Agenda item

The Cabinet Member for Corporate Services introduced the report and outlined the procurement process the Council had undertaken and that three bidders had been selected in a shortlist. One bidder had subsequently left the process, and the preferred tenant had the most experience in running large-scale hotels. The Council incurred a significant running cost and a loss of rent on the building while it was unoccupied.

The Cabinet Member for Communities, Leisure and Arts stated that the proposal in front of the Committee was the result of an extensive procurement exercise on Archbishop’s Palace, including a previous exclusivity period from a previous preferred tenant, a further tender process, and public consultation. It was stressed that Archbishop’s Palace was a historic building in Maidstone and that the preferred tenant presented to the Committee provided the best business case for the venue.

Concerns were raised over the report presenting a single preferred bidder.

The Director of Finance, Resources and Business Improvement stated that the procurement had involved Councillors and had been carried out in accordance with the framework agreed by Cabinet and recommended by the Committee in July.

The Committee debated the merits of the preferred bidder and raised several concerns on the proposal including whether separate leases of the dungeon and gatehouses were feasible, whether public access to walking on site could be maintained, and whether an additional break clause of the contract could be included for the Council. Further concerns were raised on whether dialogue with English Heritage had taken place, whether a viability analysis had been undertaken and whether the internal rates of return of the preferred tenant were sufficient.

The Committee emphasised the important and unique value of Archbishop’s Palace in Maidstone but recognised that the Council incurred a significant running cost while the building was still vacant. The Committee were concerned that running Archbishop’s Palace would be a particular challenge.

During the discussion it was proposed and seconded that the Committee be recommended to refuse the recommendations on the report and request that Cabinet note the concerns raised during the discussion. This motion was not carried.

A subsequent motion to resolve the recommendations on the report and request that Cabinet give further consideration to the concerns raised during the discussion was moved and seconded. When put to the vote, the substantive motion was carried.

RESOLVED to RECOMMEND to CABINET:

·  To agree to a capital expenditure of £1.5 million.

·  To delegate authority to the Director of Finance, Resources and Business Improvement to select and appoint professional advisers to obtain all relevant consents, enter into contracts for applicable services as necessary, and to enter into a conditional agreement for lease with the preferred tenant.

·  To delegate authority to the Head of Legal Services to negotiate and complete all necessary legal formalities for the agreement for lease and purchase of services as set out above.

·  To request further consideration be given to: break clauses in the contract, separate leases for the dungeon and gatehouse, public access to the site, dialogue with English Heritage, internal rates of return and a viability analysis.

Note: Councillors Conyard, Harper and S Thompson wished to minute their dissent to the resolution.