The Executive Director of Neighbourhoods and Communities submitted a report that proposed a second phase of asset disposals under the ongoing Review of Non-Strategic Assets.
On 4 April 2012, the Executive Property Sub-Committee for Property had considered and approved reports that outlined:
the review of non-strategic assets that the Council is undertaking as part of its transformation programme; and,
a small first phase of advantageous disposals under the first four (of ten) categories of asset: Agricultural Property, Residential Development Sites, Ground Leases and Industrial Sites.
It was agreed that capital monies accrued from this process would be used by the Council to repay or avoid capital borrowing and so would improve the Councils revenue position by avoiding interest payments. Accordingly a savings target was applied to this project in the Councils budget for 2013/14, and further targets would be applied for future years.
The report on first phase disposals had made clear that there were additional assets under some of the four categories reviewed at that point that could have been brought forward for sale if the first phase was successful. Progress to date on the first phase had suggested that there was indeed a market for those types of assets.
In addition, in late 2012 the Council had commissioned an overview of the remaining NSAR categories - Industrial Units, Business Centres, Shops and commercial properties, Car Parks, Wayleaves and easements and Miscellaneous Other - which had identified other advantageous disposals.
The report combined the findings from the analyses outlined above to propose a second phase of disposals for consideration.
As with the first phase disposals, the Sub-Committee was asked to approve the disposals and a reserve price for each. The reserve prices used average capital value as a starting point, with appropriate upward adjustments where relevant for lost income. In some cases the reserve was set by valuers recommendation in light of the lease conditions and/or market circumstances. Reserves and the rationale for those were listed in the confidential Part B of the report.
It was proposed that the assets be disposed via the open market, unless best consideration could only be achieved through negotiation with the sitting tenant or other parties with an interest in the asset. Though disposals were proposed as it was considered likely that sales could be achieved at reserve, given market unpredictability it could be noted that there was no guarantee that all the assets would be disposed of, or the reserve prices met.
The report outlined in further detail information on:
Residential Development Sites;
Shops / Commercial Units
The report outlined in further detail that there were three options available:
Option 1: Dispose of none of the sites - not recommended;
Option 2: Dispose of some of the sites - not recommended; and
Option 3: Dispose of all of the sites - recommended.
The next stage, if approval to proceed was received, would be that additional assets for sale would be identified on an ad hoc basis. It was recommended that these be progressed in line with existing delegated authorities and savings captured against targets for the NSAR project, with progress updates being provided to the Committee at appropriate intervals. This approach had already been taken with speculative offers received since the approval of Phase 1 in April 2012.
Moving forward, an Estates Strategy would be developed to identify how remaining assets could be best utilised in support of Middlesbrough 2020, in particular driving local growth. It was anticipated that this strategy may include further disposals more complex that those addressed to date, but also more innovative solutions for higher-quality assets. The Estates Strategy would be presented to the Committee for consideration in autumn 2013.
During the meeting Paul Stephens provided a presentation that summarised the contents of the report as well as hard copy maps of the relevant sites.
Councillor N Walker requested that on the Land at Ladgate Lane / Hemlington Lane / A174 Middlesbrough Map, the B1365 road was to be highlighted as 'Hemlington Lane'.
Councillor P Sanderson requested if the Ward Councillors could be kept updated.
It was stated in the meeting that this was the initial stage of a process which wold lead to further information and consultation.
That the disposals outlined below are approved, and that, provided the recommended reserve price be achieved (listed in the confidential Part B of this report), sales be progressed through existing delegated authorities; and
That further reports detailing the business case for the transfer of Gainsborough Road / Lucerne Court and Barsford Road to partner RSLs be brought forward.
The decisions were supported by the following reason:
To ensure that the Council drives the maximum value from its asset portfolio and that agreed sums for disposals are achieved as quickly as possible.