37 Wimpole Street redevelopment

Transcription

1 Item 13 Council 26 and 27 September Wimpole Street redevelopment Purpose of paper Action Public / Private Corporate Strategy Business Plan 2012 Decision Trail Recommendations Authorship of paper and further information Appendices To propose a business case for the development of the GDC s premises at 37 Wimpole Street For decision Public Manage our resources in accordance with good governance Plan redevelopment of Wimpole Street Financial & Business Planning Advisory Committee (F&BPAC) meeting 18 April 2012, noted that the GDC had received full planning permission [on 1 March 2012] and approved a recommendation to the Council that detailed proposals should be prepared in relation to the re-development of 37 Wimpole Street. Council meeting 17 May 2012 approved that detailed; costed proposals should be prepared in relation to the re-development of 37 Wimpole Street. F&BPAC meeting 5 September 2012, unanimously agreed to recommend to the Council the business case for the development of the GDC s premises at 37 Wimpole Street. The Council is invited to consider and approve the business case for redevelopment of the GDC s premises at 37 Wimpole Street Graham Masters, Director of Finance & Corporate Services, gmasters@gdc-uk.org All annexes below are published on the extranet Annex 1: Feasibility Study Annex 2: Summary redevelopment drawing Annex 3: Summary redevelopment elevation drawing Annex 4: Redevelopment summary time line Annex 5: Redevelopment cost summary Page 1

2 Executive Summary 1. This paper proposes a business case for the re-development of 37 Wimpole Street as part of a long-term premises strategy for the GDC. The existing lease on 37 Wimpole Street does not expire until 2057 and is held on a peppercorn rent of 5,050 per annum, making the redevelopment of the premises a strong option in meeting the long term accommodation needs of the GDC. 2. A study that confirms the feasibility of the redevelopment project within a nine-month planning and 18-month construction timeframe and for the previously advised cost of 6.0m including VAT is at Annex 1. Landlord consent for the redevelopment work has been received verbally and the operating management statement, required by Westminster Council, has been approved by its Planning Committee. The proposal assumes that detailed planning would start immediately, with building works following from April In cash flow terms, 2.0m is budgeted to be spent in 2013, with the balance due to be incurred in The business has been reviewed in detail by the Finance and Business Planning Advisory Committee (F&BPAC) and it recommends its approval to the Council The current accommodation situation 4. At present, the GDC has premises at 37 Wimpole Street, 44 Baker Street in Central London and in Croydon [The premises meet the current needs of the Dental Complaints Service, with a staff complement of 10]. The Wimpole Street and Baker Street premises can reasonably accommodate some 197 desks in their current layouts; however it has been necessary to convert a number of meeting rooms to staff desk space to facilitate extra staff. 5. Currently there are around 205 staff accommodated in cramped conditions. This situation is unsustainable beyond the short term. By early 2013 there will be 222 staff, necessitating the conversion of further meeting rooms at Baker Street to desk space and an urgent need to rent further, short term accommodation (to accommodate the new in-house legal team), pending completion of the proposed redevelopment of 37 Wimpole Street in the autumn of The proposed redevelopment of 37 Wimpole Street will accommodate up to 240 staff, two hearing suites and a Council chamber in its proposed configuration, along with providing an acceptable number of meeting rooms. 6. If the redevelopment of 37 Wimpole Street is not progressed in 2013, there will be a need to rent additional premises to improve the current environment for staff. The estimated set up cost of accommodating up to 45 staff to relieve the cramped conditions in 2013 are 250,000 and annual occupation costs estimated at 430,000 per annum. Proposed redevelopment Introduction and background 7. In accordance with the GDC s Estate strategy, an application for planning permission for the re-development of 37 Wimpole Street and the attached Wimpole Mews building [Wimpole Street] was submitted in September The application was approved by Westminster Council in March 2012 and the required Operating Management Statement 1 has now been approved by the Westminster Council Planning Committee. A planning application for nonmaterial amendments has subsequently been submitted, following review of the feasibility study, to make minor revisions to some of the toilet facilities and other sundry adjustments. This is currently being considered by Westminster Council s Planning Committee. 1 An Operating Management Statement which described the use the building will be put to, working hours, out of hours working, access control etc, is required to comply with planning condition 18. Page 2

