*PART 1 – PUBLIC DOCUMENT
AGENDA ITEM No.
15
TITLE OF REPORT: 0.55 ACRE SITE, LUMEN ROAD, ROYSTON
REPORT OF THE HEAD OF FINANCE, PERFORMANCE & ASSET MANAGEMENT
PORTFOLIO HOLDER: COUNCILLOR T.W.HONE
1.
SUMMARY
1.1
To seek Cabinet’s approval to sell approximately 0.55 acres of land with buildings at
Lumen Road, Royston.
2.
RECOMMENDATIONS
2.1
That, subject to consideration of the issues identified in the Part 2 Exempt report that
follows this report, Cabinet agrees to sell the freehold land of approximately 0.55 acres
with buildings at Lumen Road, Royston to the developer as recommended by property
agents GVA in their accompanying report, subject to the net offer being the best
consideration reasonably obtainable.
3.
REASONS FOR RECOMMENDATIONS
3.1
To provide a financial receipt to help fund the 2014 to 2018 capital programme.
3.2
To enable the development of new housing in North Hertfordshire.
4.
ALTERNATIVE OPTIONS CONSIDERED
4.1
Retaining the land and buildings to relet subject to a capital investment by the District
Council to bring back into usable condition.
5.
CONSULTATION WITH EXTERNAL ORGANISATIONS AND WARD MEMBERS
5.1
Cabinet were consulted about the proposed disposal on 1 November
resolved (Minute 66):
2012 and
(1) That, subject to the Royston & District Committee raising no substantive objections
to the proposal, the 0.55 acre site at Lumen Road, Royston be offered for sale on the
open market;
(2) That, the offers received from marketing the site are reported back to Cabinet
seeking authority on which to accept; and
(3) That Royston Town Council be advised of the decision at (1) above and invited to
comment on the proposal to place this site on the open market.
5.2
Royston and District Committee were consulted on 28 November 2012. This
Committee commented:
(1) That the Senior Estates Surveyor be thanked by means of these Minutes for
bringing the report to the attention of Royston and District Committee;
CABINET (28.1.14)
(2) That as part of the consultation process, Royston and District Committee
unanimously agree to the sale of the 0.55 acre site at Lumen Road, Royston as a
Cabinet decision with a query on the legal ownership of the Royston Town Drain.
5.3
The land was advertised for sale in The Comet on 26 September 2013 and the Estates
Gazette on the 28 September 2013.
6.
FORWARD PLAN
6.1
This report contains a recommendation on a key decision that was first notified to the
public on the forward plan 15 November 2013.
7.
BACKGROUND
7.1
The District Council owns the 0.55 acre site at Lumen Road, Royston, as identified
outlined on the attached plan, being a part of registered freehold title No. HD497369.
7.2
Previously contamination was identified in the locality of Lumen Road. In 2009 a formal
notice was served on the Council that some of its land was contaminated and
specifically as a Special site under Parts 2A of the Environmental Act 1990. As
landowner the Council was obliged to address the contamination. Remedial works
were carried out to comply with the legal obligations under the notice. Due to the
established industrial/commercial use of the site it was never intended to completely
remediate the site.
7.3
Following the decision of Cabinet of 1 November 2012, quotes were requested from
three property agents to market the Council’s land. GVA were appointed. The site was
marketed with a closing date for offers of 13 November 2013.
7.4
As part of the consultation Royston & District Committee raised a query about the
ownership of Royston Town Drain. This relates to an issue for property outside the
boundary of the District Council’s land ownership. Whilst some of the drain is located
nearby, this is a separate issue outside this report.
8.
ISSUES
8.1
Details of the offers received and advice from GVA are covered in the Part 2 Exempt
report that follows.
8.2
It is intended that the contract will require the developer to submit a planning
application within a few weeks of signing the contract, if it has not already done so. The
planning application need not be based on the illustrative scheme submitted by the
developer with its bid, provided the application is for the number and type of dwellings
proposed. This is because it is acknowledged that the schemes accompanying the bids
were illustrative only and so there may need to be alterations as part of the planning
process.
8.3
The Senior Estates Surveyor advises that the land has been properly market tested by
GVA.
9.
LEGAL IMPLICATIONS
9.1
Cabinet has within its terms of reference to dispose of land or buildings where the
purchase price exceeds £250,000 but does not exceed £2,500,000.
CABINET (28.1.14)
9.2
Section 123(1) of the Local Government Act 1972 gives a Local Authority the power to
dispose of land provided that it does so for the best price reasonably obtainable. The
process of advertising the land on the open market and inviting bids provides an
assurance that the bids received are the best reasonable obtainable.
9.3
Part I of the Council’s contract procurement rules confirm that disposal of land may be
by formal or informal tender and in this case the Council is proposing to proceed by
informal tender.
