Issue - meetings

Report number PD022 of the Portfolio Holders for Grow the Economy – Economic Development and Strategic Resources – Well Run Council.                                        (Enclosure)

Decision:

That the Council amends the General Fund Capital Programme for 2014/15 and 2015/16 to include up to £495,000 from New Homes Bonus Funding over the two financial years to be invested in the extension to Premises at Northfields Industrial Estate, Market Deeping.

In proposing the recommendations in report number PD022, the Portfolio Holder for Strategic Resources – Well Run Council informed Members that the proposed adjustment to the General Fund Capital Programme for 2014/15 and 2015/16 would help retain a company of world-renown in Market Deeping. The proposition was seconded.

A number of Members spoke in favour of the proposals and the Council’s broader economic development priority. Particular comment was made about the importance of providing high-quality, skilled jobs in the district.

In response to a question officers informed Councillors that the project would be funded by New Homes Bonus as it was the Council’s policy to invest this funding in support of Council priorities.

Information on any payback clause, detailed figures on anticipated commercial yield and lease terms could not be shared as they were subject to ongoing negotiations and consequently commercially sensitive information.

One member queried the exact name of the company; officers stated that they would clarify the registered name and ensure it was used on documents.

The proposition was put to the vote and carried unanimously.

Report PD020 from the Property Development Manager.

(To follow)

Decision:

1)          Authority is given by Cabinet to progress the scheme to provide the extension to the existing premises at Northfields Industrial Estate, Market Deeping let to Park Air Systems Ltd within the capital costs highlighted within report PD020.

2)          Cabinet recommends to Council that up to £495,000 is allocated in the Capital Programme for 2014/15 - 2016/17 to be invested in the extension to the Premises at Northfields Industrial Estate, Market Deeping let to Park Air Systems Ltd.

Considerations/reasons for decision:

1)              Report PD020 from the Property Development Manager.

2)              Park Air Systems Ltd had requested the Council to procure additional space by way of an extension for the provision of a training facility.

3)              The extension would be located to the front of the existing site and was expected to give a gross internal area of 300m².

4)              The development secured further investment in the local economy and retained Park Air Systems Ltd as a tenant ensuring the business remained a key contributor to the local economy.

5)              Comments made by the Head of Legal & Democratic Services stating that the procurement route specified was within the Council’s Contract Procedure Rules framework and did not require an exemption form as stated within the report.

6)              Comments made by Members at the meeting welcoming the project.

Other options considered:

1)          A similar amount of money could be invested in the development for example of small starter units elsewhere. But clearly there would be a need for a site acquisition and the investment would not be as secure due to the variable nature of the tenant base. Management costs would be higher and erode income as well. 

2)          Alternatively SKDC could dispose of the Freehold investment in the property and leave it to the private sector to procure. Whilst this would deliver a large capital receipt, the loss of revenue income is significant. PAS is however an excellent covenant but at present the unexpired lease term is very short and may deter investors despite the appetite to extend.

3)              The site is already used for industry and is demised to PAS on an existing lease so there is no alterative scope for development at this time.