3 8. The Council asked at its meeting on 17 May 2012 for a costed proposal for redevelopment of 37 Wimpole Street to be prepared for consideration in September Key assumptions have been used in arriving at a fully costed proposal: a. Continued requirement 2 for an average of five, Fitness to Practise hearing suites. b. GDC staff numbers will remain within a headcount range of 200 to 250 for the next five years. c. Costs are based on currently available figures or estimates based on information and assumptions as noted. 10. It is not envisaged that Wimpole Street will accommodate all the GDC s needs in relation to Fitness to Practise hearings. 11. The conditional planning consent requires that building works start by 28 February In addition the landlord s [the Howard de Walden Estate] consent is necessary and has been obtained verbally. This contains a requirement for the work to be completed within a threeyear time frame likely to begin at latest from 1 October [The normal time frame allowed by the Howard de Walden Estate is 18 months; however, we have succeeded in obtaining an extension, due to the complicated nature of the works]. This three-year time frame includes nine months planning time, allows 18 months for the actual redevelopment works and a contingency of nine months for unforeseen delays and completion of all sign-offs. 12. The options previously considered by the Council in line with the GDC s Estate Strategy were: A. Do nothing: Continue with Wimpole Street, as is, providing two hearing suites [including Council Chamber], continue the lease on 44 Baker Street and rent up to three external hearing suites. B. Redevelop Wimpole Street as per planning permission: Wimpole Street to be redeveloped, including four hearing suites, lease on 44 Baker Street continues and rent one external hearing suite. C. Redevelop Wimpole Street but with only one hearing suite [including Council Chamber]: This would enable the lease on 44 Baker Street to be discontinued (all staff moving to Wimpole Street), but there would be the need to rent up to four external hearing suites. D. Redevelop Wimpole Street but with only one hearing suite: As for C above, with a negotiated lease extension with the landlord, the Howard de Walden Estate. As a starting point to date, the only review of options for changing or surrendering the Wimpole Street lease was carried out in 2006, and contained in a report from Godfrey Vaughan, Chartered Surveyors. If this option is selected, further work will need to be undertaken to update the conclusions of that report. E. Relocate within central London: New office to accommodate all GDC staff, to tie in with 44 Baker Street lease break clause in 2016, to include (or separately rent) up to five hearing suites. This option (and the two below) would depend on ability to achieve sufficient value for the current lease on Wimpole Street. F. Relocate within central London with hearings relocated outside London: New office to accommodate all GDC staff, to tie in with 44 Baker Street lease break clause in 2016 and separately rent up to five hearing suites but outside of London. 2 The Law Commission has recently proposed that the adjudication of Fitness to Practise cases might be handled through the Joint Tribunals Service. Should this proposal be implemented, the GDC might be relieved of the need to provide premises for hearings, although it is most likely that it would have to cover the costs of independent adjudication. Page 3

4 G. Relocate elsewhere in UK: Office to accommodate all GDC staff, to include (or separately rent) up to five hearing suites, to tie in with 44 Baker Street lease break clause in This would involve no London presence for the GDC. 13. A financial summary as presented to the Council in May 2012, for the seven options above is given below. Given the nature of the project, with time scales extending out to 2057 when the Wimpole Street lease expires; the projected cash flows become more uncertain the further into the future one looks. In addition, when establishing project Net Present Values [NPV, ie current value of future cash flows], 20 years is regarded as the limit that can sensibly be valued by this method. The discount rate used to establish NPVs is 5.0% Option [All figures in this table exclude VAT] One off costs 2012/16 m Wimpole St Lease surrender receipt m NPV*** Over 20 Years m Spend over 45 years m A Do nothing B Redevelop Wimpole Street as per planning permission C Redevelop Wimpole Street but with only one hearing suite D Redevelop Wimpole Street, but with only one hearing suite, with lease extension E Relocate within central London F Relocate within central London, with Hearings relocated outside London G Relocate elsewhere in UK *** Net Present Value, using a discount rate of 5.0% 14. The option developed in detail is Option C. This involves the redevelopment of Wimpole Street but with a reduced number of hearing suites: This would accommodate all GDC staff, enable 44 Baker Street lease break clause to be exercised in 2016; and with up to four external hearing suites continuing to be rented. For Staff would be located in one building 44 Baker Street lease break clause could be exercised in 2016, achieving significant saving [in excess of 0.4m pa] Future opportunity to increase or decrease Against Not completely in line with planning permission, may be an issue with condition 18 [see Legal implications below] Need to procure additional, external Fitness to Practise hearing space Page 4

