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11.1 |
The Executive Director, Place submitted a report seeking approval for the Council to commence delivery of the first phase of the Sheffield Retail Quarter development on the site of the former Grosvenor Hotel block as shown on the plan attached to the report (hereinafter referred to as the HSBC/Retail Block), and to work with its Strategic Development Partner to work up a deliverable and commercially viable wider Sheffield Retail Quarter scheme. |
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11.2 |
RESOLVED: That Cabinet:- |
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(a) |
approves the strategy outlined in this report for the delivery of the next stage of the Sheffield Retail Quarter to December 2017; |
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(b) |
delegates authority to the Executive Director, Place in consultation with the Cabinet Member for Business and Economy, the Cabinet Member for Finance & Resources, the Acting Executive Director of Resources, the Director of Legal & Governance; and the Director of Capital and Major Projects, to:
• Negotiate and agree the terms of an Agreement for Lease and Lease with HSBC for their new office development within the Sheffield Retail Quarter site and all other necessary legal documentation consistent with the contents of this report as he believes are reasonable in all circumstances
• Negotiate, and agree the terms of an Agreement for Lease(s) for the retail units within the HSBC/Retail Block and all other necessary legal documentation
• Submit detailed a planning application for the development of the HSBC/Retail Block and adjoining public realm improvement works and to secure all necessary consents to enable delivery to proceed.
• Continue the appointment of the full professional team to undertake detailed design work on the HSBC/Retail Block and the Sheffield Retail Quarter public realm improvement works and to progress the wider Sheffield Retail Quarter planning permission.
• Procure construction services and enter into contracts for pre-construction services for the Sheffield Retail Quarter development in accordance with the Councils usual procurement process and any applicable laws relating to procurement with contract values not exceeding the project financial authority
• Commission and agree terms with any other specialist consultants to advise the Council as necessary throughout the course of the Sheffield Retail Quarter project
• Upon completion of the Agreement for Lease and Lease with HSBC to let the construction contract(s) for the development of the HSBC/Retail Block and the public realm improvement works together with any retail/food and beverage kiosks/units, subject to the Councils usual procurement process and any applicable laws relating to procurement with the total cost not exceeding the project authority
• Negotiate, agree and enter into conditional Agreement for Lease(s) and Lease(s) for the remainder of the retail units within the Sheffield Retail Quarter together with all other associated office residential food and beverage and leisure units
• Determine the most appropriate disposal strategy for the Council and if necessary sell the whole or any part of the HSBC/Retail Block as an investment and if necessary use the Councils covenant to underwrite the financial viability
• Amend the Councils VAT Partial Exemption reporting policy to maximise the recovery of VAT on expenditure relating to the HSBC/Retail Block and liaise with HMRC accordingly.
• To instruct the Director of Legal & Governance to complete all necessary legal documentation required to document the terms of any transactions agreed in accordance with the approvals delegated pursuant to this report.
Subject to compliance with the Councils budget processes, financial regulations and Capital Approval processes. |
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(c) |
That in the absence of the Executive Director of Place due to annual leave or illness, the Director of Capital and Major Projects is authorised to exercise the powers given to the Executive Director of Place by Cabinet in this report; |
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(d) |
approves:-
• The budget as set out in this report to deliver the HSBC/Retail Block and all necessary public realm improvement works of up to a maximum of £90m.
• For this budget to be funded through Prudential Borrowing and be subject to the phasing of the spend going through the Council Capital Approval process,
• To earmark any business rates uplift to repay any balance of the Prudential Borrowing, and
• The application for Sheffield City Region Investment Fund (SCRIF) funding to be applied in accordance with any obligations or restrictions that the funding is subject to. |
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(e) |
approves the additional £35.8m budget as set out in this report to progress the wider Sheffield Retail Quarter development up to December 2017, to be funded through Prudential Borrowing; and |
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(f) |
delegates authority to the Acting Executive Director of Resources in consultation with the Executive Director, Place to approve the release of the budget on the satisfactory completion of each of the relevant milestones. |
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11.3 |
Reasons for Decision |
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11.3.1 |
As outlined in the Report, there is a still a very clear strategic and economic case to justify the Sheffield Retail Quarter development, and in order to maintain project momentum given that there is now a major office tenant to accommodate the Council will need to continue to act as developer/investor until such time as the scheme will be ready for the investment market. This will be when the Council has completed the designs, obtained construction tenders and achieved a required level of pre-lets to secure an income stream. |
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11.3.2 |
The reasons for the recommendations are to provide a way forward for the Council to deliver the Sheffield Retail Quarter. |
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11.4 |
Alternatives Considered and Rejected |
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11.4.1 |
The do nothing option i.e. cease both the delivery of the first phase (the HSBC/Retail block) and work on the wider Sheffield Retail Quarter scheme has been considered, but has many negative outcomes for the Council. |
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11.4.2 |
The status of the City Centre will continue to diminish, the Council’s long term economic aspirations for the City and the city centre will become less feasible, there will be a lack of confidence for other projects and the reputation of both the City and Council will also suffer. |
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11.4.3 |
The Council will also make a loss if the Sheffield Retail Quarter is not delivered as its investment to date in working up the scheme will be lost. |
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11.5 |
Any Interest Declared or Dispensation Granted |
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None |
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11.6 |
Reason for Exemption if Public/Press Excluded During Consideration |
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None |
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11.7 |
Respective Director Responsible for Implementation |
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Simon Green, Executive Director, Place |
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11.8 |
Relevant Scrutiny and Policy Development Committee If Decision Called In |
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N/A |
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