EXEMPT INFORMATION REPORT NO: 65/2014
APPENDICES A, B, D, E
CABINET
18th
March 2014
Barleythorpe Hall Redevelopment
Report of the Director for Places (Development & Economy)
STRATEGIC AIM: Creating a brighter future for all; Creating a safer
community; Building our infrastructure
KEY DECISION YES DATE ITEM FIRST APPEARED ON
FORWARD PLAN
9th August 2013
1. PURPOSE OF THE REPORT
1.1 To update on revised offers received for Barleythorpe Hall and to seek a
decision on the sale.
2. RECOMMENDATIONS
2.1 That Cabinet considers the revised bids for Barleythorpe Hall and the
proposal from a third party to remarket jointly.
2.2 That Cabinet recommends to Full Council the disposal of Barleythorpe
Hall to the Preferred Bidder, delegating authority to the Director for
Places (Development and Economy) in consultation with the Portfolio
Holder for Places (Development) and Finance to finalise the detailed
matters in the terms of the disposal.
2.3 That Cabinet declines the alternative bids and the proposal to remarket
jointly.
3. REASONS FOR THE RECOMMENDATIONS
3.1 The revised bids include an offer that could be recommended for acceptance
due to the amount of the capital receipt and deliverability of the revised
scheme.
3.2 Reduce the ongoing revenue expenditure of continued retention of
Barleythorpe Hall.
4. UPDATE ON BIDS
4.1 Historic bids
As detailed in the previous cabinet report (Report 201/2013) the Hall was
vacated in 2006 following the reprovision of the elderly care accommodation
and services at the Rutland Care Village and a decision was taken to sell the
asset. Marketing commenced in late 2006 with planning applications also
being submitted for conversion and new build.
Bids were sought with a closing date of September 2007 and the highest bid
was accepted. However due to the downturn in the property market this was
withdrawn in Spring 2008 and a decision was made by Cabinet to mothball
the Hall pending an upturn in the market.
In March 2011 Cabinet approved the remarketing of the Hall, and in March
2012 one bid was on the table at the closing date. To ensure any further
interest was captured, a further round of marketing took place with a cut-off
date of May 2013.
Cabinet report 201/2013 detailed the bids received in May 2013. All of the
bids referred to above are detailed at Exempt Appendix A. In addition there
have been a number of expressions of interest that have not materialised
into firm bids.
4.2 Current bids
Further to the decision by Cabinet in May 2013 (report 201/2013) officers
commenced discussions with the Welland Procurement over the EU
procurement process for securing a partner for a Joint Venture development.
Since that time a revised bid has been received from one of the consistently
interested parties who had continued to demonstrate firm interest. This bid
is considered worthy of further consideration. The proposed scheme is
deemed deliverable and the gross bid is at an acceptable level being 10%
more than the figure reported in September 2013. This is supported by our
property agent. There will be deductions from the gross offer for developer
contributions in accordance with Council Policy.
Further dialogue has taken place with the bidder to look at alternative
approaches for vehicular access and there is now a firmed-up proposal
presented. This is detailed in the Exempt Appendix B and is subject to
contract and obtaining planning consent. The bidder does not require any
further internal board or bank approvals/valuation.
The scope of the arrangements moving forward is that the bidder would be
required to exchange conditional contracts one month after receipt of draft
contract which would include arrangements/timescales for the submission of
the planning application. Completion of the transaction will be required to be
within 2 months of receipt of satisfactory planning permission. The proposed
sale area is edged red on Appendix C.
4.3 A second bidder has also confirmed that their original offer for straight
purchase rather than a joint venture remains on the table. The residential
scheme with potential demolition of the Hall and new build is detailed in
Exempt Appendix B.
4.4 A potential third bidder made contact on 19th
February 2014 to express
interest in the site but have subsequently contacted the property agent to
confirm that they would not be making a firm offer.