9.4
The sale of the land will be achieved by entering into a conditional contract with the
developer.
9.5
The contract will set out timescales for various events that may occur as part of the
process of obtaining planning permission and selling the land. The time period between
the contract being signed and the land being sold will be led by the contract and will
depend on the sequence of events. The contract will only become unconditional if and
when planning permission is granted for the proposed development. There will be a
longstop provision in the contract to ensure that if these conditions have not been met
within 18 months, and there is no ongoing planning appeal, then the contract will come
to an end. If an appeal is ongoing, or there is a dispute about whether conditions
attached to the planning permission are reasonable, then the longstop date will be 24
months. Whilst it is not envisaged that the sale process will continue for this length of
time, the longstop provisions will be included to prevent the contract from continuing
indefinitely.
9.6
Preliminary title investigations do not reveal any issues that would frustrate the
proposed development.
10.
FINANCIAL IMPLICATIONS
10.1
The Local Government and Housing Act 1989 stipulates that receipts from the disposal
of an asset can only be used to meet expenditure incurred for capital purposes or as
provision to meet credit liabilities. The receipt from the sale of land at Lumen Road
will be placed in the Useable Capital Receipts Reserve and will be used as funding for
the future capital programme.
10.2
As at the 1 April 2013 the Council had a total of £1.2million available in the useable
capital receipts reserve. The 2013/14 capital programme alone requires funding from
the Council’s useable and set aside capital receipts of £10.2million.
11.
RISK IMPLICATIONS
11.1
There is a risk that the decision to sell to the recommended developer may be
challenged by another bidder. Equally there is a risk that the sale of the land does not
achieve “best value” for the Council. Both these risks have been mitigated by the
employment of an external property agent to market the site, and obtaining the
professional recommendations of the external agent.
11.2
There is a risk that planning will be refused or that it will be granted subject to
conditions that the purchaser deems unacceptable. In this situation the contract would
come to an end and the District Council would not receive any payment or deposit but
would be free to remarket the land. Ordinarily where a landowner is selling subject to
planning, the contract would contain provisions allowing the landowner to force the
buyer to appeal a refusal of planning or an unacceptable condition. The purpose of
such a clause is to maximise the possibility of planning being granted and therefore the
land sale being completed. However NHDC is in the unique situation of being both
CABINET (28.1.14)
landowner and planning authority and so it would be perverse to include such clauses
in the draft contract. Therefore if planning is refused or granted subject to conditions
that the contract deems unreasonable, then it will be within the discretion of the
developer to decide whether or not to appeal.
12.
EQUALITIES IMPLICATIONS
12.1
The Equality Act 2010 came into force on the 1st October 2010, a major piece of
legislation. The Act also created a new Public Sector Equality Duty, which came into
force on the 5th April 2011. There is a General duty, described in 12.2, that public
bodies must meet, underpinned by more specific duties which are designed to help
meet them.
12.2
In line with the Public Sector Equality Duty, public bodies must, in the exercise of its
functions, give due regard to the need to eliminate discrimination, harassment,
victimisation, to advance equality of opportunity and foster good relations between
those who share a protected characteristic and those who do not.
12.3
This land is offering potential for new housing that will benefit the wider community.
Amongst the community there may be those who exhibit a protected characteristic .
The proposed sale of this land has potential positive equality implications for the
community. This land sale offers potential for new housing that should benefit the wider
community. Amongst the community there may be those who exhibit a protected
characteristic. If Section 106 criteria is applied to the sale, then this could further
provide benefits to the wider Royston community.
13.
SOCIAL VALUE IMPLICATIONS
13.1
As the recommendations made in this report do not constitute a public sector contract,
the measurement of “social value” as required by the Pubic Services (Social Value) Act
2012 need not be applied, although equalities implications and opportunities are
identified in the relevant section at Paragraph 12.
14.
HUMAN RESOURCE IMPLICATIONS
14.1
There are no Human Resource implications from this report.
15.
APPENDICES
15.1
Appendix 1 - Location Plan for identification purposes only.
16.
CONTACT OFFICERS
16.1
David Charlton, Senior Estates Surveyor, 01462 474320 david.charlton@northherts.gov.uk
16.2
Marie Searle, Property Solicitor, 01462 474218 marie.searle@north-herts.gov.uk
16.3
Tim Neill, Accountancy Manager, 01462 474461 tim.neill@north-herts.gov.uk
16.4
Fiona Timms, Risk Manager, 01462 474251 fiona.timms@north-herts.gov.uk
16.5
Reuben Ayavoo, Policy Officer, 01462 474212 reuben.ayavoo@north-herts.gov.uk
CABINET (28.1.14)
17.
BACKGROUND PAPERS
17.1
Freehold registered title No. HD497369.
17.2
GVA marketing details.
17.3
Planning Statement.
CABINET (28.1.14)