Agenda item

The appendices A, B, C, D and F to the report relates to information which following a public interest test the public is likely to be excluded by virtue of paragraph 3 of Part 1 of Schedule 12A of the Local Government Act 1972 ie. Information relating to the financial or business affairs of any particular person (including the authority holding that information).

Matter for Decision

 

      i.         The Council’s General Fund Asset Management Plan updated in March 2023 and in the Future Office Accommodation Strategy approved at Strategy and Resources Committee in October 2022 are an important part of the Council’s transformation programme ‘Our Cambridge’ to achieve significant annual savings for the General Fund which can protect frontline services.

    ii.         There have been some initial quick wins. In the Guildhall, the Council has piloted space for small businesses working with Allia to establish a Future Business Centre, generating income. The development of an operational hub at Cowley Road has merged two existing sites and 171 Arbury Road Office has been vacated and those premises are being rented out to two charities reducing operational costs as well as generating income. The next steps are to consider: the remodeling of the Council’s office accommodation to ensure that it meets modern requirements and expectations of council staff, tenants and the public; reducing operational costs across the whole building lifecycle; how to reduce costs to attain Net Zero; and generating more income for the council.

   iii.         This report outlines the findings from the feasibility report undertaken for the Guildhall in November 2023. The findings demonstrate that the consolidation of Council offices with £16m generated from the disposal of Mandela House and refurbishing the Guildhall for £35m (Option 1) produces a positive Net Present Value of £22m for the Council in 30 years with a payback in 9 years when compared to the Do Nothing option.

  iv.         Option 1 generates:

·      significant operational savings of £918k per annum for Mandela House and £1.342m for the Guildhall.

·      an opportunity for an enhanced commercial revenue stream, through both commercial office letting and more flexible and accessible events spaces generating over £700k in net revenue per annum.

·      a reduction in the Council’s exposure to an estimated c. £500k annual cost if refurbishment is to Net Zero

    v.         The recommended next steps are to further develop design work to RIBA 2 for the Guildhall and to develop a more detailed appraisal analysis for both the Guildhall and Mandela House.

  vi.         In March 2022 a report to the Environment and Community Scrutiny Committee approved the updated vision for the Market Square:

·      “An inspiring, strategic public realm heart to the city centre, the market square will be welcoming to all to work, visit and spend time here. A 21st century international and local multi-generational and multi-cultural space, celebrating Cambridge’s history and heritage, it integrates a thriving, sustainable, accessible, safe and open environment, connecting the surrounding streets with spaces to shop, wander, stop and socialise. A bustling 7-day market, space for seating and eating, additional business and social opportunities and engaging and inclusive cultural events will add to the richness of the area, making this an active day and evening hub in the city centre for local businesses, residents, and the wider community.”

 vii.         Having reported in March 2022 on the initial design work and consultation already undertaken on the Market Square, the recommended next steps are to: progress the current designs on the agreed vision; support the market, its shoppers and its traders by continuing with the essential business as usual maintenance works; and for the Executive Councillor to consider a report at the Environment and Community Scrutiny Committee in March 2024 on the current market legal status.

viii.         Should procurement be approved, the winning design and consultant team will be asked to provide decanting options that maintain current levels of trade which, if there is future approval, will be part of the planning submission for refurbishment.

  ix.         The Corn Exchange is one of the largest venues for concerts outside London and within East Anglia, but has significant operating costs per annum (excluding staff costs) and the 10 year projection of capital costs required for the listed building based on a 2021 condition report is in the region of £5.5m This includes some carbon reduction measures.

    x.         With recommendations to take forward designs to RIBA 2 for the Market Square and Guildhall in place, this report makes the case for a feasibility report including RIBA 2 designs for refurbishment to be undertaken for the Corn Exchange to consider how operating costs can be reduced and how the spend per head can be improved by offering a more attractive destination generating more income for the Council.

  xi.         By creating a Civic Quarter project including the Guildhall, Market Square and Corn Exchange, the Council will consider how it can create a more attractive destination and increase visitor numbers for the Market, Corn Exchange and businesses in the area, whilst providing modern flexible office facilities for its own staff to improve staff retention. With a more attractive Civic Quarter destination, with increased visitor numbers the Council will be looking to enhance the economic multiplier effect in the quarter as well as reducing annual operating costs of its civic spaces through the Net Zero refurbishment designs and enhanced placemaking.

 xii.         This work will also contribute towards the Business Case for matched funding of £1.5m announced by the Cambridgeshire & Peterborough Combined Authority on November 30th 2023.

