Agenda and decisions

(Special), Cabinet
Tuesday, 26th February, 2019 9.00 am

Venue: Executive Meeting Room - The Guildhall - Floor 3

Contact: Joanne Wildsmith, Democratic Services Tel 9283 4057  Email: joanne.wildsmith@portsmouthcc.gov.uk

Webcast: View the webcast

Items
No. Item

1.

Apologies for Absence

2.

Declarations of Interests

3.

Record of Previous Decision Meeting - 5 February 2019 pdf icon PDF 256 KB

A copy of the record of the previous decisions taken at Cabinet on 5 February 2019 are attached.

 

RECOMMENDED that the record of decisions of the Cabinet meeting of 5 February 2019 be approved as a correct record for signing by the Leader.

 

4.

Leamington House and Horatia House Next Steps pdf icon PDF 820 KB

The report by the Director of Housing, Neighbourhood and Building Services is to report to Cabinet the results of the feasibility work to strengthen, clad and install sprinklers into Leamington House and Horatia House and the options for the next steps.

 

RECOMMENDED that Cabinet:

 

(1) Notes the results of the feasibility work to strengthen, clad and install sprinklers into Leamington House and Horatia House;

(2) Agrees that it is financially unviable to undertake the works to strengthen, clad and install sprinklers into Leamington House and Horatia House, and as a result;

(3) Agrees that on completion of the permanent rehousing of all households from Leamington House and Horatia House, the two blocks will be removed from charge, decommissioned and secured;

(4) Gives delegated approval to the Director of Housing, Neighbourhood and Building Services authority to incur costs to carry out decommissioning works of Leamington House and Horatia House and secure both blocks;

(5) Agrees that there is an opportunity for the sites to be redeveloped to create affordable/social housing and regeneration in this area of the City and requests the Regeneration Directorate working with the Housing Directorate to provide a report to Cabinet with an options appraisal for the demolition of Leamington House and Horatia House and redevelopment of the sites in consultation with the local and wider Somers town community and stakeholders;

(6)  Notes the loss social housing units to the Housing Revenue Account and requests that the options appraisal for the development of the Leamington House and Horatia House sites includes the re-provision of a minimum of 272 social housing units to be held in the HRA.

Decision:

The Cabinet:

 

(1) Noted the results of the feasibility work to strengthen, clad and install sprinklers into Leamington House and Horatia House;

(2) Agreed that it is financially unviable to undertake the works to strengthen, clad and install sprinklers into Leamington House and Horatia House, and as a result;

(3) Agreed that on completion of the permanent rehousing of all households from Leamington House and Horatia House, the two blocks will be removed from charge, decommissioned and secured;

(4) Gave delegated approval to the Director of Housing, Neighbourhood and Building Services authority to incur costs to carry out decommissioning works of Leamington House and Horatia House and secure both blocks;

(5) Agreed that there is an opportunity for the sites to be redeveloped to create affordable/social housing and regeneration in this area of the City and requests the Regeneration Directorate working with the Housing Directorate to provide a report to Cabinet with an options appraisal for the demolition of Leamington House and Horatia House and redevelopment of the sites in consultation with the local and wider Somers town community and stakeholders;

(6)  Noted the loss of social housing units to the Housing Revenue Account and requests that the options appraisal for the development of the Leamington House and Horatia House sites includes the re-provision of a minimum of 272 social housing units to be held in the HRA.

5.

Residents' Parking Programme of Consultation Update pdf icon PDF 108 KB

The report by the Director of Regeneration updates members on progress on the Residents' Parking Programme of Consultation approved on 31 July 2018.

Additional documents:

Decision:

 

The Cabinet agreed that

(1)       the progress made between August 2018 - February 2019 on the Residents' Parking Programme be noted;

(2)       the next areas for informal survey were reconfirmed, as per the approved Programme;

(3)       the anticipated Residents Parking Zone (RPZ) Programme timescales were noted (as set out in Appendix A)

6.

Board Composition of Portsmouth City Council companies

A report IS WITHDRAWN regarding advice on the board composition of companies controlled by the Council.