5. ADDITIONAL JOINT MARKETING PROPOSAL
5.1 In mid-January 2014 an approach was received from a third party seeking to
enter into a joint marketing arrangement with the Council for the Hall site and
their own site. The landowner was asked to provide a more detailed
proposal by 31st
January to set out the principles of that joint arrangement
[e.g. a collaboration agreement], the perceived added benefits to each party
and the potential timescales involved. The short timescale for this more
detailed proposal was set in order to maintain momentum with considering
the revised bids. A further proposal was received on 31st
January and this is
detailed at Exempt Appendix B.
6. CONSULTATION
6.1 A meeting of the Ward Members, Portfolio Holder and Officers (Planning,
Highways and Property) took place with the residents of Barleythorpe
village, at their request, on 7th
October 2013. The purpose of the meeting
was to update them on the proposals for Barleythorpe Hall in terms of; future
use and marketing/planning/access; traffic concerns and potential highway
improvements in the village; planning updates on the Hawksmead
development (Oakham North) and the Local Plan review (restraint village
status).
The discussions at the meeting helped clarify what redevelopment would be
appropriate in planning terms and be likely to be amenable to the residents
(e.g. residents felt that retention of the hall was a high priority). This has
enabled progress on shaping the asset disposal in particular the potential
access routes. It has in turn assisted with bids being refined and firmed-up
based on planning advice provided.
7. EU PROCESS AND JOINT VENTURE
7.1 Following further consideration of this process and in the light of the firm bid
for a straight sale which is considered to be deliverable and acceptable, this
process has not been progressed significantly. There were concerns
regarding the lengthy timescale which becomes more unfavourable when
compared to a straight sale when a firm acceptable bid is in play. The agent
has also advised that there is no hard evidence of an uplift in value but there
will be a considerable delay going through the EU process and the ongoing
asset holding costs
7.2 The straight sale should provide a much earlier capital receipt than the EU
process as it would be possible to move quickly to exchange of contracts
and submission of planning application. With the EU process there would be
a period of circa 48 weeks before the initial award decision and the
exchange of contracts and planning submission following on from that stage.
The amendments to the scheme provide greater chance of delivery than
previously and an overage clause would be included within the contract to
capture the potential uplift in value from planning improvements that might
be obtained during the application process. This value uplift will be shared
through an agreed financial control process which is to be developed as part
of the detailed matters for this disposal.
If Cabinet are not minded to accept the current bid then the EU process
could be resumed.
8. FINANCIAL IMPLICATIONS
8.1 Financial implications:
a) If the current straight sale bid is progressed a gross capital receipt as
detailed in Exempt Appendix B could be achieved, subject to planning, but
with deductions for developer contributions including affordable housing
(commuted sums). A satisfactory financial status summary report on the
preferred bidder is attached at Exempt Appendix D.
b) The implications of the third party joint marketing proposal cannot be
quantified unless further detail is provided. However, the protracted
timescale will mean vacant property costs will continue to be incurred for a
longer period of time.
9. RISK MANAGEMENT
RISK IMPACT COMMENTS
Time M The Hall is deteriorating and a solution needs to be
concluded to remove the holding costs
Viability M There are a number of significant issues to be overcome
in terms of planning and highways
Finance M Further deterioration of the Hall and grounds will impact
on revenue budgets and continuing to hold the asset will
further delay capital receipts. The scheme as presented
will allow the capital receipt to be applied to other capital
projects or reduce borrowing.
Profile M The asset has a raised profile in the locality but not
beyond the village. However, redevelopment in a restraint
village may become a cause for concern or comment.
Equality
&
Diversity
L An EIA questionnaire has been completed which
indicates a full EIA is not required.
10. REASONS WHY THE REPORT IS MARKED “NOT FOR PUBLICATION”
10.1 The Exempt Appendices are marked “Not For Publication” because
they contain exempt information as defined in paragraph 3 of Part 1 of
Schedule 12A of the Local Government Act 1972.
Background Papers Report Author
Cabinet Report 201/2013 Pritesh Parmar and Judith Bayes
Tel No: (01572) 722577
e-mail: enquiries@rutland.gov.uk
A Large Print or Braille Version of this Report is available
upon request – Contact 01572 722577.
