{meta} Agenda for Property / Regeneration Briefing on Monday, 23 May 2022, 3.00 pm

Agenda and decisions

Venue: Salford Suite, Salford Civic Centre, Chorley Road, Swinton. View directions

Contact: Mike Relph, Senior Democratic Services Advisor 

Items
No. Item

1.

Apologies for absence

2.

Declarations of interest

3.

Items for Decision - Part 1 (Open to the Public)

3a

Chapel Wharf Development Framework pdf icon PDF 309 KB

Additional documents:

Decision:

Salford City Council - Record of Decision

 

I John Merry, Deputy City Mayor, in exercise of the powers contained within the City Council Constitution do hereby approve:

 

1.    That the Chapel Wharf Development Framework be endorsed as a material planning consideration for future planning decisions.

The Reasons are:

 

  1. Unlike adjacent areas, there is a clear lack of a cohesive vision for the Chapel Wharf area. This is in a large part due to the area previously not being covered by a formal framework.

 

  1. Without a clear vision and strategy to guide future development and investment, the full potential of the area and individual opportunities will not be exploited.

 

  1. To encourage development momentum, investment and strategic growth opportunities.

 

  1. To guide development and infrastructure interventions, ensuring that the area becomes a successful and vibrant community, playing its role in the ongoing transformation of City Centre Salford.  

 

Options considered and rejected were:

Not to prepare a development framework.  However, this was rejected.  The decision being to prepare the Chapel Wharf Development Framework.  This was on the basis that this will not be a statutory planning document, however it will become a material consideration for the City Council as the Local Planning Authority upon adoption. 

 

Assessment of Risk: Low

 

The Development Framework will act as key additional guidance for the delivery of new development across the area.

 

The council only has a small amount of land ownership in the area and is not under any obligation through this framework to make commercial commitments towards any of the interventions identified.

 

However, opportunities may arise throughout the life of the framework for land assembly, working in conjunction with developers to bring forward new zones of development.  Any such proposals will be brought forward for approval at the appropriate time.

 

The Council will also seek to identify funding to bring forward infrastructure interventions established in the framework such as those identified as ‘Catalyst Projects’.

 

Legal Advice obtained:  Robert Irvine

The Framework, once endorsed by Lead Member for Housing, Property & Regeneration will become a material consideration for the City Council as Local Planning Authority.

Financial Advice obtained:  David Mills

 

The report details the need for a Development Framework for the Chapel Wharf area and at this stage there are no financial implications.

 

Procurement Advice obtained: N/A

 

HR Advice obtained: N/A

 

Climate Change Advice obtained: Mike Hemingway

 

The Development Framework objectives have been written with the need to create an environmentally sustainable neighbourhood in mind, specifically in terms of how people arrive and move around the area, the energy efficiency of new developments and also measures to improve climate resilience through SUDs and flood mitigation measures along the River Irwell. A Strategic Environmental Assessment (SEA)/Sustainability Appraisal (SA) Screening Statement was produced for the emerging Development Framework in September 2021(Annex E).  This Screening Statement concluded that an SEA/SA was not required in connection with the Chapel Wharf Development Framework.

 

The following documents have been used to assist the decision process:

Report of Strategic Director for Place 23rd  ...  view the full decision text for item 3a

4.

Public Briefing Items

The following items are for the primary purpose of providing members of the public with all relevant information on the respective matters, other than those elements, which in accordance with the relevant sections of the Local Government Act 1972, remain confidential and require that any arising decision is taken in Part 2 of the agenda.

 

4a

Land at Ontario Basin pdf icon PDF 266 KB

4b

2 New Bailey Letting of 8th Floor pdf icon PDF 243 KB

5.

Exclusion of the Public

6.

Items for Decision - Part 2 (Closed to the Public)

6a

Land at Ontario Basin pdf icon PDF 200 KB

Additional documents:

Decision:

Salford City Council - Record of Decision

 

I, Councillor John Merry, Deputy City Mayor, in exercise of the powers contained within the City Council constitution do hereby:

 

  1. Approve the updated and provisionally agreed revised Heads of Terms to the Agreement for Lease followed by Lease on the Phase 1 land at Ontario Basin.

 

  1. Note that the Heads of Terms for the Option to Purchase the Phase 2 land at Ontario Basin, as approved on the 23rd August 2021, remain unchanged.

 

  1. Delegate authority to the Strategic Director of Place and the Section 151 officer to negotiate and finalise the commercial arrangements and all other necessary ancillary agreements to allow the completion of the arrangements as detailed in this report

 

  1. Authorise the City Solicitor to progress and complete the associated legal formalities and the taking of all steps required to give effect to the above recommendations.

