SUMMARY/PURPOSE
1.
This report sets out how
a previous decision of the Executive to co-locate Community Development and
Leisure Services with Tourism can be achieved within existing resources at
Westridge. In order to facilitate this change, however, the Executive is asked
to:-
·
Approve the development
of a health and fitness facility at Westridge
·
Declare 17 Quay Street,
Newport surplus to requirements,
·
Approve the letting of
the part of the Westridge Centre for a health clinic.
RULE 15 ACCESS TO
INFORMATION PROCEDURE RULES
2.
This decision appeared
in the Forward Plan, for determination on 12 January 2005. It was delayed from that
date to allow further sensitivity analysis to be undertaken. The report is
therefore taken under Rule 15.
BACKGROUND
3.
At its meeting on 28
January 2004 the Executive resolved not to proceed with the proposed
externalisation of Wight Leisure and, via the Wight Leisure Project Board (now
Culture and Leisure Services Project Group), to develop and deliver a long term
service development proposal for Leisure Services.
4.
At its meeting of the 28
July the Executive accepted the recommendations of the Project Board and agreed
to the co-location of the Community Development and Leisure Services Unit with
Tourism Services within existing resources.
In so doing it accepted the Board’s view that the co-location would:-
·
Increase the potential
for joint working and development between departments irrespective of line
management responsibilities.
·
Free up the Guildhall
for further development of the first floor as gallery and exhibition spaces,
(subject to Heritage Lottery Funding).
·
Allow the development of
an inclusive health and fitness facility in a Disability Discrimination Act
compliant building.
5.
Westridge, being the
home of the tourism service and some leisure activity but also an
under-utilised property asset offered the most obvious starting point in the search
for a facility in which to co-locate the services. Its potential to do so has been analysed and accepted as being
capable of co-locating the services, increasing the linkages between them, and
improving the utilisation of the asset.
A detailed background paper of the development and use of the Westridge
Centre was presented to the Personnel and Resources Committee in October 1999.
6.
The Executive charged
the Project Board with evaluating the business plan which supported the
creation of the health and fitness facility as part of the Westridge
redevelopment. It requested that the
plan be approved by the Executive before the scheme could commence. It is for
this reason that the development of the health and fitness facility is included
within this report.
7.
A summary of the
business plan associated with the health and fitness development is attached in
Appendix 1. A sensitivity analysis of
this plan has also been prepared (Appendix 2) which tests the financial risks to
the Council of the facility not performing to expectation. The whole plan was reviewed and approved by
the Project Board on 25 October 2004.
8.
The development of a new
health and fitness facility at Westridge allows a matrix of such facilities
supporting the Island’s main communities to be complete (Newport, Sandown Bay
and Ryde). It also puts the Council in
the best possible position to respond to the Government’s new “Choosing Health”
agenda which clearly sees a role for local authorities in promoting physically
active lifestyles.
9.
The scope of the
proposed health and fitness facilities is shown in Appendix 3. In summary it includes the provision of a
new entrance and reception area; a new 44 station state of the art gym, a
health suite and the refurbishment of the existing squash courts and changing
rooms.
10.
Co-location of the
service units at Westridge would be achieved by bringing into use as office
accommodation the conference room which is currently grossly under utilised. Apart
from ad hoc meetings of Council staff the room has not been hired out to
external parties for some years. Planning permission will be required for the
change of use and an application has been submitted. This will be the subject
of a separate decision by Development Control Committee.
11.
It is proposed that
Tourism Services utilise the conference room which will be converted into a
general office with partitioned meeting room to one end and the Call Centre
partitioned at the other.
12.
The two first floor and
main ground floor offices that are vacated by Tourism will be occupied by
Community Development and Leisure Services and there will be a facilities area
common to all services.
13.
Adjacent to the new
leisure suite is a redundant changing room and terms have been discussed with
the Shen Clinic for a new lease to bring a new clinic/therapy suite to this
area. This proposal involves the
investment of some £80,000 from private finance and the lease will be for a term
of 20 years. The details of this opportunity
have been marketed by Gully Howard and Hose Rhodes Dickson (copy report
attached at Appendix 5 and no other improved proposal has come forward. As such this new arrangement is recommended
as the best consideration for the Council.
14.
The proposals detailed
in this report require alteration and refurbishment works which will cost an
estimated £390,000. This total estimate
currently includes contingencies, all building works, new ICT infrastructure
and the fitting out costs.
15.
In order to fund the
works it is proposed that 17 Quay Street, Newport, currently occupied by Wight
Leisure, be declared surplus to requirements and disposed of by means of a
freehold sale. An independent valuation
has been undertaken of the building and on the assumption that planning consent
is obtained for change of use to residential purposes, it is anticipated that
this could produce a capital receipt in the order of £250,000. A planning application has been submitted.