APPENDICES A, B, D, E
CABINET
18th
March 2014
Barleythorpe Hall Redevelopment
Report of the Director for Places (Development & Economy)
STRATEGIC AIM: Creating a brighter future for all; Creating a safer
community; Building our infrastructure
KEY DECISION YES DATE ITEM FIRST APPEARED ON
FORWARD PLAN
9th August 2013
1. PURPOSE OF THE REPORT
1.1 To update on revised offers received for Barleythorpe Hall and to seek a
decision on the sale.
2. RECOMMENDATIONS
2.1 That Cabinet considers the revised bids for Barleythorpe Hall and the
proposal from a third party to remarket jointly.
2.2 That Cabinet recommends to Full Council the disposal of Barleythorpe
Hall to the Preferred Bidder, delegating authority to the Director for
Places (Development and Economy) in consultation with the Portfolio
Holder for Places (Development) and Finance to finalise the detailed
matters in the terms of the disposal.
2.3 That Cabinet declines the alternative bids and the proposal to remarket
jointly.
3. REASONS FOR THE RECOMMENDATIONS
3.1 The revised bids include an offer that could be recommended for acceptance
due to the amount of the capital receipt and deliverability of the revised
scheme.
3.2 Reduce the ongoing revenue expenditure of continued retention of
Barleythorpe Hall.
4. UPDATE ON BIDS
4.1 Historic bids
As detailed in the previous cabinet report (Report 201/2013) the Hall was
vacated in 2006 following the reprovision of the elderly care accommodation
and services at the Rutland Care Village and a decision was taken to sell the
asset. Marketing commenced in late 2006 with planning applications also
being submitted for conversion and new build.
Bids were sought with a closing date of September 2007 and the highest bid
was accepted. However due to the downturn in the property market this was
withdrawn in Spring 2008 and a decision was made by Cabinet to mothball
the Hall pending an upturn in the market.
In March 2011 Cabinet approved the remarketing of the Hall, and in March
2012 one bid was on the table at the closing date. To ensure any further
interest was captured, a further round of marketing took place with a cut-off
date of May 2013.
Cabinet report 201/2013 detailed the bids received in May 2013. All of the
bids referred to above are detailed at Exempt Appendix A. In addition there
have been a number of expressions of interest that have not materialised
into firm bids.
4.2 Current bids
Further to the decision by Cabinet in May 2013 (report 201/2013) officers
commenced discussions with the Welland Procurement over the EU
procurement process for securing a partner for a Joint Venture development.
Since that time a revised bid has been received from one of the consistently
interested parties who had continued to demonstrate firm interest. This bid
is considered worthy of further consideration. The proposed scheme is
deemed deliverable and the gross bid is at an acceptable level being 10%
more than the figure reported in September 2013. This is supported by our
property agent. There will be deductions from the gross offer for developer
contributions in accordance with Council Policy.
Further dialogue has taken place with the bidder to look at alternative
approaches for vehicular access and there is now a firmed-up proposal
presented. This is detailed in the Exempt Appendix B and is subject to
contract and obtaining planning consent. The bidder does not require any
further internal board or bank approvals/valuation.
The scope of the arrangements moving forward is that the bidder would be
required to exchange conditional contracts one month after receipt of draft
contract which would include arrangements/timescales for the submission of
the planning application. Completion of the transaction will be required to be
within 2 months of receipt of satisfactory planning permission. The proposed
sale area is edged red on Appendix C.
4.3 A second bidder has also confirmed that their original offer for straight
purchase rather than a joint venture remains on the table. The residential
scheme with potential demolition of the Hall and new build is detailed in
Exempt Appendix B.
4.4 A potential third bidder made contact on 19th
February 2014 to express
interest in the site but have subsequently contacted the property agent to
confirm that they would not be making a firm offer.