xiii.         Creating a single project team with a single design and consultant brief for the Civic Quarter offers an enhanced placemaking opportunity, better value for money in procurement and a more robust business case for the Council in maximizing revenue income, reducing operational costs and an enhanced destination.

xiv.         £1,450,000 is recommended, based on advice from independent cost consultants, for the overall budget to procure design and consultancy services to RIBA 2 for the Civic Quarter managed through a single project and professional team.

xv.         It is proposed that the work undertaken by the appointed design and consultant team will provide design proposals and detailed appraisal analysis on a range of refurbishment options allowing the Council to make an informed choice on the next steps for its Civic Quarter at the November 2024 S&R Committee.

xvi.         Should approval be granted to proceed with full design team procurement, stakeholder engagement will be channelled through two Civic Quarter Steering groups. An Internal Civic Quarter Steering group will focus on the design requirements for the Civic, Office, Customer Services and Cultural Events spaces required by the council.

xvii.         An External Civic Quarter Steering Group will consider the views of market traders, the public and the Civic Quarter Liaison Group. The Civic Quarter Liaison Group will replace the Market Square Liaison Group. A communications company with a track record in Cambridge will be appointed to assist the Council with this external stakeholder engagement and the Council’s online consultation portal (Citizen Lab) will be used to ensure all views are captured. This engagement will start in January 2024 with meetings held with Market Traders and the Civic Quarter Liaison Groups.

xviii.         A members steering group will provide feedback to the appointed design team on civic requirements.

Decision of the Executive Councillor for Finance and Resources

 

      i.         Note the report and the development of the Proof of Concept on the Guildhall and associated cost and revenue estimates for the Options 1 and 2.

    ii.         Approve the delegated authority to Chief Operating Officer in consultation with the Executive Councillor for Strategy & Resources to appoint a design team through a compliant procurement exercise for the Civic Quarter project.

   iii.         Agree that:

·      A budget proposal of £1m for progression to the end of RIBA stage 2 for the Guildhall, is put forward to be considered as part of the Council’s budget setting process, funded from the Civic Quarter Development Reserve, and

·      In principle, £0.450m should be allocated for progression to the end of RIBA stage 2 for the Market Square and for a feasibility and refurbishment RIBA 2 design for the Corn Exchange with final approval delegated to the Executive Councilor for Strategy and Resources. £0.300m to be allocated from the Civic Quarter Development Reserve and £0.150m from the existing Market Square capital scheme.

  iv.         2.5 Note the review by Cambridge Investment Partnership (CIP) of the options of Mandela House to provide a capital receipt and profit return for the Council.

    v.         2.6 Request that a further report and recommendations be brought back to Committee in November 2024 to enable review and approval of:

·      the business case options for Mandela House, including redevelopment, disposal and refurbishment, and for the refurbishment of the Civic Quarter

·      progression to planning applications

·      a procurement strategy of a construction or development partner

Reason for the Decision

 

As set out in the Officer’s report.

 

Any Alternative Options Considered and Rejected

 

Not applicable.

 

Scrutiny Considerations

The Development Assistant Director said the following in response to Members questions:

 

      i.         Sections of the appendix were not in the public domain due to significant information that was considered intellectual property and commercially sensitive.

    ii.         The Market, Guildhall and Corn Exchange was about the public realm. To create a greater sense of space.

   iii.         There are synergies between the Guildhall and the Corn Exchange, as conferencing facilities would be available at both.

  iv.         By putting the bids in for all three (Guildhall, Market, Corn Exchange) better for value that doing three separate bids.

    v.         There would be extensive stakeholder engagement.

  vi.         If numbers were increased in the Civic Quarter area, would demonstrate increased income for the area. That would require creative work from bidders.

 vii.         The Customer Service Centre in Mandela House would not close until there was another space for them to move to.

viii.         Would undertake extensive surveys and design work and bring back to Committee in November.

  ix.         A high-level appraisal had been done on Mandela House. When returning to the Committee in November, Members would be given business case options on how to proceed next.

    x.         The design input would be workshops from design consortium, including Members steering group.

  xi.         There would be flexibility around the amount of desk space for the City Council and commercial use.

 xii.         Concerns about design had already been captured through meetings with Market Traders. Further input would be sought from Market Traders regarding the design of future market.

xiii.         Wished to explore what design improvements could have an effect on business for the Corn Exchange.

The Committee unanimously endorsed the recommendations 7-1.

 

The Executive Councillor approved the recommendations.

 

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

 

No conflicts of interest were declared by the Executive Councillor.