16.
17 Quay Street was
probably constructed in the mid 1700s and is located within the town centre
conservation area. As such any repairs
are likely to be relatively expensive and there is likely to be an on-going
maintenance backlog. There is also a
Disability Discrimination Act implication in making the property compliant for
access by the public. Any disposal
would obviously extinguish both such liabilities.
17.
The move of Wight
Leisure would also entail the termination of the existing licence agreement at
42 Quay Street and cessation of rental and occupational liabilities in that
respect in the sum of £9,000 per annum.
18.
Community Development
would vacate its accommodation, predominantly within The Guildhall, making this
available to Museums Services, this would be complementary, enabling work to
facilitate the outstanding Lottery bid.
The revenue saving of this move will be limited to outgoings such as
heating, lighting, etc and has been estimated at £3,000 per annum.
STRATEGIC CONTEXT
19.
The proposed co-location
at Westridge satisfies a number of operational priorities of the Council’s
Community Strategy, namely:
·
Improving access to
services and facilities.
·
Supporting jobs and the
local economy.
20.
The proposals also
satisfy a number of priorities under the Council’s Corporate Plan, namely:
·
Improving health, housing
and the quality of life for all.
·
Encouraging job creation
and economic prosperity.
21.
The provision of the
health and fitness facilities places the Council in an excellent position to
respond to the Government’s latest (November 2004) paper on public health,
“Choosing Health – Making healthy choices easier”. Increasing exercise being one of the 6 Government priorities in
the paper that are to be achieved through wide ranging community partnerships
involving local government and underpinned by regulation and resources.
22.
The proposal is not
believed to have any adverse crime and disorder potential and will also enable
human rights, particularly in relation to inclusive fitness (following
guidelines issued by the English Federation for Disabled Sports).
CONSULTATION
23.
Consultation has been
carried out with the Project Board, Tourism Services, Wight Leisure (the demand
for additional health and fitness facilities arising from their Customer Impact
Study 2003), Community Development, Financial Services and Legal Services. All are happy with the proposals and have no
further comments.
FINANCIAL
AND BUDGETARY IMPLICATIONS
24.
The estimated capital
cost of the whole redevelopment is £390,000.
Notionally £170,000 of this is assigned to the office development. However, the overall price is predicated on
both parts of the development being completed together. If they are done individually then the costs
of each element would increase, taking the total overall cost beyond the
current estimate.
25.
The sale of 17 Quay
Street will result in an estimated capital receipt of £250,000 with no future
maintenance/DDA liabilities, currently estimated at £13,600.
26.
The termination of the
licence agreement at 42 Quay Street will result in a revenue saving of £9,000
per annum.
27.
The relocation of
Community Development from The Guildhall will result in an estimated revenue
saving of around £3,000 per annum.
28.
The letting of the
health clinic to the Shen Clinic will result in a rental income of £4,800 per
annum exclusive for the first 5 years of the lease increasing to £7,200 per
annum exclusive for the 5 years thereafter.
29.
The estimated revenue
expenditure increase at Westridge due to the increased number of staff is
anticipated at around £15,000 per annum.
30.
The health and fitness business
plan (Appendix 1) demonstrates a cost benefit (saving) to the Council’s revenue
budget of £165,000 in the first 5 years of the facility’s operation (before
capital charges are taken into account).
It would therefore be capable of repaying the capital employed on its
development in a maximum 7 years.
31.
A grant of £30,000
(£10,000 capital; £20,000 revenue) is available from Sport England in support
of its Inclusive Fitness Initiative subject to the fitness facility being open
in June 2005.
32.
The capital and revenue
business plans are shown in Appendix 4, with the latter showing an overall
revenue saving of £34,800.
LEGAL
IMPLICATION
33.
Under Section 123 of the
Local Government Act 1972 the Council has the power to dispose of land subject
to the best available consideration being secured. It is proposed that planning consent be sought for change of use
to residential purposes at 17 Quay Street in order to achieve best
consideration.
34.
The letting to the Shen
Clinic will be for a term of 20 years at an agreed rent for the first 10 years
of the term and thereafter at open market rental determined at the end of year
10 and year 15. The tenant will be
responsible for contributing towards the landlord’s costs relating to
maintenance of the shared facilities and the building insurance premium. The lease will be excluded from the security
of tenure provisions of the Landlord and Tenant Act.
35.
The Westridge Centre is
located in an area designated for tourism and leisure development in the
Unitary Development Plan (UDP). Any
planning application which provides for the provision of new office
accommodation is therefore a departure from the UDP and would require approval,
not only of the Development Control Committee but also of the Government Office
of the South East (GOSE).
OPTIONS
(a) Subject to planning consents being
granted :
i.
To proceed with the
co-location of Community Development and Leisure Services with Tourism Services
at Westridge.
ii.
To approve the
development of a new health and fitness facility at Westridge.
iii. To
grant a lease for a health clinic.
(b)
To undertake the
co-location and health and fitness works simultaneously as a single development
scheme.
(c) To dispose of 17 Quay Street, Newport.
(d) Do nothing.
EVALUATION/RISK
MANAGEMENT
36.
The Westridge Centre is
within the ownership of the Council and is currently under-utilised, both from
a leisure point of view and also in respect of the conference room facility.
37.
The co-location of the
various services will make better use of the building and the
refurbishment/redevelopment of the leisure facility to meet Disability
Discrimination Act criteria will benefit both the local community and create an
increased revenue which will benefit the Council. There will also be the added benefit of rental income from the
health clinic tenant.
38.
These alterations and
changes at the Westridge Centre are subject to the Council being granted
planning permission and an application has been submitted. The likelihood of planning approval being
forthcoming is improved if it can be demonstrated that the quantity and quality
of leisure opportunities being offered at the location is being increased. The provision of the new health and fitness
facility will do this. The development
of new office accommodation and the health and fitness facilities are therefore
inextricably linked.
39.
The funding of the
project is reliant upon the freehold disposal of 17 Quay Street at a figure of
around £250,000. This can only be
achieved if the property is sold with the benefit of residential consent and
informal enquires of the Planning Officer have indicated that such consent
should be forthcoming.
40.
The accommodation at
Westridge is generally open plan and better able to accommodate the staff from
Wight Leisure and Community Development than their current accommodation which
is within older buildings and tends to be individual offices without the
flexibility afforded by open plan.
41.
17 Quay Street not only
has limited internal flexibility but due to the age of the building will have an
on-going maintenance and Disability Discrimination Act liability. If the building is retained such liabilities
will remain with the Council.
42.
There are no alternative
buildings available within the Ryde area providing such office and leisure
facilities. If better accommodation
were available this would still result in the Westridge Centre being further
under utilised and potentially remaining a drain on Council revenue sources.
43.
The operational business
plan for the health and fitness facilities has been subjected to scrutiny and
approved by the Council’s Financial Services Manager. A risk appraisal of it has also been compiled by the Council’s
Risk Management staff. This is attached
at Appendix 6. The potential for the
newer facilities at Westridge to draw people away from the existing facilities
has been factored into the business plan for it. The benefits of new local people making use of the facility are
thought to far outweigh this disbenefit.
44.
The sensitivity analysis
of the business plan demonstrates that the income levels for the facility need
to be approximately 15% lower or the expenditure levels 16% higher before it
begins to be a cost to the Council’s revenue budget, all other things being equal.
45.
A capital allocation of
£90,000 was made to the development of the health and fitness facilities in
2001. This was on the understanding
that it would attract significant external funding to revitalise the whole of the
Westridge Centre. This is not now
thought possible but the benefit of the scheme now proposed is that a
substantial part of the centre would still be available for commercial
use. This opportunity can only be
realised when plans for the other parts of the building are finalised.
46.
Whilst the current
circumstances are supportive of the opportunity of developing Westridge, this
would clearly be at the cost of some other potential projects within cultural
and leisure services. The projects that
most readily come to mind are improvements to the two existing fitness
facilities at the Heights and Medina. Estimated costs for these schemes are
£120,000 and £55,000 respectively.
Detailed revenue planning in support of these schemes is still in its
early stages but as a minimum, both would need to generate additional revenue
to cover the costs of leasing new equipment.
47.
On this basis it is
thought that neither the re-development of the Heights or Medina would generate
the same level of revenue return to the Council as the Westridge scheme. The returns from the Westridge health and
fitness scheme would be sufficient to enable both other schemes to be completed
in the medium term, if the Council so desired.
It therefore offers the best use of the capital potentially available at
this moment in time. Without the
co-location scheme, then only the capital allocation of £90,000 would be
available to complete the Heights and Medina schemes.
|
RECOMMENDATIONS : (a)
Subject to planning consents being granted : i. To proceed with the co-location of Community
Development and Leisure Services with Tourism Services at Westridge. ii. To approve the development of a new health and
fitness facility at Westridge. iii. To grant
a lease for a health clinic. (b)To undertake the co-location and health
and fitness works simultaneously as a
single development scheme. (c)
To dispose of 17 Quay Street, Newport |
BACKGROUND
PAPERS
‘Reintegration
of Wight Leisure With the Council’ – Report of the Deputy Leader and the Portfolio
Holder for Tourism and Leisure to the Executive on 28th July 2004.
Personnel
and Resources Committee – 21 October 1999
Westridge
Fitness Facility Business Plan - Confidential
Contact Point: Barry Cooke ( 823266 [email protected]
John
Metcalfe ( 823825 [email protected]
|
JOHN
METCALFE Head
of Community Development |
REG BARRY Portfolio Holder
for Resources
JOHN FLEMING Portfolio Holder for Tourism
and Leisure |
Appendix 1
Summary 5 Year Projections for the Westridge Health & Fitness Proposals
Click here for Appendix 2
Appendix 3
WESTRIDGE
HEALTH & FITNESS
Scheme Outline
1.1 Scope
To create a new 44 station health and fitness facility within the existing squash court complex. To include:
· New entrance canopy
· Reception area
· Juice bar/licensed bar
· Customer relaxation area
· Complete refurbishment of the male and female changing rooms
· Provision of health suite
1.2 Key points
a) Health and fitness
Break out partition wall between courts 7 and 8 to create an open space (125m2) on the ground floor to accommodate a 44 station health and fitness facility.
b) Reception
A custom-built reception area (to be provided within court 6), which will service all users of the “new” facility. This will also include a small juice bar/refreshment area, licensed bar and customers’ relaxation area.
c) Changing rooms
Each changing room to be completely refurbished; to include new changing cubicles, toilets, showers, complete retiling and decoration, and the provision of replacement lockers.
d) Squash
As part of the development, the remaining courts (numbers 1, 2, 4 and 5) will be refurbished whilst court 3 (which previously housed a golf simulator) will be reinstated.
e) Health suite
The existing disused changing room (which is currently partially used for storage of cleaning chemicals), is to be converted into a health suite, to include:
· Sauna and steam room
· Needle showers
· Two ‘fast tan’ sun beds
· GP referral/consultation room
g) General
In order to give the facility the feel of
quality of a private club some additional general improvements will be
undertaken:
· Provision of new entrance canopy
· Decoration of main corridor
· Carpet to whole ground floor
h) Potential for further future development
Whilst the initial scheme will be confined to the ground floor there will is an opportunity to extend the facility onto the first floor at a later date. At this time, it will be necessary to install a lift to comply with the requirements of the Disability Discrimination Act (DDA). This ‘second phase’ would also involve:
· The construction of a mezzanine floor over part of the gym, therefore increasing the capacity
· Construction of a SHOKK junior gym on the ground floor within court 5
· Construction of crèche
There is also an opportunity to achieve a planning gain from the adjacent superstore redevelopment, indeed planning officers are currently negotiating this, in addition to the second phase of the development the following have been proposed:-
· Crèche/community rooms
· Children’s indoor play facility
· Replacement boxing club accommodation
· Leisure transport initiative
Appendix 4
BUSINESS PLAN
CAPITAL
ExpenditureWestridge refurbishment |
|
390,000 |
|
|
|
|
Savings
17 Quay Street sale |
250,000 |
|
|
|
|
|
Capital Contribution
Culture and Leisure Services1 |
90,000 |
|
|
|
|
340,000 |
Projected
shortfall
|
|
50,000 |
|
|
|
|
Shortfall Funding2
|
|
|
Community
Development/Leisure reserves
|
50,000 |
|
|
|
|
50,000 |
|
|
|
0 |
Notional Savings17 Quay Street maintenance backlog 17 Quay Street DDA estimate Westridge DDA estimate3 |
8,600 5,000 37,000 |
|
|
|
|
50,600 |
Notes 1Culture and Leisure Services have a £90,000 Council capital allocation carry over towards a new health and fitness facility at Westridge. 2Community Development and Leisure reserve contribution. 3These works are being undertaken as part of the refurbishment and are therefore shown as a notional saving to avoid double counting. This excludes any fees that may be payable. |
Appendix 4 continued
BUSINESS PLAN
REVENUE
ExpenditureWestridge estimated increase1 |
|
15,000 |
|
|
|
|
Savings
42 Quay Street Guildhall estimated decrease2 Rent from Shen Clinic3 Increased leisure revenue4 |
9,000 3,000 4,800 33,000 |
49,800 |
|
Total revenue savings |
|
34,800 |
Notes 1Currently £80,000 per annum. Rates and maintenance are likely to remain unaltered. Heating, lighting, etc are likely to increase. Estimated new outgoings (rates and maintenance tend to be the largest part), say £95,000, ie an increase of £15,000 per annum. 2Currently £17,340 per annum. 14 people from a total of 32 are to relocate. Estimated saving £3,000 per annum. 3Shen Clinic rental years 1-5 £4,800 per annum increasing to £7,200 per annum for years 6-10. 4During the first 5 years the revenue will grow from a break even in year one to an estimated £45,000 annual surplus in year five, giving an average over this period of £33,000 per annum. |