Decision:

(This report was not published or considered at this meeting)

7.

Exclusion of Press and Public

“That, under the provisions of Section 100A of the Local Government Act, 1972 as amended by the Local Government (Access to Information) Act, 1985, the press and public be excluded for the consideration of the following item on the grounds that the report(s) contain information defined as exempt in Part 1 of Schedule 12A to the Local Government Act, 1972”.

 

The public interest in maintaining the exemption must outweigh the public interest in disclosing the information.

 

Under the Local Authorities (Executive Arrangements) (Meetings and Access to Information) England Regulations 2012, regulation 5, the reasons for exemption of the listed item is shown below.

 

Members of the public may make representation as to why the item should be held in open session.  A statement of the Council’s response to representations received will be given at the meeting so that this can be taken into account when members decide whether or not to deal with the item under exempt business.

 

(NB     The exempt/confidential committee papers on the agenda will contain information which is commercially, legally or personally sensitive and should not be divulged to third parties.  Members are reminded of standing order restrictions on the disclosure of exempt information and are invited to return their exempt documentation to the Local Democracy Officer at the conclusion of the meeting for shredding.)

 

Item

 

8. Ravelin Group of Companies (appendices)

 

9. City Centre Regeneration (Heads of terms) (appendices)

 

10. MMD Review Update (appendices)

Paragraphs

 

3&5*

 

3&5

 

 

3&5

           

 

*Exemption Paragraph Numbers

3 - Information relating to the financial or business affairs of any particular person (including the authority holding that information)

5 - Information in respect of which a claim to legal professional privilege could be maintained in legal proceedings.

 

 

Decision:

(The resolution to uphold the exempt status of the specified appendices to the next 3 reports was passed.)

8.

Ravelin Group of Companies pdf icon PDF 287 KB

The report by the Director of Regeneration sets out the purpose and key objectives for Ravelin Hold Co and any incorporated subsidiaries.

 

(Appendices B & C contain exempt legal advice)

Additional documents:

Decision:

The Cabinet APPROVED:

 

(1)       That the business case and purpose for Hold Co be approved, including delegating authority to the Director Regeneration and City Solicitor in consultation with the s.151 officer to create a new subsidiary company to support the delivery of HRA projects with development management and project management services.

 

(2)       To note that the need for the creation of a fit-for-purpose Board of Directors for each of the incorporated Ravelin companies based around an understanding of the skillsets required to support the company in both a commercial and local authority environment.

 

(3)       That new directors are appointed to Hold Co and Prop Co to ensure the companies can remain quorate and able to trade.

 

And RECOMMENDED TO COUNCIL approval of the following recommendations:-

 

(4)       That authority is delegated to the Director of Finance and Section 151 Officer in consultation with the Leader of the Council, upon agreement of the business justification case's for each of the proposed development sites, to:-

 

(i)                     make changes to the budgetary framework as necessary

 

(ii)               To borrow as required for Ravelin Group development purposes, subject to a robust financial appraisal approved by the Director of Finance & S151 Officer that demonstrates the delivery of the best return to Portsmouth City Council and has proper regard to the following:

 

·         The relevant capital and revenue costs and income resulting from the investment over the whole life of the development.

 

·         The extent to which the investment is expected to deliver a secure ongoing income stream.

 

·         The level of expected return on the investment.

 

·         The payback period of the capital investment.

 

·         The tax status and transactional tax events associated with any land transfers or activity of the companies.

9.

City Centre Regeneration (Heads of Terms) pdf icon PDF 391 KB

This report by the Director of Regeneration provides the Cabinet with a broad update on the regeneration of Portsmouth's City Centre; an item was previously deferred from Cabinet on 5 February 2019.

 

N.B. Appendices B (legal advice) and C (Heads of Terms) are exempt.

Additional documents:

Decision:

The Cabinet:

 

(1)       Noted the work to date on the various workstreams that are being aligned to bring about the successful culturally-led regeneration of Portsmouth City Centre.