 

The Reasons are on the 11th January 2021 the City Council agreed to enter into a Memorandum of Understanding Agreement and Exclusivity Agreement with the proposed purchaser with the objective of collaboratively formulating development proposals for land at Ontario Basin, Salford Quays.

 

The agreements were to allow the parties to explore the opportunity for the potential development of the site part of which is owned by the Council with part held by way of a long lease by a third party.

 

The parties agreed to a timeframe of 6 months, effective from the date of execution of the agreements (18th February 2021).

 

The parties progressed constructive negotiations and on the 23rd August 2021 the City Mayor approved Head of Terms for the grant of an Agreement for Lease followed by a lease over Phase 1 of the site and an associated Option to Purchase  on Phase 2.

 

Due to challenging economic conditions, specifically build cost inflation, the proposals for the Phase 1 which underpinned the commercial transaction have proved to be financially undeliverable and the shared view of the parties is that conditions are unlikely to improve sufficiently over the short to medium terms to make the initially proposed scheme viable.

 

In response the parties have engaged in a productive dialogue and collaboratively developed an alternative Phase 1 scheme which is considered to be less exposed to build cost inflation and has a much better prospect of being delivered. It also reflects the ongoing discussion/ position on the Phase 2 part of the site.

 

The resultant scheme changes and need for greater flexibility around delivery timescales and planning risk have necessitated fresh Heads of Terms to be negotiated and for which approval is now sought.

 

 

Assessment of Risk: Medium

 

Source of funding:  n/a

 

Legal Advice Obtained: Addleshaw Goddard, The City Solicitor And The Shared Legal Service

 

Procurement Advice Obtained: n/a

 

Financial Advice obtained:  Chris Mee - Strategic Finance Manager

 

HR Advice obtained: n/a

 

Climate Change Advice obtained: n/a at this stage

 

The following documents have been used to assist the decision process:

Public briefing report submitted to  ...  view the full decision text for item 6a

6b

2 New Bailey Letting of 8th Floor pdf icon PDF 199 KB

Additional documents:

Decision:

Salford City Council - Record of Decision

 

I, Councillor John Merry, Deputy City Mayor for Property in exercise of the powers contained within the Salford City Council constitution do hereby:

 

1           Ratify the completion of the lease for part 8th Floor at 2 New Bailey  to

             Cellnex UK Ltd and on the terms agreed.

2          Approve the payment of a capital sum totaling £25,259.11 by the City Council to facilitate the letting as detailed in the report.

3          Approve the payment of the Council’s surveyor’s costs of £1,500 in approving the fit out works carried out by the tenant

 

The Reasons are:

This letting will generate a rental income for the Council that will provide a return on the substantial capital investment that the Council made in funding the development and in leasing the building

This letting, combined with the previous lettings to Berryman’s and Eversheds Sutherland, means 6 floors of the building are now fully let with 3 floors remaining. 

Assessment of Risk: Low 

The source of funding is: The letting will generate a rental income stream, service charge income and business rates for the City Council

 

Legal comments Supplied by:  Rebecca Maddison Shared Legal Service (Property)

There are no adverse legal implications with regards to the proposed disposal provided that the disposal is at market value and constitutes the best consideration reasonably obtainable this will satisfy the requirements of Section 123 of the Local Government Act 1972

 

Financial implications Supplied by:  Chris Mee Strategic Finance Manager

In approving this project in May 2017, Cabinet took into account the risks associated with the scheme and the mitigations in place to manage those risks. The decision to approve the project was taken on the basis that members were comfortable with the cautious financial scenario outlined in the report considered.

The proposed terms to be offered to Cellnex UK outlined in this report would be an improvement to this cautious scenario and would if approved reduce the financial risk being taken by the council on this project.

The terms have been structured to ensure rental income form the council from day one to reflect the covenant strength of the tenant and its position as a UK entity of a larger Spanish based company.

Procurement advice Supplied by: Anthony Hilton, Strategic Head of Procurement

There are no additional procurement implications within the detail of this report

HR advice obtained: n/a

Climate Change advice: This is a CAT A building and is fully compliant with all current Building Regulation requirements.

The following documents have been used to assist the decision process: Public briefing report submitted to Property/Regen Briefing on 23 May 2022

 

Contact Officer: Stephanie Mullenger, Strategic Asset Consultant                            

Telephone number:07810 158682

 

This decision is not subject to consideration by another lead member or strategic director.

 

The appropriate scrutiny committee to call-in the decision is the Growth and Prosperity Scrutiny Panel.

 

 

Signed: Councillor John Merry

Deputy City Mayor

Date: 23 May 2022 

 

 

This decision was published on Tuesday 24 May  ...  view the full decision text for item 6b

7.

Any other business