Agenda item

West Bar Square Potential Investment Partner

Report of the Executive Director, Place.

Decision:

16.1

The Executive Director, Place, submitted a report to seek approval to the City Council entering into an agreement with a major financial institution which would deliver over £150 million of new investment into the West Bar Square development in the City Centre.

 

 

16.2

RESOLVED: That Cabinet:- 

 

 

 

(a)

notes the Executive Director, Resources, advice in the Financial Implications contained in section 5.2 and in the closed Part 2 to the report;

 

 

 

 

(b)

approves the proposals set out in the report and the terms of the proposed agreement as explained in the closed Part 2 to the report;

 

 

 

 

(c)

delegates authority to the Executive Director, Place, in consultation with the Executive Director, Resources and the Director of Legal and Governance, to agree the terms of the agreement and the terms of any other documentation required; and

 

 

 

 

(d)

delegates authority to the Director of Legal and Governance to complete such legal documentation as she considers necessary or appropriate on such terms as she may agree to give effect to the proposals set out in the report and generally to protect the Council’s interests.

 

 

 

16.3

Reasons for Decision

 

 

16.3.1

The proposed agreement with Legal and General and Urbo outlined in the report will secure over £150 million of new investment into the City Centre. This will deliver a substantial first phase of development at West Bar Square totalling 200,000 sq ft of new Grade A offices, 345 private rented apartments, a multi storey car park and new high quality public realm.

 

 

16.3.2

This represents a massive sign of confidence in the future of the city and will generate major economic, environmental and social benefits as well as new business rates and Council Tax receipts to the Council.

 

 

16.3.3

Based on evidence from other cities where Legal and General are investing on a similar basis, it is considered likely that the Council agreeing to enter into the proposed agreement will stimulate further substantial investment by Legal and General in future years.

 

 

16.3.4

The proposals are commercially sensible for the Council and comply with statutory obligations.

 

 

16.4

Alternatives Considered and Rejected

 

 

16.4.1

The Council could simply do nothing to try to bring this development forward and leave it entirely to Urbo to negotiate development finance. It is quite possible that the market is strong enough to support this and the scheme would still be delivered over time. However, there is no doubt that this would take considerably longer to achieve than what is being proposed.

 

 

16.4.2

If this approach were to be taken, then the significant economic, environmental and social benefits to the city set out in the report would take longer to materialise. The same would apply to the financial benefits accruing to the Council from new business rates and Council Tax.

 

 

16.4.3

As described briefly in paragraph 5.3.5 of the report, it might be possible to negotiate similar lease terms with an alternative investor on a standalone office building. However, if this was to be done, it is highly unlikely that the wider development would be brought forward at the same time. As with the do nothing option, this would result in delays to the delivery of the wider benefits.

 

 

16.5

Any Interest Declared or Dispensation Granted

 

 

 

None

 

 

16.6

Reason for Exemption if Public/Press Excluded During Consideration

 

 

 

None

 

 

16.7

Respective Director Responsible for Implementation

 

 

 

Laraine Manley, Executive Director, Place

 

 

16.8

Relevant Scrutiny and Policy Development Committee If Decision Called In

 

 

 

Economic and Environmental Wellbeing

 

Minutes:

16.1

The Executive Director, Place, submitted a report to seek approval to the City Council entering into an agreement with a major financial institution which would deliver over £150 million of new investment into the West Bar Square development in the City Centre.

 

 

16.2

RESOLVED: That Cabinet:- 

 

 

 

(a)

notes the Executive Director, Resources’ advice in the Financial Implications contained in section 5.2 and in the closed appendix to the report;

 

 

 

 

(b)

approves the proposals set out in the report and the terms of the proposed agreement as explained in the closed appendix to the report;

 

 

 

 

(c)

delegates authority to the Executive Director, Place, in consultation with the Executive Director, Resources and the Director of Legal and Governance, to agree the terms of the agreement and the terms of any other documentation required; and

 

 

 

 

(d)

delegates authority to the Director of Legal and Governance to complete such legal documentation as she considers necessary or appropriate on such terms as she may agree to give effect to the proposals set out in the report and generally to protect the Council’s interests.

 

 

 

16.3

Reasons for Decision

 

 

16.3.1

The proposed agreement with Legal and General and Urbo outlined in the report will secure over £150 million of new investment into the City Centre. This will deliver a substantial first phase of development at West Bar Square totalling 200,000 sq ft of new Grade A offices, 345 private rented apartments, a multi storey car park and new high quality public realm.

 

 

16.3.2

This represents a massive sign of confidence in the future of the city and will generate major economic, environmental and social benefits as well as new business rates and Council Tax receipts to the Council.

 

 

16.3.3

Based on evidence from other cities where Legal and General are investing on a similar basis, it is considered likely that the Council agreeing to enter into the proposed agreement will stimulate further substantial investment by Legal and General in future years.

 

 

16.3.4

The proposals are commercially sensible for the Council and comply with statutory obligations.

 

 

16.4

Alternatives Considered and Rejected

 

 

16.4.1

The Council could simply do nothing to try to bring this development forward and leave it entirely to Urbo to negotiate development finance. It is quite possible that the market is strong enough to support this and the scheme would still be delivered over time. However, there is no doubt that this would take considerably longer to achieve than what is being proposed.

 

 

16.4.2

If this approach were to be taken, then the significant economic, environmental and social benefits to the city set out in the report would take longer to materialise. The same would apply to the financial benefits accruing to the Council from new business rates and Council Tax.

 

 

16.4.3

As described briefly in paragraph 5.3.5 of the report, it might be possible to negotiate similar lease terms with an alternative investor on a standalone office building. However, if this was to be done, it is highly unlikely that the wider development would be brought forward at the same time. As with the do nothing option, this would result in delays to the delivery of the wider benefits.

 

 

 

Supporting documents: