Brighton & Hove City Council - Agenda item

Report of the Executive Director Economy Environment & Culture (copy attached)

RESOLVED: That the Committee -

(i) Authorised the Executive Director for Economy Environment & Culture, in consultation with the Executive Lead – Strategy, Governance & Law and the Director of Finance, to enter into the Conditional Land Acquisition Agreement with JTC Fund Solutions (Jersey) Ltd and SG Kleinwort Hambros Trust Company (CI) Ltd1 as summarised in Appendix 1.

(ii) Authorised the Executive Director for Economy Environment and Culture and the Executive Lead Strategy, Governance & Law, following consultation with the Group Leaders, to make any final minor amendments to the CLAA.

(iii) As previously agreed by P&R committee in April 2016, to confirm ongoing authorisation for officers to retain the current conference subvention budget of £1m per annum in order to ensure necessary support for conferencing in the city during any future closure period and to attract conferences to the new venue once opened.

(iv) Agreed that construction of the new venue will be funded by the capital receipt generated from the sale of the Brighton Centre site, rent from the appointed venue operator, net savings achieved on the current Brighton Centre operational budgets and up to 50% of the forecast additional future business rates income stream, set out in the funding table in the financial implications of this report.

(v) Agreed that the successful Local Growth Fund bid (Round 3) of £12.1m be utilised to begin a package of Early Works to prepare the Black Rock site for development.

(vi) Agreed that the Brighton Centre Redevelopment Reserve, currently at a value of £2.8m, will continue to be used to fund internal project development costs incurred by the council on the Central and Black Rock sites as set out in paragraph 4.13 for a period of up to 8 years.

(vii) Agreed that the Venue Operator Procurement Strategy be considered by a future meeting of PR&G at the 3rd Condition date, with a view to selection of a Venue Operator by the 4th Condition date.

(viii) Noted that PR&G Committee will be asked to confirm project proposals including the options for housing developmenton both the Black Rock site and Brighton Central site at a future meeting (at the stage referred to as Condition 4).

(ix) Noted that a future PR&G Committee will be asked to confirm arrangements to enter into the terms of the building contract (as per Condition 6) and also the Venue Operator Agreement (at the stage referred to as Condition 3).

(x) Agreed that a future PR&G committee will make any decisions in relation to land assembly on either of the two sites, in relation to Condition 6.

(xi) Agreed to establish a cross-party Member Working Group, consisting of 1 Member from each Group, to oversee the next stages of the project and that the Executive Director of Economy, Environment & Culture and the Executive Lead Strategy, Governance & Law be granted delegated authority to agree the terms of reference for the Working Group following consultation with Group Leaders.

87.1 The Committee considered the report of the Executive Director Economy Environment & Culture which sought Members agreement to enter into a Conditional Land Acquisition Agreement (CLAA), between Brighton & Hove City Council and a trust owned by Aberdeen Standard Investment (ASI).

87.2 Councillor Janio thanked officers for the briefings he had had, and said that this was a complicated matter and was therefore pleased that there would be a cross-party Member Working Group established to oversee the next stages of the project. He was excited with the prospect of there being a ten thousand seat venue, but was concerned that the development of Valley Gardens (Phase 3) would impact on people being able to travel to and from the new venue, and therefore the proposals for Valley Gardens should be reviewed. The Executive Director Economy Environment & Culture said the transport strategy for the Waterfront project would follow the agreement of the CLAA, and a professional team would be appointed and they would work with all departments to ensure any strategy would join up with all projects the Council was progressing.

87.3 Councillor Sykes was pleased that the project was coming together. He said he had had some concerns over transport, but the Executive Director Economy Environment & Culture had already addressed that issue. However, his group also had some concerns over sustainability, and in a flagship development of this nature the Council should be at the forefront of building sustainability both in construction and operation. He referred to paragraph 7.11 in the report and noted that the Council would be entering into a ‘design and build’ contract which would give value for money and cost certainty, and said that whilst some money may be saved that could be at the cost of sustainability.

87.4 Councillor Sykes proposed the following Green Group amendment to the recommendations:

To amend recommendation 2.8 in bold italics as shown below:

2.8 Note that PR & G Committee will be asked to confirm project proposals including the options for housing development on both the Black Rock site and Brighton Central site at a future meeting (at the stage referred to as Condition 4).

He noted that retail businesses were currently suffering and given the long period of time before the project would be completed, it was not known what the situation would be with retail then and how it may impact on this project, and so it would be sensible to have some flexibility to include some housing in the development. The proposed amendment raised the profile of the balance between retail and housing.

87.5 Councillor Mac Cafferty formally seconded the amendment. He said that when the project was first considered the retail sector was much stronger, and by including housing as an option it would be a way of getting additional value from the land.

87.6 Councillor Wealls noted that Housing was one of the options for the development and therefore asked whether the amendment was necessary. Councillor Mac Cafferty said that the original scheme was much heavier on retail, and the amendment was a way of underlining the fact that housing could be incorporated into the scheme.

87.7 The Executive Director Economy Environment & Culture said that sustainability would be considered in the construction and operation of the project through the agreed development strategy at Condition 4, and that would come back to committee in due course. With regard to the amendment he said the project could include both retail and housing. There were significant retail challenges nationally, but Brighton had been trading well, and the best retail destinations were those that had received investment.

87.8 Councillor Bell asked if the amendment were agreed whether it would constrain the project. The Executive Director Economy Environment & Culture said that it would mean that all options for housing development would be included, but added that it was always going to be part of the project.

87.9 The Chair noted that Mr Daykin, a representative from Aberdeen Standard Investment was in the public gallery and asked if he wanted to comment on the proposed amendment. Mr Daykin said he had not seen a written copy of the amendment, but from what he had heard it would not materially affect the commercial nature of the agreement or the legal obligations, and so was comfortable with the proposed amendment.

87.10 Councillor Sykes thanked the Executive Director Economy Environment & Culture for his assurances re sustainability. However, he said that in the papers there was a presumption that ‘design and build’ would focus on cost and value over time and quality. The Head of Commercial Law said that in a ‘design and build’ contract it was still possible to achieve time and quality, but it would need to be a carefully worded contract.

87.11 The Committee then voted on the amendment, and it was agreed.

87.12 Councillor Mac Cafferty asked how the income from the sale of the Brighton Centre and the income from business rates had been assessed. The Executive Director Economy Environment & Culture said that a valuation brief had been developed with our specialist advisers GVA and both parties. The Head of Finance said that business rates was based on the business space, and the assumption was that 50% of those rates would be used to fund borrowing of up to £77m over twenty years.

87.13 Councillor Peltzer Dunn referred to Risk 22, and asked when the impact of any known transport strategy would take effect on the potential viability of the scheme. The Executive Director Economy Environment & Culture said that the transport strategy was a risk, and the key was to look at the whole city and not just the two sites, and that would done at the start of the process.

87.14 The Chair said that a new arena and extended shopping centre would reinvigorate the city, and so it was important that to ensure that it could be delivered.

87.15 RESOLVED: That the Committee -