Agenda item

A report by the Director of Property and Assets regarding the proposal to regenerate the Broadbridge Heath Highway Depot declared surplus to operational requirements in 2018. 

The Committee is asked to review the draft decision report attached as the Annex documentand make any comments to the Cabinet Member for Finance ahead of the decision being taken.

103.1  The Committee considered the draft Endorsement: Broadbridge Heath Retail Scheme decision report by the Director of Property and Assets (copy appended to the signed minutes).

103.2  The Cabinet Member for Finance introduced the report and highlighted that the Highways Depot site has been redundant since being declared surplus in 2018.  The development design holds good potential for generating income and aligns with the commercial and retail use as designated in Horsham District Council’s Local Plan.  The proposed tenants are secure blue-chip retail companies and a pre-let agreement will be signed before development begins.

103.3  The Director of Property and Assets introduced the report.  It was highlighted that the council regenerating the site ensures autonomy over its design, will increase employment in the local area, and provides the council with a revenue return. 

103.4  The Committee made comments in relation to the draft Broadbridge Heath Retail Scheme decision report, including those that follow. It:

·       Reflected on the effect of out of town retail developments on the economic decline of High Streets.  The Cabinet Member for Finance reiterated the area is designated for retail in the Local Plan and that the potential tenants would not consider High Street units.

·       Supported increasing revenue income to the council for future budget setting, and welcomed the predicted 6.91% yield on the development.

·       Raised positive and negative views about the effect of the pandemic and related national lockdowns on the retail industry in the changing economic environment.

·       Noted the viability study for the development was undertaken in 2019, suggested this be reviewed to ensure it is still viable before taking the scheme forward, and recommended that a sensitivity analysis be undertaken to ensure the scheme remains financially viable when different variables and risks are taken into account.  The Director of Property and Assets confirmed officers are confident in the predicted development costs and hold planned contingency funds which should not be required, and that the investment return will be constantly monitored.

·       Encouraged that tenants be locked in before development begins.  The Director of Property and Assets confirmed tenants will be locked in via an Agreement to Lease

·       A Member suggested amendments be made to strengthen the recommendations in the draft decision report.  There was agreement that recommendations 1 and 3 be amended and that a further recommendation 6 be added that both recommendations 3 and 4 be contingent and provisional on the other [as detailed in the recommendations below].

·       Highlighted the use of private vehicles by shoppers to access out of town retail units and raised concerns on whether the proposed development supports the council’s commitment to tackling climate change.  Suggested mitigation measures be considered to relieve the carbon footprint and increase the site’s green credentials, which could include electric vehicle (EV) charging points and solar panels.  Including a significant number of EV points was particularly highlighted in relation to the Government’s focus on ending manufacture of petrol and diesel vehicles.  The Director of Property and Assets confirmed that as many measures as practical will be included to relieve the carbon footprint of the development which may include solar panels on the roof if appropriate.

·       Noted concern about a potential increase to litter and encouraged measures be put in place to prevent or penalise litter on the highway.

In order to consider the Restricted Appendices A and B, the public and press were excluded from the meeting under Part I of Schedule 12A of the Local Government Act 1972, paragraph 3 Financial or business affairs, and the Committee entered private Part II discussion.  The public meeting was paused at 3.58pm and resumed at 4.59pm.  The Part I public summary of the Part II restricted discussion is as follows.  It:

·       Discussed the viability of the retail development in the current and future economic climate.

·       Discussed options for developing the land and commented on balancing risk against revenue income.

·       Sought reassurance the property team had the capacity to progress the project.

·       Highlighted issues regarding impact on the highway.

·       Made suggestions about the format of future property decision reports.

103.7  Consensus was reached by the Committee to support the retail scheme development and make recommendations to the Cabinet Member for Finance.  Cllr M Jones and Cllr Lea wished it recorded that they do not support progressing the scheme.

103.8  Resolved – That the Committee:

1)   Recommend the Council’s climate change policy should be taken into account when developing the site and measures taken to reduce the carbon footprint, with particular reference to the provision of electric vehicle charging points and solar panels;

2)   Recommend amendment to the draft decision report recommendations, to be included as follows;

That the Cabinet Member:

i.     Subject to revalidating viability, approves the regeneration of an under-utilised asset to deliver a Retail Park at Broadbridge Heath, Horsham with the allocation of £15.47m from the capital programme to fund the completion of the project to construct a development on this site consisting of up to four units;

ii.    Authorises entering into pre-let arrangements by way of conditional Agreements to Lease with the four preferred retailers; the Agreements will commit the County Council to the construction of this scheme, to the retailers’ specifications, conditional upon satisfactory planning permission and completing the works. The terms of the agreements remain commercially confidential;

iii.  Delegates authority to the Director of Property and Assets with the Director of Law and Assurance to finalise the terms of the agreements to lease which have sufficient terms to guarantee cost recovery;

iv.  Authorises the commencement of procurement for the construction contract;

v.   Subject to receipt of satisfactory planning permission delegates authority to the Director of Property and Assets to award the construction contract; and

vi.  That both recommendations 3 and 4 be contingent and provisional on the other.

3)   Recommend that future property decision reports include a sensitivity analysis and use risk adjusted rates to calculate the gross/net development value (GDV/NDV).