Councillors and committees

Decision details

Property Transaction - Update on Gatwick Diamond Site (Phase 2)

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: Yes

Decisions:

In October 2016, Cabinet authorised the funding of a detailed planning application and submission of tender documentation in respect of Phase 2 of the Surrey County Council owned site in Gatwick Road, Crawley.

 

The Cabinet Member for Property and Business Services advised Members that there could be a need for additional contingency to enable the County Council to meet potential planning requirements in the design and specification of the two buildings and therefore Cabinet was requested to authorise a contingency reserve of capital funding for the project.

 

RESOLVED:

 

1.         That the provision of additional capital funding, as detailed in the submitted report be approved, taking the total approved net capital funding to the amount also set out in the report, to provide a contingency reserve.

2.         That Property Services be authorised to conclude the negotiation of commercial terms with L3 Commercial Training Solutions Ltd and enter into the Agreement for Lease and Lease, in accordance with the Heads of Terms attached within Annex 1 of the submitted report, on a subject to planning basis upon confirmation from the Chief Property Officer that the terms agreed with the tenant comply with S123 of the Local Government Act 1972.

3.         That the council be authorised to enter into a Main Building Works Contract with Wilmott Dixon Construction Ltd, subject to the following pre-conditions:

a.      the agreed contract does not exceed a gross capital cost estimate of the figure set out in the submitted report, or where this is exceeded, it relates solely to Tenant works which are to be recovered in full from L3 Training and Simulation Ltd (L3)

b.    completion of the Agreement for Lease with L3 in line with the heads of terms.

 

Reasons for Decisions:

 

To allow Surrey County Council to secure a significant, pre-committed and long term revenue stream in line with the Council’s stated Investment Strategy.

 

The proposed development, let on a 20 year lease will continue to generate a substantial net return to Surrey County Council in the event the contingency reserve is required.

 

Whilst modifications are being sought to the building design and specification, to set the overall project cost (to both developer and tenant) within the cap set by the previous Cabinet authority, an additional contingency reserve is necessary to revert to the original building design for which planning consent has already been secured. Such a course of action does not materially impact on the business case previously approved by Cabinet and the impact is more than offset by the reduction in the borrowing costs.  

Report author: Peter Hall

Publication date: 28/06/2017

Date of decision: 27/06/2017

Decided at meeting: 27/06/2017 - Cabinet

Effective from: 06/07/2017

  • Restricted enclosure  View reasons restricted
  • Restricted enclosure  View reasons restricted
  • Restricted enclosure  View reasons restricted
  •