5. ADDITIONAL JOINT MARKETING PROPOSAL
5.1 In mid-January 2014 an approach was received from a third party seeking to
enter into a joint marketing arrangement with the Council for the Hall site and
their own site. The landowner was asked to provide a more detailed
proposal by 31st
January to set out the principles of that joint arrangement
[e.g. a collaboration agreement], the perceived added benefits to each party
and the potential timescales involved. The short timescale for this more
detailed proposal was set in order to maintain momentum with considering
the revised bids. A further proposal was received on 31st
January and this is
detailed at Exempt Appendix B.
6. CONSULTATION
6.1 A meeting of the Ward Members, Portfolio Holder and Officers (Planning,
Highways and Property) took place with the residents of Barleythorpe
village, at their request, on 7th
October 2013. The purpose of the meeting
was to update them on the proposals for Barleythorpe Hall in terms of; future
use and marketing/planning/access; traffic concerns and potential highway
improvements in the village; planning updates on the Hawksmead
development (Oakham North) and the Local Plan review (restraint village
status).
The discussions at the meeting helped clarify what redevelopment would be
appropriate in planning terms and be likely to be amenable to the residents
(e.g. residents felt that retention of the hall was a high priority). This has
enabled progress on shaping the asset disposal in particular the potential
access routes. It has in turn assisted with bids being refined and firmed-up
based on planning advice provided.
7. EU PROCESS AND JOINT VENTURE
7.1 Following further consideration of this process and in the light of the firm bid
for a straight sale which is considered to be deliverable and acceptable, this
process has not been progressed significantly. There were concerns
regarding the lengthy timescale which becomes more unfavourable when
compared to a straight sale when a firm acceptable bid is in play. The agent
has also advised that there is no hard evidence of an uplift in value but there
will be a considerable delay going through the EU process and the ongoing
asset holding costs
7.2 The straight sale should provide a much earlier capital receipt than the EU
process as it would be possible to move quickly to exchange of contracts
and submission of planning application. With the EU process there would be
a period of circa 48 weeks before the initial award decision and the
exchange of contracts and planning submission following on from that stage.
The amendments to the scheme provide greater chance of delivery than
previously and an overage clause would be included within the contract to
capture the potential uplift in value from planning improvements that might
be obtained during the application process. This value uplift will be shared
through an agreed financial control process which is to be developed as part
of the detailed matters for this disposal.
If Cabinet are not minded to accept the current bid then the EU process
could be resumed.
8. FINANCIAL IMPLICATIONS
8.1 Financial implications:
a) If the current straight sale bid is progressed a gross capital receipt as
detailed in Exempt Appendix B could be achieved, subject to planning, but
with deductions for developer contributions including affordable housing
(commuted sums). A satisfactory financial status summary report on the
preferred bidder is attached at Exempt Appendix D.
b) The implications of the third party joint marketing proposal cannot be
quantified unless further detail is provided. However, the protracted
timescale will mean vacant property costs will continue to be incurred for a
longer period of time.
9. RISK MANAGEMENT
RISK IMPACT COMMENTS
Time M The Hall is deteriorating and a solution needs to be
concluded to remove the holding costs
Viability M There are a number of significant issues to be overcome
in terms of planning and highways
Finance M Further deterioration of the Hall and grounds will impact
on revenue budgets and continuing to hold the asset will
further delay capital receipts. The scheme as presented
will allow the capital receipt to be applied to other capital
projects or reduce borrowing.
Profile M The asset has a raised profile in the locality but not
beyond the village. However, redevelopment in a restraint
village may become a cause for concern or comment.
Equality
&
Diversity
L An EIA questionnaire has been completed which
indicates a full EIA is not required.
10. REASONS WHY THE REPORT IS MARKED “NOT FOR PUBLICATION”
10.1 The Exempt Appendices are marked “Not For Publication” because
they contain exempt information as defined in paragraph 3 of Part 1 of
Schedule 12A of the Local Government Act 1972.
Background Papers Report Author
Cabinet Report 201/2013 Pritesh Parmar and Judith Bayes
Tel No: (01572) 722577
e-mail: enquiries@rutland.gov.uk
A Large Print or Braille Version of this Report is available
upon request – Contact 01572 722577.
