To consider a report of the Chief Executive.
Minutes:
Councillor Alistair Bradley, Executive Leader introduced a second report on Market Walk which included a detailed analysis of the financial implications of the proposed development both in terms of financing the development costs of the project and the likely revenue from rental income and business rates. Also included was a breakdown of funding for associated public realm works.
The report further contained commercial information on interest from major retailers, restaurant and leisure providers in being part of the new development in Chorley town centre.
Councillor Paul Leadbetter, Leader of the Opposition, accepted that the town centre was thriving and that additional investment was needed but expressed concern about the level of debt the Council would need to support in undertaking the development; also the loss of car parking and the potential impact in car parking revenue; and the impact on existing traders in the town.
Councillor Peter Wilson, Executive Member for Resources stated that detailed risk assessments had been undertaken and the risks would be well managed. The development would only commence once 65% of the units had pre-let contracts in place. As with the purchase of Market Walk, the Council would look at different ways of borrowing and the most preferential interest rates to minimise the impact of the debt.
Councillor Greg Morgan thought that the procurement route being recommended for the construction work would not necessarily be the most competitive.
Councillor Martin Boardman indicated support for the type of development being proposed but raised a number of concerns, namely:
· that the town centre masterplan did not mention the development of the Flat Iron with large units and questioned the choice of site. In response the Leader said it was about utilising land already in the Council’s ownership.
· a query about reducing the scale of the development by having just one flagship retailer to bring in others. The Leader said the aim was to bring in retail, restaurant and leisure outlets to complement the existing town centre offer.
· Concerns that the contemporary design of the new development may not blend in with the existing Market Walk shopping centre. The Leader welcomed views on the design aspects which had been subject to significant change and he welcomed any further comments.
Councillor Eric Bell commented that the Flat Iron market was a true asset for the town and that this proposal had too great an impact on that asset.
Councillor Danny Gee spoke in favour of the development and the Council’s proactive approach to investing in the town centre.
In concluding comments from the opposition, Councillor Paul Leadbetter indicated that there had been good debate and whilst his Group were supportive they were proposing an amendment to the recommendations in the report and this was seconded by Councillor Greg Morgan, as follows:
Amendment
· Revised 2b) Pre-let contract agreements being signed for 65% or more of the new units including all three of the units 1, 2 and 3, Plus additional points as follows
· 2d) Before work commences, the contract with the prime contractor is to be based on a Firm Fixed Price Contract (Traditional Form of Contract) to minimise the risk of cost escalation to the Council. This will require some effort in defining the scheme in some detail before work commences, it will however reduce the risk to the Council of future overspend.
· 2e) Contractual break clauses, if they are to exist, are not to be within the time period over which any incentive fee would be paid through rental income, to ensure incentive payments are recovered from the tenant.
· 2f) Production of a revised Town Centre Masterplan detailing how this development contributes to the overall strategic direction and vision for the Town Centre.
· 2g) Production of a detailed Car Parking Masterplan, strategically linked to the Town Centre development and Masterplan, detailing the location of the proposed car parks, their connectivity, how those using the Town Centre will be encouraged to change their parking habits and the marketing required, in each case.
Following further discussion on the recommendations contained in the report, Councillor Alistair Bradley, Executive Leader proposed, Councillor Peter Wilson, Executive Member for Resources seconded and it was unanimously
RESOLVED - that subject to:
a) Planning approval (due be determined at Development Control Committee on 29th September 2015);
b) Pre-let contract agreements being signed for 75% or more of the new units; and
c) The conclusion of any planning or legal challenges in favour of the scheme;
Members agree to:
1. Proceed with the development of a new retail and leisure extension to Market Walk, delivery of associated highways improvements and public realm works, at a cost of up to £12.9m excluding VAT.
2. Use the Lancashire Regeneration Property Partnerships as the procurement route for the main contractor to develop the Market Walk extension.
3. The future appropriation of the Council owned development land identified within the planning application for planning purposes (retail) with delegated power to the Head of Governance and Property Services to authorise the appropriation at the opportune time once the area is no longer required for car parking.
4. Authorise the use of the statutory process under section 237 of the Town and Country Planning Act 1990 in the event a negotiated settlement with AXA/ Booths cannot be reached.
Members require that:
5. Prior to the appointment of any contractor the proposed terms and form of the contract be brought to the General Purposes Committee of the Council for notification and consideration.
6. Leases should seek to ensure that any tenant break clause cannot operate prior to the effective repayment through rental income of the incentive paid to that tenant. In the event of a departure from this requirement the proposed lease terms should be brought to the General Purposes Committee of the Council with an explanation for the departure, for notification and consideration.
7. The Council prepare an updated Town Centre Masterplan incorporating how the development specifically contributes to the Council's strategic direction and vision for Chorley Town Centre.
8. The Council prepare a detailed Car Parking Masterplan, strategically linked to Town Centre development and Masterplan, detailing the location of the proposed car parks, their connectivity, how those using the Town Centre will be encouraged to change their parking habits and the marketing required, in each case.