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The Strategic Director, Commercial and Place, submitted a report a copy of which had been circulated to each Member.
Fiona Duhamel, Economic Growth Manager, introduced the report to the Committee and set out the background to the redevelopment of 5-6 St Nicholas Street. The scheme now had planning permission for the change of use to seven flats and for a commercial unit. Invitations to tender for the development had been sent out to contactors in May 2017. However, in view of the timescales and the schedule of Revolving Investment Fund (RIF) Committee meetings, it was requested that authority for the appointment of the main contractor be delegated to either the Strategic Director Commercial and Place or the Assistant Director Policy and Corporate. In addition it was proposed to commence the soft marketing of the residential and commercial units. Once marketing advice had been received and a period of marketing undertaken, the scheme would be reported back to the Committee for decisions on the final disposal of the site.
In discussion members of the Committee highlighted the value of the feasibility study, which had been the subject of some public criticism. This was a complex building with a number of specialist issues and the feasibility study had enabled the Council to bring a popular building back into use whilst delivering housing in the town centre and an income stream to the Council. It was anticipated that the construction phase would take between seven to nine months and that the units would be ready for the spring market. Members were also provided with reassurance that a number of issues, such as sound-proofing, had been addressed through the planning process.
Members also explored whether the development of the units could be transferred to the Housing Development Company, but it was explained that the Company would be established on 1 October 2017 whilst the units were under construction, and it would be very difficult to transfer a project to the Company once building work had commenced.
RESOLVED that:-
(a)
Authority be delegated to the Strategic Director Commercial and Place or Assistant Director Policy and Corporate, in consultation with the Portfolio Holder for Business and Culture, the authority to appoint the main contractor for the conversion of 5 – 6 St Nicholas Street (Jacks) into 7 flats and a commercial unit, subject to the cost of the works not exceeding the budget previously approved by the RIF Committee.
(b)
Soft marketing of the residential and commercial units commence through an agent with the proposal to dispose of the whole building on a freehold or long leasehold basis.
(c)
The requirement to sell the residential element of the building be noted
(d)
The receipt from the sale of the building be reinvested in the provision of new homes across the Borough to be delivered through the wholly owned housing company.
REASONS
The tender process for this work commenced on 30th May 2017 and will last for 8 weeks. The Council will be ready to appoint a contractor in the early part of August. In order to ensure that there are not delays in the appointment of the contractor officers are asking for the RIF Committee to agree that as long as the successful tender does not exceed the budget previously approved by the RIF Committee and set out in the attached not for publication appendix the appointment of contractor can be delegated as per section 1 of the Strategic Director’s report.
The value of the main contract is expected to exceed £500,000 and RIF Committee approval to appoint the main contractor is required.
Until the Housing Wholly Owned Company is established the Council cannot legally rent out residential properties directly on a private basis. It will therefore be necessary to sell the flats. The Council is also considering a disposal of the commercial unit, although this may depend upon the advice received from the marketing agents and the level of interest from occupiers, and an agent will be procured to market the property.
There are various ways to dispose of the property and it is proposed to come back to the RIF Committee to provide detailed options for the disposal of the site, prior to the start of construction, following advice from the appointed agents.
ALTERNATIVE OPTIONS
The tender process could be undertaken and then the RIF Committee could be asked to make a decision regarding the appointment of the contractor which would result in a delay in appointing the contractor.
The Council could consider transferring the asset to the wholly owned Housing Company which could hold the residential units for rent, however the company is unlikely to be established prior to the start of construction.