Agenda item

Report PD015 by the Property Development Manager.

(Enclosure)

Decision:

1) That Cabinet approves in principal the redevelopment of land and premises off St Catherine’s Road and St Peter’s Hill, Grantham as set out in report PD015 subject to securing suitable detailed Planning Permission and terms of agreement with interested parties and funding. 

2) That Cabinet recommends to Council the allocation of up to £6.1m in the capital programme over a 3 year period for delivery of the scheme of redevelopment. The composition of the scheme will be dependent upon the validity of the detailed business case and contract build cost for the scheme, which will be subject to a Key decision by Cabinet.

3) That delegate authority is given to the Strategic Director- Corporate Focus in consultation with the Portfolio holder for Grow the Economy and Economic Development  and the Portfolio Holder for Strategic Resources - Well Run Council to incur expenditure on professional fees, application fees, etc to conclude the detailed business case up to a maximum of £75k and negotiate and enter into the following transactions and agreements at the appropriate time and where necessary subject to the grant of planning permission for development and the necessary budget provision being agreed by Council:*

·       Heads of Terms with KRNS Properties Limited (KRNS) for Reel Cinema Limited.

·       Apply for detailed Planning Permissions as necessary for delivery of the scheme.

·       Agree procurement route for construction works

·       Release of 3R’s (now Reel Cinema Limited) existing ground lease. *

·       Release of existing premises and Lease on new premises for Grantham Senior Citizens Club. *

·       Development Agreement/Agreement for lease with (KRNS) for Reel Cinema. *

·       Extinguish existing Car Parking orders (St Catherine’s Road) and confirm rights.

·       Contract for construction works *

·       Lease of cinema building to KRNS.*

·       Warrantees/ guarantees etc to ensure performance of the construction works. *

·       Agreement for lettings on completed commercial units. *

Considerations/reason for decision

1)      Report PD015 by the Property Development Manager.

2)      A Non Key decision ref PD 014 had been taken to enable the design solution to be developed.

3)      The St Peter's Hill site presented an opportunity for a new leisure, entertainment and business quarter to be created in the town centre using land already in the ownership of the District Council.

4)      The relocation of Grantham Senior Citizens Club (GSCC) into a fit for purpose accommodation allowed the club to continue and thrive whilst enabling the cinema to be extended with 4 new screens to make a 6 screen multiplex cinema offer for Grantham.

5)      Comments made by the Leader about the size of the proposed project and what can be delivered subject to the budget allocation and planning permission. The proposal would be a significant asset to Grantham and the surrounding district and it had not been looked a routinely and she thanked those officers who had been involved in the project to date.

6)      Comments made by a Member about the size of the GSCC.

Other Options Considered

Comparison of alternative economic related investment options, supported by general capital funding, based on spending the equivalent of £6 million on each option.

          Business Innovation Centre

To create a standalone BIC as envisage for station approach on a privately owned site of approximately 24,000 sq ft, built to high environmental standards to attract external funding would cost in the region of £6m being £5.4m to build and circa £0.6m to acquire land.

Quantitative outputs (over 3 years): source, Station Approach ERDF business case.

·                  93 new start up businesses

·                  19 growing businesses

·                  9 Spin out businesses

·                  31 inward investors

·                  170 New jobs created

·                  56 Safeguarded jobs

·                  24,000 sq ft floor space

·                  1 acre of brown field land redeveloped

·                  3,000 users of the centre

·                  12 innovation events

Provide serviced employment land

To purchase and service land with the necessary infrastructure to support business development and growth, 25 acres of serviced land could be delivered (subject to availability).  

Assume 50% built footprint- 12.5 acres or 5.05 ha= 50,586 sq m built (NIA)

10% office = 5058 m sq               = 420 jobs

Industrial = 45,528 m sq              = 1264 jobs

                              Total jobs    = 1684

Having recently completed the purchase of 5.5 acre of land for such a purpose, following an extensive site finding exercise, officers believe the purchase of an additional 25 acres of employment land within the Grantham area is not considered achievable at this point in time.

          Proposed development

It is believed the proposed development could generate the following new jobs;

Cinema                    12-20 jobs, some part time

Restaurant               50 jobs

B.I.C/ Office             162 jobs

             Total jobs = 224

In addition every £1 spent on construction output generates a total of £2.84^[1] in total economic activity creating opportunities for employment and for the local supply chain