DELEGATED POWERS REPORT NO. 701 SUBJECT: Former Friern Barnet Sewage Works at Pinkham Way Control sheet All of the following actions MUST be completed at each stage of the process and the signed and dated report MUST be passed to Democratic Service for publishing All reports 1. Democratic Services receive draft report Name of DSO Nick Musgrove Date 25/11/08 2. Democratic Services cleared draft report as being constitutionally appropriate 3. Finance clearance obtained (report author to complete) 4. Staff and other resources issues clearance obtained (report author to complete) 5. Trade Union response received (Staffing issues only) 6. Legal clearance obtained from (report author to complete) 7. Policy & Partnerships clearance obtained (report author to complete) 8. Equalities & Diversity clearance obtained (report author to complete) 9. The above process has been checked and verified by Director, Head of Service or Deputy (report author to complete) 10. Signed & dated report, scanned or hard copy received by Democratic Services for publishing 11. Report published by Dem Services to website Officer reports: 12. Head of Service informed report is published and can be implemented. Name of DSO Maria Lugangira Date 27/11/08 Name of Fin. officer Sue Templeman Date 26/11/08 Name of Res. officer Geoff Collins Date 21/11/08 Name of TU rep. N/A Date Name of Legal officer (i) Trowers & Hamlin (ii) Sheila Saunders Date 28/11/08 Name of P&P officer Andrew Nathan Date 25/11/08 Name of officer Julie Pal Date 25/11/08 Name Helen Gardiner Date 27/11/08 Name of DSO Maria Lugangira Date 01/12/08 Name of DSO Maria Lugangira Date 02/12/08 Name of DSO Maria Lugangira Date 02/12/08 Cabinet Member reports: 13. Expiry of call-in period Date 9/12/08 14. Report circulated for call-in purposes to COSC Name of DSO Maria Lugangira members & copied to Cabinet & Head of Service Date 2/12/08 1
ACTION TAKEN BY CABINET MEMBER(S) UNDER DELEGATED POWERS (EXECUTIVE FUNCTION) Subject Cabinet Member(s) Former Friern Barnet Sewage Works at Pinkham Way Leader and Cabinet Member for Resources Date of decision 28 November 2008 Date decision comes into effect 9 December 2008 Summary Officer Contributors Status (public or exempt) Wards affected Enclosures Reason for exemption from call-in (if appropriate) To seek approval to amend terms for the sale of this site. Geoff Collins, Property Services Public with separate exempt section Outside Borough Appendix A site plan Not Applicable Contact for further information: Geoff Collins, Property Services. 0208 359 7368 Geoff.collins@barnet.gov.uk Serial No. 701 2
1. RELEVANT PREVIOUS DECISIONS 1.1 Policy and Implementation Committee 21.1.99 considered the negative outcome of the Council s application to Haringey for outline planning permission for residential development of the land and instructed officers to invite tender bids for the purchase and development of the land from a selected list of tenderers. 1.2 Policy and Implementation Committee 15.9.99 considered the results of the tender invitation and approved the acceptance of the subject to planning bid from Costco. 1.3 Cabinet 16.7.01 (Decision No. 21) agreed to sell the freehold interest in the land to B&Q at an adjusted industrial land value with a top-up payment if planning permission for a retail store was obtained. 1.4 Cabinet Resources Committee 20.2.03 (Decision no. 4) considered a revised acquisition offer from B&Q and approved the following: That, the previous Cabinet decision be rescinded and approval be given to the freehold sale of approximately 11.2 acres of the [site] to B&Q (or a company within the same group) on the basis set out in the report. That B&Q be granted licence to enter on to 5.1 acres approximately of the land to carry out decontamination and other site preparation works and that upon completion of these works the Head of Regeneration, working with B&Q, markets the land for freehold sale for B1 development, reporting the offers received to the Cabinet Member for Resources for approval. That it be agreed that the Council should enter into any Section 106 Agreement required by the London Borough of Haringey in so far as it relates to the B1 or housing development lands subject to the terms being approved by the Cabinet Member for Resources and to the document being in a form approved by the Borough Solicitor. 1.5 Cabinet Resources Committee 28 July 2004 (Decision No. 5) agreed the following: Subject to the independent valuer confirming that the offer represents best consideration and to the Cabinet Member for Resources giving final approval under delegated powers on the basis set out in paragraph 5.3 of the report, that the Council enters into a conditional contract with B&Q plc (or a company within the same group) for a reduced area of 8.1 acres, upon the basis set out in the report. 1.6 Delegated Powers Report 28 September 2004 approved the appointment of Drivers Jonas to carry out the independent valuation. 1.7 Cabinet Resources Committee 21 July 2005 (Decision No. 8) approved a revised offer from B&Q based on the possibility of part of the site being earmarked for a traveller site under the Haringey UDP. 1.8 Cabinet Resources Committee 31 October 2007 (Decision No. 4) resolved that following a revaluation of the site and a revised offer from 3
