ITEM NO: 5 Report To: STRATEGIC CAPITAL AND MONITORING PANEL Date: 13 July 2015 Reporting Officer: Elaine Todd, Assistant Executive Director, Asset and Investment Partnership Management Subject: VISION TAMESIDE PHASE 2 PROGRESS UPDATE Report Summary: A Key Decision was made on 4 February 2015, to progress the Vision Tameside Phase 2 programme. This report is intended to update members of the Panel with progress in respect of the programme and any financial implications. Recommendations: That members of the Panel review the content of the report and recommend to Council the approval of the virement of budgets Links to Community Strategy: Prosperous Tameside Policy Implications: In line with approved policy Financial Implications: The overall costs of the Vision Tameside programme must be contained within the overall net budget of £48,673,794, which (Authorised by the Section 151 was approved in February 2015. Contingency provisions were Officer) made for construction and overall programme related cost pressures as part of this budget allocation. As the programme progresses and firm costs are determined, there will be variations which will require approval. Key elements of the programme, including decant, demolition and lease terminations now have firm costs and the scanning and IT costs have been rescoped. It is important to note that the projected costs are still contained within the overall programme budget however; contingency budgets have been reduced by £946,854. This will leave a construction contingency of £941,316 and an overall contingency of £1,581,548. There are still significant risks to construction costs related to further design development, the exposed Ashton Town hall façade and the cost of the college element of the new building, particularly related to the level of fitted furniture required. Any additional costs will need to be delivered from the remaining contingency to ensure that the project remains within the overall approved budget. Expenditure Budget Projected Variation Approved Expenditure February May 2015 2015 £ £ £ Construction 36,320,849 36,849,251 528,402 TMBC 1,469,718 941,316 -528,402 contingency 5% Contingency for 2,642,327 2,642,327 0 inflation at 7.73% Gross 40,432,894 40,432,894 0 construction costs Less SFA grant -4,000,000 -4,000,000 0 Net construction 36,432,894 36,432,894 0 costs Additional costs Re fit / Fit out 1,709,900 1,709,900 0 costs re early lease termination – Wilkos Decant / condition 2,200,000 2,824,452 624,452 works Public Realm 2,631,000 2,631,000 0 Document 1,000,000 500,000 -500,000 scanning Co-op bank 100,000 100,000 0 termination of lease Potential loss of 550,000 550,000 0 profits Wilkos Legal costs of 50,000 50,000 0 construction works IT enablement 2,000,000 2,194,000 194,000 Programme 0 100,000 100,000 management Programme 2,000,000 1,581,548 -418,452 contingency Total 48,673,794 48,673,794 0 It is important that regular monitoring of all expenditure budgets, value for money and inflation projections are maintained throughout the programme. It is also important that the agreement for lease and lease with the college, CCG and JCP are completed as soon as possible so that the capital and revenue implications of the programme can be confirmed. Legal Implications: The project is progressing well and there remain some areas that needs resolution, including the contract for the programme (Authorised by the Borough management so we can ensure that we are receiving vfm. Solicitor) There are still a number of significant issues that need to be resolved to ensure that the programme remains on budget. Risk Management: The key risks, impact and mitigation proposed are included in the report at Section 5. The highest risks are reviewed by the internal working group on a fortnightly basis. Access to Information: The background papers relating to this report can be inspected by contacting the report writer Elaine Todd, Assistant Executive Director, Asset and Investment Partnership Management by: Telephone: 0161 342 3238 E-mail: [email protected] 1. INTRODUCTION 1.1 On 4 February 2015, the Executive Cabinet approved a Key Decision to: a) surrender the current lease with Wilkinsons, and enter into an agreement for lease for the retail unit within the redeveloped Vision Tameside Phase 2 building’ on the terms detailed within the report; b) enter into an agreement to surrender the current lease with the Co-operative Bank plc; c) accept the Stage 1 submission in respect of the Vision Tameside Phase 2 building; d) procure the required extended design and planning work to develop the Stage 2 submission, through the TIP at a projected cost of £ £1,078,949; e) procure the demolition of the current TAC building and enabling works at an estimated cost of £3,361,863, through the TIP; f) the negotiation of an agreement for lease with the College, Clinical Commissioning Group, Job Centre Plus and other partners; and g) the allocation of additional capital and revenue budget to ensure that the project is fully resourced which was approved at Council on 24 February 2015, as follows. 