Agenda item

The Lead Member for Housing and Health introduced the report and explained that the Council purchased Granada House in 2016 as the town centre was due to be extended. The building was in poor condition. The Council had let the building on a long-term basis to Maidstone Property Holdings, however significant planned maintenance works were required, as there had been very little work undertaken since its construction in the 1930s.

The decommissioned Policy and Resources Committee had previously agreed the building’s refurbishment. A tender exercise had taken place, but the Executive were dissatisfied with the value for money aspect of the bid received, and so  a second procurement exercise is currently being undertaken. The projected cost as contained within Exempt Appendix 1 to the report had been set by the Executive.

If approved, the refurbishment works would provide benefits such as increased rental levels, increased demand for the apartments and a reduction in the cost of undertaking reactive repair works. The proposed works would take six months, likely commencing from March or April 2023. There would be an option to install solar panels at further expenditure, although this would be considered at a later date once a contractor had been appointed.

RESOLVED: That the public be excluded from the meeting for the following item of business because of the likely disclosure of exempt information for the reason specified, having applied the Public Interest Test:

Head of Schedule 12A and Brief Description

Exempt Appendix 1 to Item 16  –   3 – Financial/Business

Granada House Refurbishment     Affairs.

The Committee entered into closed session between 7.16 p.m. to 7.28 p.m. The questions raised focused on the specification’s contents and the works projected costs, as contained within Exempt Appendix 1 to the report.

In response to questions, the Director of Regeneration and Place stated that the relevant Council team and Pellings as the building surveyors would ensure that the specification achieved value for money, and the Council’s Section 151 Officer, the Director of Finance, Resources and Business Improvement would have to sign-off the procurement process and finalised contract sum once agreed in accordance with the Council’s financial procedure rules, which would include ensuring its value for money.

Several Members of the Committee felt that further clarification on the specifications contents was required, with particular reference made to ensuring that the building would be refurbished to a high standard within the projected cost envelope contained within Exempt Appendix 1 to the report and achieve value for money.

In response, the Director of Regeneration and Place reiterated that the previous tender exercise undertaken had resulted in the receipt of a bid at a significantly higher cost than the desired (by the Executive) cost envelope within Exempt Appendix 1 to the report. The bid was rejected by the Executive, with a second procurement exercise ongoing against a lower target scheme cost, with a value engineering exercise to be undertaken to achieve the best possible specification for the works. The director stated that priority would be given to ensuring the improving the external envelope the building and achieving compliance with health and safety requirements for the building’s individual apartments, with value engineering to take place on certain components that could be refurbished rather than replaced. The director provided assurance that a suitable refurbishment could be completed within the target budget proposed. The issues, in terms of rapidly rising construction costs, being faced by the construction sector, were outlined.

Consideration was given to delaying the proposals consideration to the Committee’s next meeting, to allow for further detail on the project specification to be provided to ensure that value for money was achieved in the use of public funds.

In response, the Director of Regeneration and Place strongly advised against delaying the proposals consideration for several reasons which included that the Council’s obligations as a landlord needed to be met, particularly given the national focus on Housing Providers not prioritising disrepair within their portfolios, the length of time since the building’s purchase, to prevent a further loss of confidence from the professional firms working on the proposal and reduce additional costs through continued loss of rental income. The potential negative impact to the Council’s reputation, alongside the risk that a poor-quality contractor could be appointed if the specification did not undergo a value engineering exercise, was also highlighted.

The Committee felt that the refurbishment works should be progressed without delay due to the importance of ensuring that the building was improved and made suitable for future use.

RESOLVED: That the Executive be recommended to:

1.  Agree to carry out the proposed refurbishment works to Granada House up to the Total Scheme Cost as outlined in Table 1 within Exempt Appendix 1 – Financial Summary to the report.

2.  Enter into contract with the preferred contractor to carry out the refurbishment works to Granada House.

3.  Agree that:

a) Officers explore fully with Pelling’s (the appointed Employers Agent) and the appointed Contractor the merits of providing solar PV to the property as a way of off-setting electrical use.

b) this option and additional expenditure (as outlined in Table 2 within Exempt Appendix 1 – Financial Summary to the report) is only pursued after consultation, post contract award with the Lead Member on the Executive for Housing and Health.

4.  Give delegated authority to the Director of Finance, Resources and Business Improvement to enter into any related appointments, legal actions, deeds, contracts and agreements which may be required to facilitate the refurbishment works required.

5.  Authorise the Head of Mid Kent Legal Services is to appoint the Solicitors required to negotiate and complete the necessary contract documentation, deeds and agreements associated with the refurbishment works on the terms as agreed by the Director of Finance, Resources and Business Improvement.