Issue - meetings

Springfield Mill

Meeting: 23/01/2019 - Policy and Resources Committee (Item 161)

161 Property Acquisition

Additional documents:

Minutes:

Mr Connors gave a presentation to the Committee outlining a proposal for the acquisition of a block of flats. The block consisted of 14 flats with allocated car parking. The investment was projected to reach a 5.04% Internal Rate of Return (IRR), which was consistent with the minimum IRR of 5% required in the Councils Housing Development and Regeneration Investment Plan. The purchase price had been negotiated with the developer, and this price included a discount due to the transaction being a bulk purchase.

 

In response to questions from the Committee regarding the risks to the Council around the rental projections, Mr Connors confirmed that a surveyor had confirmed all of the figures in the report. Mr Cornall clarified that risk needed to be considered for the development overall – a number of factors reduced the risk profile including working with an established house builder with a good reputation, the location and that that a future increase in value of the properties had not been incorporated into the IRR calculations.

 

The Committee noted that the proposal was within the Council’s risk appetite, and therefore the opportunity should be pursued.

 

RESOLVED: That

 

1.  The financial returns for the scheme shown at Exempt Appendix 2, which support the Housing Development and Regeneration Investment Plan, are approved.

 

2.  The Director of Finance and Business Improvement is granted delegated authority to enter into a development agreement with Redrow Homes, together with any related appointments, legal actions, deeds and agreements which may be required to facilitate the purchase.

 

3.  The Head of Mid Kent Legal Services is authorised to appoint the solicitors required to complete the necessary contract documentation, heads of terms, deeds and agreements associated with the purchase on the terms as agreed by the Director of Finance and Business Improvement.

 

4.  The Director of Finance and Business Improvement is granted delegated authority to grant such lease(s) of the Property as necessary on terms to be agreed, and authorise completion of such lease(s) and all ancillary deeds and agreements and the Head of Mid Kent Legal Services be authorised to complete the necessary legal formalities for such lease(s) in due course.

 

Voting:  For - 11  Against - 2  Abstentions – 0