1.2 The Vision Tameside Phase 2 programme, also included details of the investment and decant programme required to the retained corporate and civic buildings to address condition of the buildings and accommodate staff and services, throughout the decant period and in permanent locations, into the future. 1.3 Since the Stage 1 report was issued and approved, the design of the Vision Tameside Phase 2 building has been progressed, with a number of options put forward for building finishes and the northern elevation as well as developing the internal areas of the entire building. 1.4 This report is intended to update members of the Panel with progress with the Vision Tameside Phase 2 Programme and the potential financial impact of any proposed changes. 2 PROGRESS SINCE STAGE 1 2.1 Significant progress has been made since 4 February 2015, when the last Key Decision was made. 2.2 Wilkinsons moved out to their temporary store in the Arcades on 6 May 2015, with the surrender of their lease being imminent, once the strip out of their old store has been completed. An agreement for lease for the retail unit within the redeveloped Vision Tameside Phase 2 building has been signed; 2.3 The surrender of the current lease with the Co-operative Bank plc has progressed, with the bank leasing an alternative retail unit, the former Car Phone Warehouse building on the Market Place in Ashton. They are in the process of refitting the unit and expect to vacate their existing building at the end of July 2015; 2.4 The plans for the demolition of the current TAC building have progressed and a planning application was approved at Speakers Panel in April 2015, for the demolition of the TAC building and the Listed Building Consent for the works to Ashton Town Hall and the former Water Board building. The National Planning Casework Unit for consideration. This is a standard process, which is a result of the Council being unable to grant consent to its own planning listed building applications; 2.5 Discussions have progressed with plans for the College, Job Centre Plus (JCP) and the Clinical Commissioning Group (CCG) about their proposed space, CCG will take up approximately 650m2 and JCP approximately 400m2. The rent achievable for this space would be in the region of £113,000 to £170,000 per annum. This additional revenue income will reduce the overall cost of operation the new building, however, it will reduce the number of work spaces for Tameside staff in the new building. There are still sufficient work places across the retained corporate and civic buildings for projected numbers of staff in 2018. 2.6 Leases have been signed at Birchcroft for the Drugs Intervention Service, Clarence Arcade Ashton, Patterson and Rothwell, Ashton, Shirley House, Hyde and the PCC building in Ashton for Public Health service; 2.7 The decant programme has been significantly progressed. The works to the all the corporate and civic buildings, to enable the decanting of services, have been completed. Decant to the following buildings has been completed: Dukinfield Town Hall; Birchcroft; The Archive Centre, Ashton; Stalybridge Civic Hall; Hyde Town Hall; Denton Town Hall; Denton Festival Hall; Ryecroft Hall; Shirley House; Tame Street; Patterson and Rothwell; Ashton Market Hall; Two Trees; and The Primary Care Centre for Public Health. 2.8 The only decant locations left to complete are Clarence Arcade, where we are waiting for the developer to complete his works and a lease to be signed for the IRIS team at the Primary Care Centre. All service decants are planned to be completed by 10 July 2015. 2.9 Progress has also been made with the design development of the northern elevation of the new building, the general design of the building and finishes. There are funding implications to the project which are detailed in paragraph 4.7. 2.10 The Vodaphone mast will be relocated to James Howe Mill, Turner Lane, Ashton which the Council is intending to purchase, in order to ensure a permanent relocation site is available. The mill will be resold at auction, when the lease has been signed. 2.11 The scope of the building hasn’t changed and remains overall as follows, although the Tameside accommodation analysis may change once internal layouts are finalised: Occupancy Current Design at May 2015 Tameside and Partners Gross Area M2 Reception 96 Customer Service 1,300 Meeting / Interview 372 Library 600 Offices 3,788 Total 6,156 College 7,000 Retail