Agenda, decisions and minutes

Venue: Committee Rooms 1 & 2 - Deanes. View directions

Contact: Democratic Services Team 

Media

Items
No. Item

44/19

Apologies for absence

Minutes:

There were no apologies for absence.

45/19

Declarations of interest

Minutes:

There were no declarations of interest.

46/19

Urgent matters

To consider any items of business, other than those shown on this agenda and which, by reason of special circumstances to be stated at the meeting, in the opinion of the Chairman, should be considered at the meeting as a matter of urgency.

 

Minutes:

There were no urgent items.

47/19

Minutes of the meeting held on 12 November 2019 pdf icon PDF 221 KB

The Chair will move that the minutes of the meeting be signed as a correct record. The only part of the minutes that can be discussed is their accuracy.

Minutes:

The minutes of the meeting held on 12 November 2019 were confirmed as an accurate record and signed by the Chair.

48/19

Revenue and Capital Monitoring as at 30 September 2019 (Quarter Two) pdf icon PDF 614 KB

This report presents the 2019/20 forecast outturn position, as at the 30 September 2019, for revenue and capital expenditure and income and compares it with variances reported against budget. The report also identifies risks and issues which could have significant financial impacts.

 

Recommendation from the Cabinet Member for Finance and Service Improvement

Decision:

To note:

 

1)     Forecast net revenue expenditure on services in 2019/20, before net transfers to reserves, is forecast to be £0.85M lower than the working budget;

 

2)     Capital expenditure in 2019/20 is forecast to be £0.76M lower than the latest approved budget;

 

3)     Risks associated with the revenue and capital forecasts are as detailed in sections 4 and 7 of the report;

 

4)     The 2019/20 savings position is as detailed in section 8 of the report; and

 

5)     That budget virements amounting to £0.12M were processed during quarter two, as summarised in section 9 of the report.

Minutes:

The Cabinet Member for Finance and Service Improvement introduced the report which presented the 2019/20 forecast outturn position, as at the 30 September 2019, for revenue and capital expenditure and income and compared it with variances reported against budget.  The report also identified risks and issues which could have significant financial impacts.  She stated that the report presented a positive forecast position, the result of continued robust oversight by budget holders and management.  It also noted that the capital programme spend was significantly on track to be achieved.  She highlighted that the property portfolio continued to do well and was returning more than forecast and that 94.25% of approved revenue savings were on track to be delivered.

 

Resolved:     To note

 

1)     Forecast net revenue expenditure on services in 2019/20, before net transfers to reserves, is forecast to be £0.85M lower than the working budget;

 

2)     Capital expenditure in 2019/20 is forecast to be £0.76M lower than the latest approved budget;

 

3)     Risks associated with the revenue and capital forecasts are as detailed in sections 4 and 7 of the report;

 

4)     The 2019/20 savings position is as detailed in section 8 of the report; and

 

5)     That budget virements amounting to £0.12M were processed during quarter two, as summarised in section 9 of the report.

49/19

Property Investment Strategy Half Year Report for Quarter 2 - 2019 pdf icon PDF 489 KB

This report outlines the activity within the council’s property services team in implementing the approved Property Investment Strategy for the property investment portfolio for the period between 1st July - 30th September 2019.

 

Recommendation from the Cabinet Member for Regeneration and Property

Decision:

Note the Property Investment Strategy Report for Q2 2019 and that there were no further acquisitions during Q2 2019.

Minutes:

The Cabinet Member for Regeneration and Property introduced the report which provided an update of the activity within the council’s property services team in implementing the approved Property Investment Strategy for the property investment portfolio for the period between 1 July to 30 September 2019.  He stated that the Property Investment Strategy had delivered an additional £1.13 million of revenue income to support services to residents and the average yield of the investments were achieving 7%.  He also confirmed that allocation of the fund had been completed with the acquisition of the B & Q unit which would generate a further £600,000 income per year and would increase the total yield in rent to £1.74 million, an overall yield of 8%.

 

Resolved: To note the Property Investment Strategy Report for Q2 2019 and that there were no further acquisitions during Q2 2019.