B&Q, the Council withdraw from the negotiations with B&Q and that the site be remarketed. 1.9 Special Cabinet Resources Committee 8 August 2008 (Decision No 6) considered the results of the tender exercise and resolved to accept the offer from the preferred bidder. 2. CORPORATE PRIORITIES AND POLICY CONSIDERATIONS 2.1 The Corporate Plan commits the Council to a priority of More Choice, Better Value by delivering value for money across Council services through better use of resources including our assets, staff and technology. The recommendations in this report will do this by achieving a capital receipt to support the Council s priorities. 2.2 The proposal will further support the Council s priorities by providing a site to relocate the parking of the Council s refuse fleet, salt barn and recycling facility from the present location at Mill Hill Depot, releasing that site for disposal. 3. RISK MANAGEMENT ISSUES 3.1 Whilst the preferred bidder remains committed to the purchase, the deterioration in the financial markets since tenders were received, adds to the risk that difficulties in raising the necessary funding, may prevent or delay exchange of contracts. 3.3 Although the offer from the preferred bidder is not conditional on planning, planning consent will be required from LB Haringey before the precise location of the depot site can be determined. In consultation with the Council, the purchaser will prepare a master plan for the entire site including the Council Depot and the TfL bus depot. Such an approach is necessary to ensure that the employment generation will support the planning application for the remainder of the scheme. Any delay in securing such planning consent may cause a delay in the availability of the new depot site. In order to mitigate any such potential delay, a longstop date of 31 December 2011, for the obtaining of planning consent by the developer, will be inserted in the contract. In the event that the developer has not obtained planning consent by this date, the Council may proceed with a separate application in respect of the depot site with a road link to the existing roundabout. However, there will always be risks that the development may be delayed for any one of a number of other reasons which could delay the relocation from Mill Hill depot site with consequential cost increases to that project. 3.4 Certain types of contract entered into by the Council are governed by EU Procurement Rules. The requirement for the purchaser to undertake the decontamination works to the retained land and other aspects of the proposed contract have been considered by the Council s external lawyers in relation to these Procurement Rules. Trowers and Hamlin have advised that the key criteria are (1) is the 4
Council entering into a Public Works contract? (2) what is the primary purpose of the contract? (3) does the cost of the works exceed the threshold of 3.5m. On the basis of this criteria the Council s internal legal team is of the view and has confirmed that, whilst the contract involves Works, the Works are not the primary purpose of the contract and the value is below the, applicable, EU threshold. Consequently, the contract is not required to be advertised in Europe in accordance with the EU procurement regime. 3.5 The cost of the remediation works to the land retained for the Council Depot will be capped at 1m. Any costs in excess of the amount will fall to the Council. Costs of remediation works for the whole site have been estimated by the preferred bidder 3m. 3.6 Any additional risks are set out in the exempt report. 4. EQUALITIES AND DIVERSITY ISSUES 4.1 Barnet Council is committed to improving the quality of life and wider participation for all in the economic, educational, cultural, social and community life of the Borough. The receipt from the disposal of this site will feed into the Council s Capital Programme which supports the overall aim of the Council s Equalities Policy and supports the equality priorities outlined in Barnet s Equality Scheme. 5. USE OF RESOURCES IMPLICATIONS (Finance, Procurement, Performance & Value for Money, Staffing, IT, Property, Sustainability) 5.1 Procurement implications are addressed within the body of the report. There are no performance and value for money, staffing, IT or sustainability implications. The property implications are set out in paragraph 8 below and in the exempt report. The financial implications are detailed in the exempt report. 6. LEGAL ISSUES 6.1 The Council have a statutory duty under section 123 of the Local Government Act 1972 to ensure that they achieve the best consideration reasonably obtainable on any property disposal. The Head of Property Services believes that the revised proposals satisfy the requirements of S.123 and the Council s external valuers, Drivers Jonas have provided written confirmation that in their opinion the amended offer satisfies the best consideration provisions of the Local Government Act 1972. This statement is attached at Appendix A of the exempt report. 6.2 Legal input has been obtained from the Council s external lawyers, Trowers and Hamlins, who will prepare the Contract for Sale based on the agreed Heads of Terms. Whilst the agreement of detailed Heads of Terms with the preferred bidder is intended to minimise of possibility of further negotiation, Trowers have pointed out that some changes and 5
