Agenda item

RESOLVED: Cabinet;

1.    Agreed that authority be given to the Assistant Director of Assets & Environment, in consultation with the Cabinet Member for Finance, to agree terms for the disposal of the following assets and enter any documentation required to implement this:

a)    Former Ribble Close Group Home, Northampton (freehold or transfer to HRA).

b)    Former Ecton Brook Care Home, Northampton (freehold or transfer to Housing Revenue Account).

c)    Former Evelyn Wright Care Home, Daventry (freehold)

d)    Walker House, Northampton (leasehold or long leasehold, sub-lease or assignment of lease).

e)    Former Brackley Swimming Pool Site, Brackley (freehold).

REASONS RESOLVED:

Overview

1.    It is sensible for the Council to review its estate and ensure it delivers the best overall value, taking policy and financial considerations together, for the residents of West Northamptonshire.

Former Ribble Close Group Home, Northampton:

2.    To meet the Council’s obligation not to dispose of land at less than the best consideration reasonably obtainable.

3.    To generate a capital receipt.

4.    To reduce the operating costs of the Council’s estate (holding costs) and remove the risk of vandalism and any associated health and safety concerns associated with an empty property.

5.    To make it likely that the housing would be brought back into use.

Former Ecton Brook Elderly Persons Home, Northampton:

6.    To meet the Council’s obligation not to dispose of land at less than the best consideration reasonably obtainable.

7.    To generate a capital receipt for the General Fund.

8.    To reduce the operating costs of the Council’s estate (holding costs) and remove the risk of vandalism and any associated health and safety concerns associated with an empty property.

9.    To facilitate the delivery of housing on the site (whether though delivery of affordable housing or market housing, or both).

Former Evelyn Wright Elderly Persons Home, Daventry:

10.To meet the Council’s obligation not to dispose of land at less than the best consideration reasonably obtainable.

11.To generate a capital receipt.

12.To reduce the operating costs of the Council’s estate (holding costs) and remove the risk of vandalism and any associated health and safety concerns associated with an empty property.

Walker House, Moulton Park, Northampton:

13.To meet the Council’s obligation not to dispose assets at less than the best consideration reasonably obtainable.

14.To generate either revenue income, or a capital receipt (premium), or both.

15.To reduce the operating costs of the Councils estate (holding costs) and remove the risk of vandalism and any associated health and safety concerns associated with an empty property.

Former Brackley Swimming Pool Site, Brackley:

1.    To meet the Council’s obligation not to dispose assets at less than the best consideration reasonably obtainable.

2.    To generate a capital receipt.

3.    To reduce the operating costs of the Council’s corporate estate (holding costs) and remove the risk of health and safety concerns associated with a vacant site.

ALTERNATIVE OPTIONS:

The Council has the following options.

Former Ribble Close Group Home, Northampton

(1)  (1) Do nothing – The Council could take the decision to retain the property. Further to the investigations, the Council has not identified a service use for the property and as such it would have to hold the property for an indefinable length of time. Council would continue to incur holding costs whilst the building was vacant. It would also be at risk of vandalism for arson.

(2)  (2) Subdivision of properties prior to disposal – This will be a key consideration of the disposal process. As the properties were originally constructed as a pair of semi-detached properties, the Council will need to evaluate whether it would command a higher capital receipt by returning the properties to their original state, then selling them in their existing form. Such an approach would require the Council to commit capital to complete these works. However, this would only be considered if it offered a financial return that was greater than the cost of the works. This option would therefore be considered as part of planning for disposal.

(3)  (3) Disposal without subdivision – This option would therefore be considered as part of planning for disposal. It is essentially the mirror image of option (2).

(4)  Either option (2) or (3) could be preferable. The final decision would be taken once analysis of the cost and likely impact on capital receipts had been assessed.

Former Ecton Brook Elderly Persons Home, Northampton

(1)  Do nothing – The Council could retain the property. However, the Council has not identified an internal use for the property and as such it would have to hold the property for an indefinable length of time. The Council would continue to incur holding costs whilst the building was vacant. It would also be at risk of vandalism or arson.

(2)  (2) Seek outline planning permission for a revised use or development – While this could be a valid approach, the Council would need to ensure that the scheme for which is sought planning permission was one that would derive the highest return. This becomes complicated on sites where there are multiple alternative uses. Social housing would generate a different value to retirement flats, etc. It is therefore hard to conclude this approach would deliver the best overall value.

(3)  (3) Dispose without obtaining planning permission – Given the multiple different potential uses for the site, this seems the most pragmatic approach.

(4)  (4) ‘Dispose’ to the Housing Revenue Account – As described above, this may enable the Council, via NPH, to deliver social housing and allied facilities on the site whilst the General Fund still received best consideration.

(5)  Option 3 is recommended unless delivery of a social housing scheme on the land is approved under the NPH governance arrangements, in which case Option 4 would be recommended.

Former Evelyn Wright Elderly Persons Home, Daventry

(1)  Do nothing – The Council could retain the property. Further to the investigations, the Council has not identified an internal use for the property and as such it would have to hold the property for an indefinable length of time. The Council would continue to incur holding costs whilst the building was vacant. It would also be at risk of vandalism or arson.

