 3.2.5 The building has incoming utility services which must be disconnected before any demolition can commence. The most significant of these are the two basement substations fed by a high voltage cable which also distributes power to the town centre. The cable must be diverted by Western Power along Greyfriars and Lady‟s Lane. 3.2.6 The extent of below ground works (i.e. removal of existing foundations) would affect the costs of demolition and have a corresponding positive or negative effect on the value of the land at the end of the exercise. 3.2.7 The terms of any negotiations with Legal and General concerning the cleared site will need to have regard to the existing Development Agreement. 3.3 Choices (Options) 3.3.1 The Council could choose to retain the existing Greyfriars structure in place, but secure it once wholly redundant in March 2014, pending a definitive redevelopment scheme being agreed and a planning permission being obtained for that. This would defer costs of demolition, but could expose the Jmd/committees/cabinet report template/05/11/13 Council to some revenue holding costs to keep the premises safe and secure. The closed property may be seen as an eyesore and give a negative impression of the Town to visitors. A later demolition of the redundant structure could cause delay to a new development programme, once the form of new construction and timing of that was crystallised. 3.3.2 The Council could choose to support the early demolition of the Greyfriars Complex and prepare the site for future use. This would help to eliminate any holding costs and create greater certainty about timescales and costs for a developer, when formulating their own development proposals. 4. Implications (including financial implications) 4.1 Policy 4.1.1 There are none specifically, but the demolition of the existing Greyfriars Complex to enable new development would be consistent with this Council‟s adopted Central Area Action Plan. 4.2 Resources and Risk 4.2.1 The addition of £4 million to the Council‟s borrowing commitments will lead to new revenue liabilities. These revenue costs may be mitigated, in whole or part, by a capital receipt generated from disposal of the cleared land for re- development. However, if no development was able to be achieved as a result of this demolition (consistent with recognised definitions of valid capital expenditure), then the entire expenditure would have to be treated as revenue. Were this were to occur, it would have serious and unplanned negative consequences for the overall revenue budget of this Council. 4.2.2 There is the risk that the costs of the demolition contract may exceed the £4 million estimated. This would necessitate an additional inclusion of further expenditure within the capital programme for 2013/14 and 2014/15, with likely further revenue cost consequences of servicing debt. 4.2.3 The early demolition of the existing structure would eliminate holding (revenue) costs that might otherwise be incurred. This could help to meet some limited part of the repayment costs of the capital borrowing. However, the net revenue savings made by this Council from the closure of the existing bus station and the opening of the new bus facilities has already been taken into account, in the borrowing approved to construct the new bus station. 4.2.4 The demolition contract negotiated with the Framework contractor will be a procured on lump sum basis to help minimise the financial risk to the Council. There may still though be a need to instruct variations on site, given the complexity of the project. The actual costs may therefore still vary from that initially agreed. Jmd/committees/cabinet report template/05/11/13 4.3 Legal 4.3.1 The demolition of the Greyfriars complex by this Council may require a variation of the existing Development Agreement with Legal and General plc. The financial basis of the proposed transfer of certain Council property assets to Legal & General was calculated having regard to a number of matters, including the costs of the demolition of the existing complex.
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