Issue - meetings

Report number PD021 by the Portfolio Holders for Grow the Economy – Economic Development and Strategic Resources – Well Run Council                                         (Enclosure)

Decision:

That the Council notes the progress made on developing the St Peter’s Hill scheme and agrees to amend the allocation in the General Fund Capital Programme for this scheme to £4.95m from the £6.1m currently allocated to ‘Town Centre Projects – St Peter’s Hill Development’ for the period 2014/15-2016/17.

The Portfolio Holder for Strategic Resources – Well Run Council proposed the recommendation in report number PD021 (which was seconded), requesting a revision to the General Fund Capital Programme. The Budget approved by Council on 3 March 2014 included an allocation of £6.1m for ‘Town Centre Projects – St Peter’s Hill Development’ for 2014/15 to 2016/17. Changes to proposed onsite provision and further work on costings identified a reduced budget requirement for the project of £4.95m.

Members spoke in support of the proposed cinema development however some expressed disappointment that more information had not been made available to Councillors and that there had not been more public input in developing proposals for the site.

Detailed costings, anticipated commercial yield and lease terms could not be shared as they were subject to ongoing negotiations and consequently commercially sensitive information. Members were assured that officers were undertaking detailed work with a potential contractor to better understand costs and the delivery timeframe and that work developing the business case and financial modelling was ongoing.

The proposition was put to the vote and carried unanimously.

Report PD019 from the Property Development Manager

(Enclosure)

Decision:

1)              Cabinet notes the progress made on developing the scheme and changes made to the component parts of the scheme from those presented in report PD015 and agrees to progress the scheme on this basis within the capital costs highlighted.

2)              Cabinet recommends to Council an allocation in the capital programme for this scheme of £4.9M from the £6.1M currently allocated to “Town Centre Projects – St Peter’s Hill Development” for the period 2014/15 – 2016/17.

Considerations/reasons for decision:

1)              Report PD019 from the Property Development Manager.

2)              Modelling work undertaken to confirm viability of project to include a Business Incubation Centre.

3)              Findings indicating space too small for an efficient BIC facility.

4)              Soft marketing carried out indicating interest in an A3 element to the 1st floor of the cinema offer with potential for an increase in rental levels.

5)              Revised scheme including an A3 offer and units on the 1st floor.

6)              East Midlands Property Alliance framework contractor overall project costs including inflationary costs for materials and labour reflecting the current market.

7)              Scheme viability enhanced by removal of costs associated with an additional floor to accommodate the BIC together with the increased income potential for A3 space on the first floor.

8)              Comments made by the Portfolio Holder Grow the Economy and Economic Development.

Other options considered

·       Design and build with contractors design via OJEU compliant procurement process.

·       Traditional design package commissioned by SKDC and bill of quantities for contractors to competitively price via OJEU compliant procurement process.

The above option would add between 3 to 6 months to the overall timeline before construction commenced on site and have therefore been discounted at this stage.

Report number PD019 by the Head of Property Development.    (Enclosure)

The Property Development Manager presented report PD019 on the redevelopment of St Peter’s Hill, Grantham which gave an update on procurement and budget allocation.

PDG members were informed that soft market testing indicated a market appetite for A3 restaurant space with indicative levels of rent potential higher than previously modelled. Work had also included an assessment of the viability for a business incubation centre and the effect of the proposals on the wider aspiration of a cultural quarter concentrated around St. Peter’s Hill. The study revealed that the floorspace available within the development was too small to create an efficient facility for a business incubation centre.

Based on the outcome of research and removal of the Business Incubation Centre from the scheme project costs had reduced from approximately £6.1m to £4.9m. One member expressed disappointment that a Business Incubation Centre on the site would not prove viable but hoped that a more suitable location could be identified.

A concern was expressed about increasing provision in the site for A3 restaurants. Some members felt that there was already sufficient provision within the town and any further food businesses would either not be supported or threaten the viability of existing establishments.

A number of members suggested that the scheme should include an area that could serve as a gallery for local artists. There was also some discussion on the ways in which the cinema would be developed with an additional four screens and opportunities to increase market appeal by testing different cinema experiences.