(2)  (2) Seek outline planning permission for a revised use or development – While this could be a valid approach, the Council would need to ensure that the scheme for which is sought planning permission was one that would derive the highest return. This becomes complicated on sites where there are multiple alternative uses. Social housing would generate a different value to retirement flats, etc. It is therefore hard to conclude this approach would deliver the best overall value.

(3)  (3) Dispose without obtaining planning permission – Given the multiple different potential uses for the site, this seems the most pragmatic approach.

(4)  (4) Dispose by private treaty to potential service provider – This may offer greater value to the Council, but the detailed are not yet sufficiently clear to confirm if this is the case. Therefore, further investigation is required.

(5)  Subject to Option 4 not proceeding, Option 3 is recommended.

Walker House, Moulton Park, Northampton

(6)  Do nothing – The Council could decide to do nothing and continue to hold the property vacant. Given the investigations that have previously been undertaken by NCC and more recently by WNC, it is unlikely that the Council will have a future need for the property. The Council would continue to incur holding costs whilst the building was vacant. It would also be at risk of vandalism or arson.

(7)  (2) Market and secure a new tenant – As the Council has the benefit of the residue of the existing lease (around 50 years), it could look to secure a commercial tenant for the property. In the current market, it is likely that a tenant would consider a five-year term (or ten with a break at five), although longer terms are possible. It is understood that the property is likely to be well received on the market. As the Council pays a ground rent, such an approach would allow it to benefit from any profit rent (difference between the

ground rent and the market rent). As with any commercial letting, it would carry the risk or rental voids while vacant.

(8)  (3) Dispose of its long leasehold interest – Given the profit rent (discussed above) that is likely to exist with this property, it is possible that the Council could dispose of its long leasehold interest in the property for a premium. The level of premium payable would vary from tenant to tenant and will be inherently linked to the unexpired term, and the level of works that a purchaser may need to make to the property to make it fit for their purpose. Therefore, it is not possible to determine what level of premium could be commanded without exposing the property to the market. This disposal may be for a term less than the remaining lease, or it could be for the whole remaining term, in which case the lease would be assigned to the new tenant.

(9)  (4) Acquisition of the freehold – This option would be considered if WNC has a longer term use for the property and it permanently secures the availability of the property. As no use has been identified, such an action would be unnecessary. In addition to this, while it would be reasonable to assume that the value of an unencumbered freehold would be more valuable than the Councils long leasehold interest, to realise this, the Council would need to negotiate that acquisition with the current freeholder. It is likely that the Council would need to share any benefit with the landlord, reducing the overall benefit to the Council. Whilst possible the Council has no obvious benefit from acquiring this property.

(10)               As noted above, either Option 2 or 3 could offer the best consideration. Accordingly, the property would be marketed for both possible outcomes and the best offer selected.

Former Brackley Swimming Pool Site, Brackley

(11)               Do nothing – The Council could decide to do nothing and continue to hold the property vacant. Given the investigations that have previously been undertaken by NCC and more recently by WNC, it is not possible to determine whether the Council will have a future need for the property, however this is considered unlikely. By continuing to hold then property vacant, it will continue to be responsible for the management and maintenance of the site and would forego the ability to generate a capital receipt from the disposal.

(12)               (2) Dispose of the Freehold – Given the investigations in relation to any future use of the site, disposal of the freehold would enable to Council to mitigate the cost, and risk of holding the property vacant. Such an action would also allow the Council to generate a capital receipt and meets its best consideration obligations.

(13)               Option 2 is recommended. This may be, as noted above, by private treaty to Brackley Town Council, or to another purchaser, probably a developer.

The Chair presented the report and summarised the salient points.

Councillors made the following comments.

·         It was queried whether a scoping exercise would take place, in order to fully understand the needs of residents.

·         It was noted that the Daventry home was gifted to the people of Daventry. Would the money from the sale be retained by Daventry?

·         There was a need for community hubs in various locations.

·         It was noted that a full strategic oversight was needed on assets in order that the Council did not come and regret any decisions.

The Executive Director Place & Economy made the following comments.

·         It was advised that every neighbourhood would have a needs assessment.

·         The totality of the land around Brackley house had been looked at.

·         Any decisions made as the council goes forward will be open to scrutiny.

RESOLVED: Cabinet;

1.    Agreed that authority be given to the Assistant Director of Assets & Environment, in consultation with the Cabinet Member for Finance, to agree terms for the disposal of the following assets and enter any documentation required to implement this:

a)    Former Ribble Close Group Home, Northampton (freehold) for transfer to HRA).

b)    Former Ecton Brook Care Home, Northampton (freehold or transfer to Housing Revenue Account).

c)    Former Evelyn Wright Care Home, Daventry (freehold)

d)    Walker House, Northampton (leasehold or long leasehold, sub-lease or assignment of lease).

e)    Former Brackley Swimming Pool Site, Brackley (freehold).