Report of the Director of Business, Economic and Growth (enclosed)
Decision:
1. That the contract strategy recommendation to enter into a pre-construction services agreement to enable greater certainty to be obtained on the final construction contract, whilst maintaining the momentum of the programme and for the site enabling works be noted.
2. That the recommendation to use a JCT (D&B) 2016 form of contract for the construction contract be noted.
3. Approval granted for the Council to enter into a Pre-Construction Services Agreement Contract (PCSA) under the Lancashire Regeneration Property Partnership to enable the site preparation works to commence, including the demolition of the HSS Hire and St John Ambulance buildings.
4. The proposal to change the tenure mix of the scheme to 100% affordable rent was noted.
5. Executive Cabinet noted the strong possibility that additional HCA grant funding of approximately £300k will be secured which will ensure all capital costs are fully funded.
6. Executive Cabinet noted that the uplift in HCA grant requires the Council to commit a start on site before 31 March 2017. The PCSA satisfies this because it is with the same contractor and is our main development contractor. This will mean that the Council will have entered into the HCA contract and will enable the first tranche of the grant (75% of the total) to be drawn.
7. Executive Cabinet also noted that officers will explore options to reduce the annual operational costs of the retirement village model. This will include the benchmarking of running costs against similar developments, a review of staffing and concierge services. It was also noted that officers will explore developing alternative models of generating income. This will include modelling income from the commercial aspects of the scheme and working with health colleagues around a step down/re-enablement for a block number of units.
Minutes:
The Executive Member (Customer and Advice Services) presented the report of the Director for Business, Economic and Growth that provided and update on the Primrose Gardens project and sought approval for entering into a contract with Eric Wright Construction to progress the first stage of site enabling works.
The main advantage of this approach is so that the Council can progress the site preparation whilst investing sufficient time for overall scheme costs to be refined and value engineered. It would also reduce the risk to the Council and will ensure that the final contract price is fully market tested.
An addendum report was also presented that provided an update on the work being undertaken to ensure that Primrose Gardens is viable for both capital and revenue financing.
Decision:
1. That the contract strategy be noted.
2. That the recommendation to use a JCT (D&B) 2016 form of contract for the construction contract be noted.
3. Approval granted for the Council to enter into a Pre-Construction Services Agreement Contract (PCSA) under the Lancashire Regeneration Property Partnership to enable the site preparation works to commence, including the demolition of the HSS Hire and St John Ambulance buildings.
4. The proposal to change the tenure mix of the scheme to 100% affordable rent was noted.
5. Executive Cabinet noted the strong possibility that additional HCA grant funding of approximately £300k will be secured which will ensure all capital costs are fully funded.
6. Executive Cabinet noted that the uplift in HCA grant requires the Council to commit a start on site before 31 March 2017. The PCSA satisfies this because it is with the same contractor and is our main development contractor. This will mean that the Council will have entered into the HCA contract and will enable the first tranche of the grant (75% of the total) to be drawn.
7. Executive Cabinet also noted that officers will explore options to reduce the annual operational costs of the retirement village model. This will include the benchmarking of running costs against similar developments, a review of staffing and concierge services. It was also noted that officers will explore developing alternative models of generating income. This will include modelling income from the commercial aspects of the scheme and working with health colleagues around a step down/re-enablement for a block number of units.
Reasons for recommendation(s)
To ensure the project remains on track and deliverable and that the site enabling works are commenced whilst the full construction contract is prepared. This provides time for further risk control and contingency work to be undertaken without jeopardising the overall project.
Alternative options considered and rejected
Entering into the final construction contract immediately - This was rejected because of the levels of risk and because more detailed design work and cost engineering was required.
Delay the site preparation works pending the outcome of the two risk control measures. This was rejected because the overall project will slip and the HCA deadline will be missed therefore putting the grant award at risk. The site must be cleared in preparation for the development in any case as the two buildings (HSS Hire and St John Ambulance) have both reached the end of their useful life and would be a liability if they remain in use or empty.
Not progress the Primrose Gardens project. This was rejected as it was felt there is scope to investigate ways to develop a viable delivery model which is cost neutral and this work will be completed ahead of the final decision to appoint the construction contractor and progress the development.