Resources Select Committee Minutes 14-02-05

58. MINUTES

The minutes of the meeting held on 3 February 2005 were agreed.

59. DECLARATIONS OF INTEREST

There were no declarations at this stage.

60. CALL-IN OF THE EXECUTIVE RECORD OF DECISION 09/05 – PROPOSED DOCTORS’ SURGERY AND PHARMECY ADJACENT THE HEIGHTS, LAKE HILL, SANDOWN

The Chairman invited the four members responsible for the call-in to outline their reasons for taking such action.

A letter from Hose Rhodes Dickson Commercial Estate Agents providing a response to the questions that had been raised by the Call-In was circulated. There was an adjournment of 10 minutes whilst members of the Select Committee read the response. Upon reconvening it was decided to go through the questions one at a time.

There was some concern that the £173,000 for a 125 year lease and £100 per annum rental for the life of the lease was not demonstrably good value for the public purse. The Executive were asked to defer the decision until the value of the land had been verified by an independent chartered surveyor, but declined.

The Portfolio Holder indicated that the Council’s consultants had been engaged to obtain the best deal and a valuation sought. Their independent evidence had been received and the portfolio holder believed the Council were getting the best price for the land. There was no evidence to suggest that the land was worth any more.

Members asked who was to administer the 28 parking spaces that were to be made available and were advised that the proposed doctor’s practice preferred to manage those spaces themselves. There was some discussion as to who would benefit from any revenue that may be generated from car parking as members believed up to £1,260 per annum could be generated if the same charges as those applied to St Mary’s Hospital were introduced. It was understood that the practice would want to keep free parking for patients and doctors. The Select Committee suggested that if car parking charges were introduced then a clause should be included in the lease stating that any income made should be split equally with the council.

During the debate in order to clarify certain financial details relating to the proposed development it was necessary to exclude the public and press. The Select Committee therefore agreed :

That under Section 100 (A)(4) of the Local Government Act 1972 the public and press be excluded from the meeting on the grounds that there was likely to be disclosure of exempt information as defined in paragraphs 7 and 9 of Part 1 of Schedule 12A of the Act.

The Property Services Manager advised members that the Primary Care Trust and the GP practice could select a developer to bring forward a mini Private Finance Initiative. Negotiations between the developer and the Inland Revenue would be held to arrive at a suitable rent which would then be reviewed every three years.

An outline of the developers’ expenditure and anticipated profit was provided and the Select Committee debated what would happen if the lease were to be sold on, they believed that a percentage of any uplift should be shared with the Council on a 50/50 basis.

The local member asked if the Council would be investing any income derived from the sale back into the community and was advised that all receipts went back into a central pot and were bid for.

The definition of a special purchaser was outlined and members believed that future reports to the Select Committee should include the open market value of assets when special purchaser arrangements are used.

The Select Committee were told that the site was designated as a tourism site within the Unitary Development Plan it could not be used for residential purposes.

The select committee moved back into open session.

Members questioned as to what steps were taken to identify other suitable sites and were advised that the consultants acting on behalf of Sandown Medical Centre had examined ten potential sites. The Select Committee indicated that it would be helpful if that could have been shown in the original report.

At the conclusion of the meeting, the Select Committee supported the decision taken by the Executive, subject to the following :

ACTION TO BE TAKEN BY THE HEAD OF PROPERTY SERVICES :

(a) To negotiate further to include a clause in the lease to ensure that any income to the tenant derived from car parking is split equally with the council as the freeholder.

(b) To negotiate further to include in the lease providing, that in the case of the developer assigning the leasehold to another party for the remaining length of the lease the Council will be entitled to an uplift clause on a 50/50 basis.

CHAIRMAN