adjustments to the Heads of Terms are almost inevitable during negotiation of the contract. In the event of material changes to the terms, a further democratic decision and a fresh statement s.123 statement from the external valuers will be required. 6.3 The view of the council s internal lawyers, with respect to EU procurement, is set out in paragraph 3.4 above. 7. CONSTITUTIONAL POWERS 7.1.1 Constitution Part 3: paragraph 3.2; Powers Delegated to Cabinet Members See link below: http://www.barnet.gov.uk /responsibility-functions.pdf 8. BACKGROUND INFORMATION 8.1 The preferred bidder has reassessed the level of their bid based on the estimate of available developable land. Their original bid was based on 14 acres of the total site being developable. They have now recalculated this at 10.5 acres. As a result they have made an amendment to their offer as detailed in the exempt section. This amendment will also require a consequential amendment to the overage provision which is also detailed in the exempt report. 8.2 The Council s requirement of land for the replacement depot site has been reassessed at 3.5 acres to now include land for a salt barn. Bids were invited on the basis of a Council requirement of 3.25 acres. The preferred bidder has agreed to the size of the Council retained land for a depot being increased to 3.5 acres subject to a proportionate reduction to the purchase price. The amended purchase price resulting from this is detailed in the exempt report. 8.3 As a consequence of the situation in the financial markets, the preferred bidder has requested that Contracts are to be exchanged within 60 working days from receipt of documents rather than 30 days as previously agreed. This will allow sufficient time for funding to be secured. 8.4 The plan attached to the 8 August report outlining the disposal site was incorrect in that it did not accord with the site as previously reported or as detailed in the marketing particulars. The correct disposal plan is attached as Appendix A. This shows the area to be transferred edged red, the land retained for the Council depot in yellow and the assumed developable area of 10.5 acres in pink. The Council also own the freehold of a small area of land currently leased to the golf club shown in yellow on the plan. This land is designated Metropolitan Open Land and is currently let to Muswell Hill Golf Club who are holding over under a lease. Consideration has been given to whether this land could add any value to the development site but due to its designation as Metropolitan Open Space this is unlikely. The Council will retain a right of access to 6
this land over the new development. 8.5 There are currently 6 advertisement hoardings which the Council leases out situated on the northern boundary of the disposal site adjacent to Pinkham Way NCR. These sites have not been included in the proposed sale but it is considered appropriate that these be relocated into the disposal site provided that suitable terms can be agreed with the preferred bidder. Details of the current income is set out in the exempt report. The current leetings are on the basis of licences which can be terminated on 3 months Notice. In the event that acceptable terms are agreed with the preferred bidder then the existing licences will be terminated and renewed directly by the purchaser. 8.6 Based on the original offer from the preferred bidder and the amendments as detailed in this and the exempt report, Heads of Terms have now been agreed with the preferred bidder which will form the basis of the Contract document. A copy of these Heads of Terms is attached to the exempt report 9. LIST OF BACKGROUND PAPERS 9.1 None. 10. DECISION OF THE CABINET MEMBER(S) I authorise the following action: 10.1 That subject to the completion of all necessary legal and other documentation the Council enter into a Contract with the preferred bidder on the basis of the terms detailed above and in the exempt report. 10.2 That the Council agree to include the advertisement sites (referred to in paragraph 8.5 above) in the disposal, subject to agreement of an acceptable price with the preferred bidder that satisfies the requirements of section 123 of the Local Government Act. Such terms to be the subject of a separate future report noting the agreed terms. Signed Cllr Mike Freer Date 30/11/08 Leader and Cabinet Member for Resources 7
APPENDIX A 8