To consider further information about the sale arrangements for Threadneedle House.
(Presentation to follow)
Minutes:
The Committee received a presentation in respect of the sales arrangements for Threadneedle House following a request from the Committee at its previous meeting. Officers provided background information and informed Members that there was a void rate across Redditch of commercial office space estimated at between 25-30%.
The following areas were highlighted within the presentation and discussed by Members:
· Confirmation that Barclays bank had first discussed surrendering its lease in 2012 and the loss of income following the surrender.
· The financial benefits to receiving revenue included within the Medium Term Financial Plan.
· The assumption which had been made in respect of staff moving from Bromsgrove District Council into the vacant property and the income that could be generated from it.
· The impact of the empty unit and the refurbishment costs and the negotiated dilapidations sum received.
· Members questioned the valuation of the building and in particular the reduction in value when considered as an empty building and the calculation of the current value.
· The impact on business rates in respect of short term lets to charitable organisations.
· The area of the unit let to the Post Office and the continued rental received from this together with the number of years remaining on the lease and any formal discussions with them in respect of the possible sale of the unit.
· Members expressed concerns as to whether a developer would be happy for the Post Office to be retained in its current position. Members were keen to ensure that it remained in that position.
· A comparison in the rate of rental units per square foot in various parts of the Borough.
· The reduction in demand for large unit spaces and the length of leases available.
· The reference within the Local Plan in respect of the need for office space within the Borough.
· Tentative interest shown from organisations such as the NHS and the Police Authority.
· How the units were currently being marketed.
· The shortfall of housing within the Borough and the possible conversion to residential use (it was suggested that the ground floor should be retail with residential above) and any interest from developers.
· The impact of residential use on the surrounding area and car parking issues which may arise from such a development.
· It was confirmed that the market area would not initially be included within any negotiations.
Members were informed that Threadneedle House would be marketed nationally as it was felt that a national group would have more appropriate contacts and cover a wider scope of potential developers. Local commercial agents tended to deal with much smaller units. Quotes had already been received and discussions had taken place in respect of guidelines and strategies in respect of potential bidders. Members were also provided with details of the potential fees charged for the sale of the building. There would be a guide price and an auction would be considered as an option. A final decision would be made following consideration of all the available professional advice. It was confirmed by Officers that actively marketing Threadneedle House had not as yet been progressed, pending the outcome of the discussions by the Committee at the meeting.
The Committee discussed the limited control which the Council had within the town centre and the potential impact on the surrounding area and the Palace Theatre in particular should Threadneedle House be sold and redeveloped for residential use. It was hoped that the development would bring a mix of both residential apartments together with retail units which would encourage a thriving café community and increase the footfall within the town centre. Planners had indicated that they would only allow retail units to be developed on the ground floor.
Members also discussed the following areas in more detail:
· Any involvement of the Redditch Town Centre Partnership to encourage community interest groups use of the building and to support works to make improvements to the building.
· The three small businesses which had been set up in the market area and problems it was understood they had encountered due to location.
· The use of rental income to offset borrowing and the loss of that rental income if the building was to be sold.
· The cost to the Council if the building was refurbished and/or breaking it up into individual units.
· The potential for joint venture working and whether this had been explored.
· The development of the market area and whether if this development work was carried out it could have a positive impact on the sale in the long term.
· The inclusion of the voluntary sector and how they preferred to be independent rather than sharing the use of a building.
Following further discussion it was
RECOMMENDED that
1) Property Services explore all options for use of Threadneedle House including sale, rent and joint venture; and
2) there should be very active marketing of Threadneedle House for let either as a whole building or in units.
(During consideration of this item Members discussed matters that necessitated the disclosure of exempt information. It was therefore agreed to exclude the press and public prior to any debate on the grounds that information relating to the financial or business affairs of any particular person (including the authority holding that information. However, there is nothing exempt in this record of the proceedings.)