PAPER F1

Purpose : For Decision

EXECUTIVE - 31 MAY 2001

BLACKHOUSE QUAY, NEWPORT HARBOUR

REPORT OF THE DIRECTOR OF CORPORATE SERVICES

To commence discussions for the grant of an option for an existing Leaseholder to acquire Council property for redevelopment.

BACKGROUND

1. The Executive will be aware that one of the Council's main redevelopment objectives is to regenerate the areas in and around Newport Quays. Whilst several developments have already been progressed, a scheme is emerging for Blackhouse Quay which your Officers consider should be brought forward for consideration at this time.

2. Blackhouse Quay is on the west bank of Newport Harbour at the northern entrance to the Harbour. Most of this area is either owned or leased to Mr Gidlow trading as Site Services. The business runs an import and distribution operation for stone and aggregates which arrive by ship and are batched and transported to customers around the Island. There are some 30 employees and in recent years the turnover has increased significantly and the business is now at a crossroads with the opportunity of new contracts and a new direction.

3. The proposal is to relocate the business to an alternative site (not owned by the Council) downstream with modern facilities, including new processing arrangements and wharfage. The precise details have yet to be drawn up and are the subject of a future planning proposal with the appropriate application.

4. To enable this change the business involved needs to realise the value of its existing property interests in order to finance the work. For this reason the proposal is being brought forward in advance of an overall planning brief for the west side of the harbour having been agreed by the Council.

PLANNING

The existing policy for the west bank is that it should be used primarily for appropriate waterfront related employment for boatyards etc, with the identification of appropriate industry and leisure areas. The site is currently an employment site and any redevelopment should retain a significant employment element. The potential relocation would provide an important opportunity to enhance the long term environment of the harbour. A mixed use of employment with other leisure, tourist and residential elements would also probably be appropriate in this location and complement the current development of the Travel Inn and Pub on the east bank to form a new entrance approach to the harbour from the north. As this site forms the terminating development of the harbour, it is considered that a redevelopment can be considered in advance of, and without prejudicing, a brief for the remainder of the west bank.

PROPOSAL

The attached Ordnance Survey extract indicates the property interest involved with the Council's freehold ownership shown outlined in black. Site Services has applied to purchase the Council's interest by way of an option, subject to terms being agreed and a satisfactory planning consent being granted for redevelopment. Effectively by merging the leasehold and freehold revision interests, by agreement, an opportunity arises to bring forward development.

BEST CONSIDERATION

There are potentially three different ways this transaction could be pursued, namely:

(a) For the Leaseholder to acquire the Council's freehold revision, then sell on the development.

(b) The Council could purchase the leasehold interest then offer the development for sale.

(c) Both parties could agree apportionments from the net proceeds and arrange a joint disposal.

Option (c) appears the most satisfactory way forward to protect the Council's interests.

OUTCOME OF CONSULTATIONS

To be advised in the future.

FINANCIAL IMPLICATIONS

A potential capital receipt.

LEGAL IMPLICATIONS

Transfer documentation.

OPTIONS

1. To progress a joint proposal and report back to the Executive.

2. Continue discussions with Site Services.

RECOMMENDATIONS

Option 1.

BACKGROUND PAPERS

None.

Contact Point : Tony Flower  823263 (1DCS)

M J A FISHER
Director of Corporate Services

Site Services Interests on Plan are Areas 3, 4 and 5