Issue - meetings

RESOLVED: That

1.  Capital expenditure of up to £1.5 million be agreed;

2.  The Director of Finance, Resources and Business Improvement be given delegated authority 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.

3.  The Head of Legal Partnership be given delegated authority to:

  i.  negotiate and complete all necessary legal formalities for the agreement for lease, the lease and purchase of services as set out above and

  ii.  negotiate, execute and complete all necessary agreements, deeds and documents arising from or ancillary to the decision.

(See Record of Decision)

The Cabinet Member for Corporate Services introduced the item, emphasising the importance of finding a use for the historically significant site and recovering the running costs. A second tender exercise had taken place, following the withdrawal of Balfour Hospitality’s proposal; three proposals were received, with one withdrawn. The proposed leaseholder was an experienced operator in running hotels and events, including weddings.

The proposal would include £1.5 million in expenditure from the Council, with the expected rate of return classed as good over the proposed 35 year lease term.

The Cabinet Member for Communities, Leisure and Arts explained that the tender exercise had cast a wide net and lasted between six to seven months, with discussions with Historic England referenced. It was emphasised that public access to the site would be retained, with any changes to the site to be considered by the Planning Committee as required. Feedback from the Corporate Services Policy Advisory Committee had included whether the dungeon and gatehouse could be separated; this could be looked into, with any investment required likely to lead to an uplift in the rental fee charged.

The Committee entered into closed session at 7.16 p.m. to discuss the information contained within the exempt appendix to the report.

RESOLVED: That the public be excluded from the meeting for the following item of business due to the likely disclosure of exempt information for the reasons specified having applied the public interest test.

During the discussion, the Committee asked questions on conservation of the site, maintaining public access, the proposed tenant and contract terms, maintenance, and whether the dungeon and gatehouse would be considered under a separate lease.

In response:

The Director of Finance, Resources and Business Improvement stated that:

·  The Council would not generate any rental income for the first six months of the lease but would save the £250k annual running cost of the building, and this has been built into the income generated over the lease length;

·  The proposed tenant had over 20 years’ experience, with assurances given that the type of lease proposed, including the break clause, was common within the Leisure and Hospitality industry. The Council’s position would be assured through various mechanisms within the lease that were outlined to the Committee; and

·  Consideration could be given to bringing the dungeon back into use, and if possible, this would lead to an uplift in the rent charged for the site.

The Interim Property Consultant outlined the extensive surveys conducted by the Council on the site’s condition as part of the proposed programme of works and gave assurances that public access to the site would be maintained and included within the lease.

The Committee returned to open session at 8.13 p.m.

The Committee supported the proposal as it would bring the site back into use, with it felt that there were no other suitable options  ...  view the full minutes text for item 64

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  ...  view the full minutes text for item 79