Download not for publication by virtue of paragraph 9 of part 1 of schedule 12a

MANSFIELD DISTRICT COUNCIL
Report of Corporate Asset Manager
to the
Portfolio Holder for Resources
For a DELEGATED EXECUTIVE DECISION
On
19th October 2015
Property Transaction
Land at Millennium Business Park, Mansfield – Plot 10A
Disposal of Long Leasehold Interest
1. SUMMARY
1.1. This report seeks approval to a property transaction to dispose of Plot 10A
Millennium Business Park, Mansfield.
1.2. This is deemed to be a Key Decision by virtue of the amount of capital
receipt.
2. RECOMMENDATIONS
To be resolved by the Portfolio Holder for Resources
2.1. That approval be granted to dispose of the Plot 10A Millennium Business
Park, Mansfield (shown edged red on the attached plan) to SuKe Property
Limited, on the terms set out in this report.
3. BACKGROUND
3.1. The District Council owns the freehold of the land shown edged red on the
attached plan. The area amounts to approximately 1.55 Ha (3.83 acres) and
enjoys direct access to the highway at Enterprise Road. The site originally
formed part of Plot 10 having been leased to Future Products Ltd, but was
surrendered back to the Council in October 2013 due to non-development by
the company.
3.2. Whilst the site has not been actively marketed a number of enquiries have
been pursued including a possible expansion with a local company and
internal discussions with Regeneration Team on projects to bring this site
forward. However a recent direct property enquiry from JKS Boyles Limited.
The company is currently located in Alfreton Derbyshire and is a leading
supplier to the drilling industry, from drilling rigs and wireline drilling systems
MANSFIELD DISTRICT COUNCIL
to drill rods and diamond core bits. The company intends to purchase the site
through their pension fund, SuKe Property Limited, on behalf of JKS Boyles
Ltd.
3.3. Following a meeting with the company director Heads of Terms have now
been agreed as follows:
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Landlord: Mansfield District Council, Civic Centre, Chesterfield Road
South, Mansfield, Notts. NG19 7BH
Tenant: SuKe Property Limited, 14 High Leys Drive, Ravenshead,
Nottingham. NG15 9HQ. (Company No. 08817529).
Demise: All that area of land known as Plot 10A, Enterprise Way,
Millennium Business Park, Mansfield, Notts. NG19 7JX, extending to circa
3.83 acres (edged red on the attached plan for identification purposes
only).
Use: Not to use the demised premises for any use other than a use falling
within Class B1, B2 and B8 of the Schedule to the Town and Country
Planning (Use Classes) Order 1987.
Lease: A term of 999 years.
Premium: A premium of £450,000, and a peppercorn per annum
thereafter.
Service Charge: To pay to the Landlord a proportionate part of all
reasonable costs, expenses and outgoings incurred by the Landlord in
providing services at Millennium Business Park.
Development Clause: The Tenant is to complete the development of the
demised premises in accordance with the approved plans and in
accordance will all necessary permissions, licences, permits, regulations
and consents within 18 months of the date of the Lease.
Fencing Responsibility: The Tenant will be responsible for maintaining
the Northern and Western boundaries of the site, together with any fencing
and gating required to the Enterprise Road entrance.
Legal and Surveyors Fees: Each party to bear their own costs in the
transaction.
3.4. The land proposed to be sold is held within the General Fund account and a
disposal will raise a capital receipt already identified in funding the Council’s
Capital Programme.
3.5. Millennium Business Park was developed with financial assistance through
East Midlands Development Agency, now part of the Homes & Communities
Agency (HCA). As part of the original funding agreement a proportion of any
capital receipt has to be repaid to the HCA within 1 month of completion. The
share due to HCA is 42.33% less Council costs. Therefore the share due to
the HCA is approximately £185,000.
4. ALTERNATIVE OPTIONS AVAILABLE
4.1. The are 2 options available: -
MANSFIELD DISTRICT COUNCIL
4.2. Option A – Dispose the property to SuKe Property Limited.
The Council would benefit from the receipt of a capital sum £265,000 after
allowing for a repayment of £185,000 to HCA as part of the funding
agreement, together with attracting inward investment of a new company into
the District creating new employment.
4.3. Option B – Formally market the site.
The Council could formally market the site through external agents, but would
incur costs in doing so and the likely capital receipt would be as the agreed
terms set out in the report. If this option were chosen this would delay the
timing of a capital receipt.
5.
RISK AND OPPORTUNITY ASSESSMENT OF RECOMMENDATIONS AND
OPTIONS
Risk
Risk Assessment
Financial Risk
Failure to secure a
capital receipt.
Risk
Level
Medium
Risk Management
Property Services have been
provided evidence that the
company is in funds to
proceed with the purchase.
6.
ALIGNMENT TO COUNCIL PRIORITIES
6.1
Revitalising our district, town centres and neighbourhoods encouraging
inward investment and creating a climate for job creation and growth.
6.2
In accordance with the Asset Management Plan, the Council has to ensure its
land and property assets are used effectively for the delivery of services either
directly in the case of operational properties or indirectly with non-operational
properties (e.g. investment properties). The capital receipt will contribute to
the Council’s capital programme.
7.
IMPLICATIONS
(a)
Relevant Legislation –The Council has a duty under Section 123 of the Local
Government Act 1972 to obtain best consideration in the disposals of its
assets. In my opinion the agreed sale price represents market value and
satisfies best consideration under the Act.
(b)
Human Rights - The Human Rights Act 1998 is not engaged as an individual
is not directly affected by the recommendation.
MANSFIELD DISTRICT COUNCIL
(c)
Equality and Diversity – It is considered that the proposed actions are fair and
equitable in their content and are not discriminative on the grounds of equality
and human rights.
(d)
Climate change and environmental sustainability – No implications on the
Council.
(e)
Crime and Disorder – No implications on the Council.
(f)
Budget /Resource - There is presently no rental income to the General Fund
from this vacant site. However a net £265,000 capital receipt will be
generated from the proposed disposal which has been previously identified in
the Asset Realisation programme and accounted for in the funding of the
capital programme.
8.
COMMENT OF STATUTORY OFFICERS
Head of Paid Service – No specific comments.
Section151 Officer – The financial implications of the recommendation have been set
out within the body of this report.
VAT implications - This site has been opted to tax and thus VAT will be charged on
the disposal.
Monitoring Officer – No specific comments.
9.
CONSULTATION
9.1
Nil
10.
BACKGROUND PAPERS
Heads of Terms letter 7th September 2015
Report Author
Designation
Telephone
E-mail
- Philip Colledge
- Principal General Practice Surveyor & Corporate Asset
Manager
- 01623 463231
- [email protected]
MANSFIELD DISTRICT COUNCIL
Site Plan - For illustration purposes only