 

(2)       Agreed the Heads of Terms for the proposed joint venture LLP between Portsmouth City Council and DV4 Limited.

 

(3)       Delegated authority to the Director of Finance and Information Services, the Head of Legal and the Director of Regeneration to negotiate and enter into the joint venture LLP in line with the agreed Heads of Terms.

 

(4)       Delegated authority to the Director of Regeneration the management of spend on project related works against the capital budgets for the City Centre Regeneration. Spend will include negotiations and agreement of contracts, to consult on design options and develop a feasibility study in conjunction with residents and stakeholders and to ensure that the joint venture is fundable and delivers economic and commercial benefits for the Council as well as the wider regeneration benefits for the city as a whole.

 

(5)       Delegated authority to the Director of Regeneration to work with the developers, the community and other stakeholders to co-design and implement a worthwhile temporary use strategy for the City Centre, with a particular focus on the Tricorn site.

 

(6)       Delegated authority to the Director of Regeneration to create a consultation space within the City Centre to encourage ongoing open and transparent communication with all members of the community.

 

(7)       Noted that:

 

(i)         The S.151 Officer, in consultation with the Leader, has delegated authority to borrow as necessary for the Joint Venture limited liability partnership which is established to deliver the City Centre re-development as approved in the report to the Council consider on 12th February 2019.

 

(ii)        Prior to any borrowing described above, a full business case and financial appraisal is prepared that can satisfactorily demonstrate with good certainty that cost savings / additional income or value uplift of the development that will accrue directly to the Council will at least cover the cost of that borrowing on a sustained basis over the lifetime of the borrowing undertaken.

10.

MMD Update Review pdf icon PDF 249 KB

The report by the Port Director and Director of Finance & Section 151 Officer is to consider the assessment of the available options for the use of the MMD site, based on a full options appraisal and financial evaluation (including risks) prepared over a 20 year period.  Accordingly, to approve a preferred option.

Decision:

1. The Cabinet adopted Option 2 as their preferred option.

 

2. The Cabinet agreed that a loan facility of £15m be provided to MMD (subject to decisions 3, 4 and 5 below) for the necessary Capital Investment required to deliver a return of £19.3m over the 5 year period 2019/20 to 2023/24, which was approved in principle by City Council on 12 February 2019.

 

3. The Council loan is provided at a rate consistent with State Aid rules.

 

4. Any draw down on the loan facility by MMD is subject to the following:

 

a) The 20 Year Business Plan demonstrates the continuing viability of MMD and that the continued operation of MMD continues to deliver the best financial return compared with all other viable alternatives.

 

b) The Capital Investment is necessary either for the sustainability of existing income streams or for the generation of additional income.

 

c) The proposed Capital Investment itself represents the most favourable return when assessed against the balance of:

 

i) The financial return on a Net Present Value basis and over the whole life of the asset created versus other potential options for the same outcome.

 

ii) The relative risk of each alternative option.

 

5. Continued parent company support and the availability of the loan facility is subject to the annual review and approval of a satisfactory 3 Year Business Plan and 20 Year Future Forecast which must demonstrate to the shareholders satisfaction that:

 

i) The assumptions that underpin the 3 Year Business Plan are robust with a more than reasonable chance of being achievable.

 

ii) That the 3 Year Business Plan is prepared to illustrate the financial effect of reasonable optimistic and reasonable pessimistic scenarios in order that the Shareholder is aware of the reasonable range of risk associated with the "Base Case" Business Plan.

iii) Recognising the exposure of the company to cyclical trade factors and adverse weather, that the overall 3 to 5 Year financial results of the Company provide an overall net return to the Shareholder over the period taking into account all returns received by the Shareholder through rents, dues and all other profit elements of services provided by the Shareholder (including the Portsmouth International Port).

 

6. The Council keeps under review the returns that would reasonably be expected to be achieved from alternative uses of the site, undertaking a formal review at the earlier of every 3 years or failure to achieve the financial performance set out in resolution 5 above.

 

7. That there be an annual information report to Council setting out the financial position of MMD.