5 For the number of hearing suites Opportunity to develop site to an improved BREEAM accreditation Against Development proposals 15. The proposed work at 37 Wimpole Street consists of both new-build extensions coupled with internal reorganisation and refurbishment of the existing building. The new build extensions provide an increase in floor space of approximately 340m 2 (3670ft 2 ) which represents an additional 14% floor space. This coupled with the internal re-organisation, which will provide more efficient use of space, has increased the net useable floor area by over 20%. A key factor in the re-organisation of the building is the need for increased ease of access. A clear route has been formed through the building with a central circulation point. The combination of internal re-organisation and the additional space created will provide sufficient useable floor area to accommodate the GDC s projected headcount range of 200 to 250 for the next five years. The total cost of the redevelopment is projected at 6.0m including VAT, see Annex The intended works broadly consist of the following: New build: a. New mansard roof extension to create fifth floor to Wimpole Street. b. New mansard roof extension to create a second floor to Wimpole Mews. c. Central infill extension between the main 37 Wimpole Street and Wimpole Mews. Demolition, in order to construct the extensions the following demolitions will need to take place: d. Plant at fifth floor roof level of Wimpole Street including, existing concrete covered walkway and sloping roof. e. Entire existing roof structure to Wimpole Mews building (ceiling height at existing first floor level to be lowered in order to accommodate the extra storey). f. Demolition of existing two storey central link building and domed lead structure. 17. In addition, significant internal refurbishment is proposed throughout the building. Following a recent review of the existing services, carried out by a specialist consultant, it is evident that the building requires a complete overhaul of the electrical/mechanical services in order to provide new heating/cooling provision, new lighting and electrics provision, new data distribution and replacement plumbing. For this reason, it will also be necessary to update internal finishes. 18. The feasibility study indicates that staff currently located at 37 Wimpole Street would be able to remain on site during the redevelopment process. This would be achieved as follows: a. By April 2013 Hearings would have vacated, so that all Hearings are carried out at external venues. b. By June 2013, arrangements would ensure that staff are restricted to the Ground, 1st 2nd and 3rd Floors of Wimpole Street Building. The Ante Gallery, Bradlaw Suite and the Lower Ground Floor would be restricted areas for access by contractors only. c. Phase 1, Stage 1 - a protective roof would be. This serves to protect the areas ready for the demolition and construction work. Temporary mechanical and electrical services would also be installed to serve occupied space (Ground to 3rd floors of Wimpole Street) whilst works are carried out. Page 5

6 d. Phase 1, Stage 2 the Quiet Demolition of the 5th floor roof to the Wimpole Street Building and the Bradlaw (Mews Building) would be undertaken. Also during this phase, quiet demolition/ removal of the Link Extension (Ante Gallery and Council Chamber) would be carried out. e. Phase 1,Stage 3 - New Raft foundations would be constructed beneath the Link Extension and structural elements erected (e.g Upper part of Mews Building (ex Bradlaw) and Wimpole Street Building) New M&E installation would be completed to Lower Ground of Wimpole Street and the Mews Building. There then follows the internal fit out to Lower Ground Floor Wimpole Street and Mews Buildings. f. Phase 1A, Stage 1 the Ground, 1st, 2nd and 3rd floors would be vacated ready for the refurbishment to this area. Staff would relocate to the Mews Building and infill Building [ex Ante Gallery and Council Chamber] this area will have been subject to new build and fitted out. g. Staff would return to the Wimpole Street Ground to 5th floors when these areas had been refurbished. 19. Staff would be fully briefed on the forthcoming works. A new Section on the GDC Intranet dedicated to keeping staff informed of the progress of the project would be set up. A Project Management company would be appointed which, in liaison with the Head of Facilities and our architects would further explain to staff the key aspects of the construction and assist with minimising disruption. Risk implications 20. A failure to manage effectively the requirements of GDC s future accommodation carries very significant risks. These will be mitigated through a full risk analysis of the preferred option as set out in this paper. 21. The redevelopment plan assumes that staff currently located at 37 Wimpole Street will be able to remain on site during the redevelopment process. The feasibility study confirms that this will be practical but key measures will have to be taken to avoid any adverse impact on the efficiency of operational activities. Amongst the measures will be a careful choice of the construction company and a project management company used to working on large projects with staff in situ. Public protection implications 22. Any unmanaged disruption to the GDC s functions arising from this premises strategy could impact unfavourably on public protection, eg a failure to procure adequate Fitness to Practise hearing facilities. Equality and diversity implications 23. GDC current premises have been configured to minimise any adverse equality and diversity implications, within the constraints of the physical buildings occupied. Any redevelopment would be seeking to attain improved BREEAM accreditation [Building Research Establishment Environmental Assessment Method for buildings], improving equality and diversity implications. The equality and diversity implications of GDC operation activities are included within departmental environmental impact assessments (EIA) and therefore an EIA for the redevelopment of 37 Wimpole Street has not been prepared, relating to departmental activities. A full EIA for any proposal to relocate out of Central London would need to be undertaken. Page 6

7 Policy and Communications implications 24. There are no policy implications at present. 25. The ultimate decision of the Council will need to be communicated clearly to registrants, with clear justifications for any investment. It will also be necessary to communicate clearly from the outset with staff to avoid any undue unease about a potential change of work location. 26. In addition it will be important to communicate with Westminster Council and also our neighbours in Wimpole Street and Wimpole Mews, to minimise any complaints and potential disruption to the redevelopment project. Legal implications 27. The GDC has received full planning permission for the redevelopment of 37 Wimpole Street, although this permission is subject to a number of restrictions with which the GDC will comply. The use of the whole of the buildings shall thereafter be carried out in accordance with the approved Operational Management Strategy. It will therefore be very important to ensure that the development proposals reflect the GDC s needs whilst remaining in compliance overall with the planning permission awarded. Resource implications 28. The potential resources associated with each proposal in this paper are set out at paragraphs 15 to 19 above. Recommendations 29. The Council is invited to consider and approve the business case for redevelopment of the GDC s premises at 37 Wimpole Street. Page 7