50/19

Proposed Ground Lease Restructure - Site 3, Jays Close, Viables Business Park, Basingstoke RG22 4BA pdf icon PDF 511 KB

This report outlines a proposed lease restructure involving the surrender of ITT’s two ground leases at Site 3 Viables Business Park, Jays Close, Basingstoke and the granting of two new 150 year ground leases to St Modwen Developments. 

 

Recommendation from the Cabinet Member for Regeneration and Property

Additional documents:

Decision:

1)     Approve the surrender of ITT Industries Limited’s two ground leases at site 3 Jays Close, Basingstoke.

 

2)     Approve the granting of a Building Agreement and two new 150 year ground leases to St Modwen Developments to facilitate redevelopment of the subject site into three new warehouse units and two ancillary retail/leisure units.

 

3)     Note that the approvals requested above create a capital undervalue from the proposed lease restructure of £5,000 (equating to 0.06% of the unrestricted valuation). In accordance with the disposals powers conferred under sections 123 and 127 of the Local Government Act 1972 Cabinet is asked to approve the granting of the new leases on this basis.

 

4)     Note that one of the three new units will be retained by BDBC for direct letting at a minimum rent guaranteed by St Modwen as set out in appendix 5 of the report.

 

5)     Note that a further minimum ground rent on the two new ground leases as set out in appendix 5 of the report will be guaranteed by St Modwen.

 

6)     Delegate authority to the Legal Services Manager, in consultation with the Head of Property and Assets to agree that form of legal documents to enable the recommendations 1-5 to be put into effect.

 

7)     Delegate authority to the Head of Property and Assets in consultation with the Cabinet Member for Regeneration and Property and the Executive Director of Finance and Resources and the Legal Services Manager to agree any alternative legal structure provided the financial terms of deal and the risk to the council does not materially change.

Minutes:

The Cabinet Member for Regeneration and Property introduced the report which outlined a proposed lease restructure involving the surrender of ITT’s two ground leases at Viables Business Park, and the granting of two new 150 year ground leases to St Modwen Developments.  He added that the proposal was an example of the council actively managing its assets to enable new investment in Basingstoke to provide modern, industrial warehouse accommodation.  He stated that the site was a council owned freehold site held on a long lease by ITT that had become increasingly redundant.  The proposal would enable a third party, St Modwen, to enter into a development agreement to restructure the lease and provide the opportunity to construct three industrial warehouse units.  He concluded that the proposal would safeguard rental income for the council and provide future rental growth, with one unit being directly owned by the council and a ground rent on the remaining two units.

 

Resolved: Cabinet

 

1)     Approve the surrender of ITT Industries Limited’s two ground leases at site 3 Jays Close, Basingstoke.

 

2)     Approve the granting of a Building Agreement and two new 150 year ground leases to St Modwen Developments to facilitate redevelopment of the subject site into three new warehouse units and two ancillary retail/leisure units.

 

3)     Note that the approvals requested above create a capital undervalue from the proposed lease restructure of £5,000 (equating to 0.06% of the unrestricted valuation). In accordance with the disposals powers conferred under sections 123 and 127 of the Local Government Act 1972 Cabinet is asked to approve the granting of the new leases on this basis.

 

4)     Note that one of the three new units will be retained by BDBC for direct letting at a minimum rent guaranteed by St Modwen as set out in appendix 5 of the report.

 

5)     Note that a further minimum ground rent on the two new ground leases as set out in appendix 5 of the report will be guaranteed by St Modwen.

 

6)     Delegate authority to the Legal Services Manager, in consultation with the Head of Property and Assets to agree that form of legal documents to enable the recommendations 1-5 to be put into effect.

 

7)     Delegate authority to the Head of Property and Assets in consultation with the Cabinet Member for Regeneration and Property and the Executive Director of Finance and Resources and the Legal Services Manager to agree any alternative legal structure provided the financial terms of deal and the risk to the council does not materially change.

 

Reasons for the decision:

 

1)     The proposal will allow the development of new warehousing and logistics provision on a currently underutilised site, with one unit directly owned and managed by the council.

 

2)     The proposed lease restructure will deliver regeneration and enhance rental income. The transaction will also avoid the potential risk of ITT collapsing the company or mothballing the site.

 

3)     This is an opportunity to diversify the BDBC property portfolio income away from predominant ground rents,  ...  view the full minutes text for item 50/19