Decision details

Delegate authority to the Strategic Director to select and Investment Partner.

Matter for Decision

The report recommended the establishment of an Investment Partnership as the best way for the Council to secure its objectives from the redevelopment of many of its sites.

 

Decision of the Leader

     i.        Delegated authority to a Strategic Director to set up an Investment Partnership subject to legal due diligence and following consultation with all members of the Strategy and Resources Scrutiny Committee.

 

Reason for the Decision

As set out in the Officer’s report.

 

Any Alternative Options Considered and Rejected

Not applicable.

 

Scrutiny Considerations

 

The Committee received a report from the Managing Director, Housing Development Agency.

 

The Committee made the following comments in response to the report:

     i.        Questioned what would happen to the vehicle if the partner became financially distressed and asked if the Council would have the right to acquire shareholdings.

    ii.        Questioned what the scenario was for the vehicle to be wound up either voluntarily or non-voluntarily.

   iii.        Commented that it would be difficult to draft the shareholders agreement to cover all eventualities but expressed concern about the counterparty using their position to extract a leverage on a commercial basis. 

  iv.        Asked what was meant by ‘invest’ and how the land would be valued.

 

The Managing Director, Housing Development Agency and Strategic Director said the following in response to Members’ questions:

     i.        The Council could write what it wanted into the Member Agreement. The vehicle used would be determined on a site by site basis. These arrangements would be no worse than if the Council used a developement agreement.

    ii.        The Council would learn from partner agreements that were in place at the moment and ensure that they covered the Council as far as legally possible.

   iii.        Would ensure that there were provisions within the member agreement to deal with the scenarios outlined by members. 

  iv.        Clarified that the term ‘invest’ meant that the Council would value its land at the point it was put into an investment partnership, technically no money changed hands at this point. The Partner would put money into the scheme. The Council would retain freehold ownership of the land and would either take a capital receipt or take a value of the capital receipt in revenue terms as part of the partnership deal.

 

Councillor Cantrill requested that all members of the Strategy and Resources Scrutiny Committee were consulted prior to the set-up of an Investment Partnership and that the recommendation was amended accordingly.

 

The amended recommendation (additional text underlined, deleted test struck through):

To delegate authority to a Strategic Director to set up an Investment Partnership subject to legal due diligence and following consultation with the Leader and Opposition Spokesperson all members of the Strategy and Resources Scrutiny Committee.

 

The Committee unanimously resolved to endorse the amended recommendation.

 

The Leader approved the amended recommendation.

 

Conflicts of Interest Declared by the Executive Councillor (and any Dispensations Granted)

No conflicts of interest were declared by the Executive Councillor.