PAPER D2

Purpose : For Decision

Committee :    EXECUTIVE

Date :              23 APRIL 2002

Title :              PROPOSED NEW HOVERTRAVEL TERMINAL - RYDE ESPLANADE

PORTFOLIO HOLDER - RESOURCES

SUMMARY/PURPOSE

A request has been submitted by Hovertravel Limited for the grant of a 60 year lease, to enable their existing premises to be rebuilt with improved services. There will be rent reviews every five years and all other terms and conditions of the existing lease would remain unchanged. A further review of the rent will be written into the agreement in the event that the Council decides to agree an overall approach to landing charges for all cross Solent operators.

Your officers consider Hovertravel Limited to be a good tenant and their proposal forms a worthwhile opportunity to improve visitor access to the Island whilst also improving the outdated building arrangement. For these reasons the request is being recommended.

BACKGROUND

Hovertravel occupy the site shown edged black on the attached plan number RYD0607-1, for the use of a hovercraft terminal, by way of successive leases from 1965, the current 10 year lease expiring in 2006. The rent passing is £11,750 pa plus a levy of 1p per passenger equating to approximately £7,000, giving a total of £18,750 for this year.

A rent review is due next year, however, in order to facilitate the grant of a new lease, Hovertravel have agreed an inflation linked 16% increase in the rent to £13,630 pa and a 24% increase in the levy to 1.24p per person. These figures are now in excess of those recently settled at the Portsmouth end of their operation.

Their site is currently made up of a large slipway area which allows the Hovercrafts to be driven on and off dry land. Adjacent is a small terminal which has a ticket office, waiting room and two administration offices. There is no toilet or restaurant facilities. To the front is an area for car parking giving approximately 8 spaces.

Hovertravel currently transport approximately 720,000 passengers across the Solent and they hope to expand on these figures by the introduction of a bigger and better hovercraft.

In order to facilitate their expansion plans, Hovertravel have submitted a planning application to demolish their existing single storey building and erect in its place a larger structure on two floors. Copies of these plans will be on display for Members’ to see at the meeting.

The cost of the project is envisaged to be in the region of £450,000. Consequently, to make the project viable they have requested a surrender of their existing lease with a renewal for a period of 60 years, otherwise on the same terms and conditions, as their existing lease.

OUTCOME OF CONSULTATIONS

Isle of Wight Partnership, who have commissioned WS Atkins to develop an overall improvement plan for the Esplanade, are supportive of this proposal, as are Ryde Forum.

The Partnership have also pointed out, that providing the building is of acceptable design standard, they would consider it beneficial to see the development and improvement take place as soon as possible as the existing building is of generally poor standard and lacks WC facilities.

LEGAL IMPLICATIONS

Title is being perfected by registration.

FINANCIAL IMPLICATIONS

The rent payable will be increased to £13,630 pa and the levy to 1.24p per person, giving a total income of approximately £22,310. The applicant will also pay the Council’s surveyors and legal fees.

OPTIONS

1.        Continue with the existing arrangement.

2.        Renew the existing lease for a period of 60 years, at the increased rental level with a clause to allow for a further review of rent consequent on an overall policy of landing charges for all cross Solent operators. Subsequent rent reviews to be every 5 years and otherwise on the same terms and conditions as per the existing lease.

RECOMMENDATIONS

Option 2.

BACKGROUND PAPERS

None.

Contact Point : Oliver Dunne, ☎ 823262