Committee: RESOURCES SELECT COMMITTEE
Date: 20
NOVEMBER 2002
Title: UPDATE
FROM THE PROPERTY ASSET MANAGEMENT TASK GROUP
REPORT OF THE CHAIRMAN OF THE PROPERTY ASSET MANAGEMENT TASK GROUP
_________________________________________________________________________
The Property
Task Group has been established by the Resources Select Committee to review the
Council's long-term office and storage requirements and bring forward
recommendations. Some 25 issues had been identified for potential change (see
appendix attached). The Task Group is
now bringing forward a major proposal to address several of these issues
through a scheme of acquisition and disposal of various property assets. This scheme is being recommended to the Resources
Select Committee for further recommendation to the Council's Executive.
The review
includes recommendations for :
1. Replacement of Library
Headquarters
2. Development of the
Guildhall
3. Development of Corporate Storage for Education, Finance, Planning and Electoral Services
4. Possible Replacement of
the Wight Bus Fleet
BACKGROUND
In 2001 the
Council set up the Property Task Group to recommend proposals for the best use
of Council owned assets and to lead on Phase III of the Council's Accommodation
Review. The main aim of the Review is
to improve the utilisation of assets within existing budgets by co-location of
users to create economies to fund better service facilities and service
provision. Because of the numerous
issues to be addresses and their complexity, the Task Group is working to put
proposals in several tranches which means that the review will be on-going over
several years according to agreed priorities.
Members will recall that the first of these proposals involving the
Council's ICT server farm and Coastal Management Offices is now underway and
shown in bold on the appendix attached.
The Task Group meets regularly with Officers from all Directorates and
has taken the opportunity to inspect all the properties involved to see at
first hand service conditions, talk to staff and prioritise actions.
The Task
Group is now putting forward this scheme for recommendation.
It is the
Task Group's view that both the Library Headquarters at Parkhurst and Forest
Road Stores have reached the end of their useful lives and the opportunity
exists to provide a replacement by way of a new building of sufficient capacity
to consolidate numerous elements of Council storage.
The Task
Group is proposing that the Council purchases the freehold of a brand new
office/warehouse building at Somerton known at 4 and 5 Mariners Way, Somerton,
at a price of £470,000 (Four Hundred and Seventy Thousand Pounds). This building has a floor area of some 1300
square metres on ground and mezzanine levels, is of traditional construction
with all services connected, there is good access and parking for some 26
vehicles. The building has an average
height at eaves of 6m providing 7,800 cubic metres of useable volume compared
to a total of approximately 4,000 cubic metres at Forest Road and Library
HQ. This is a "shell"
building and will require adaption and fitting out to accommodate the uses
proposed. A design and specification is
being worked up with an estimate for this work capped at £150,000.
By acquiring
and adapting this building it will be possible to accommodate the following
uses:
·
Library Headquarters offices, book collation, book
storage and library vehicles.
·
Storage of artefacts and documents at The Guildhall
freeing up space for Phase II of the Museum of Art.
·
Education Stores from Forest Road, Newport.
·
Stored items and files for Finance (Forest Road),
Planning (Dodnor) and Electoral Registration (Daish Way).
·
Stored artefacts at 8a Clarence Road, East Cowes.
It is proposed that library and education staff shall manage this new facility and there will need to be some staff training in terms of storage management and document handling. Liaison and delivery of stored documents will be via the existing courier service, which needs to be varied accordingly. Having developed a new Library and Storage Headquarters the Council will then have available the following savings and surplus assets that can either be sold, surrendered or reused:
·
Land at Parkhurst for 39/40 dwellings.
·
Maisonette at East Cowes consisting of two bedrooms.
·
Land at Forest Road, Newport (see below).
·
Possible sale of Carisbrooke Depot (see below).
·
Surrender lease of Unit 12 at Dodnor.
·
Surrender occupation of Unit 4 at Daish Way.
·
The Guildhall storage area will be available for the
museum.
·
Repairs backlog at existing establishments is
resolved.
Given that
through the above proposal the site at Forest Road, Newport, will become
vacant, the Council is being recommended to consider reusing that site to
accommodate the Wight Bus Fleet, which is currently parked and managed from
Carisbrooke Depot. Whilst the depot at
Carisbrooke works reasonably well and is centrally located, accessibility is
less than perfect and there is a possibility of generating a capital
receipt. For reuse at Forest Road, the
Transport Manager is continuing to work up details on this idea but they remain
unclear at the time of writing this report.
In order for
the proposals to proceed it will be necessary for the Council to acquire 4
& 5 Mariners Way before the surplus property is sold. The Council’s Officers have negotiated a
provisional price for the new property after an extensive search for
replacement premises and believe it is the best value solution for the Council
at the present time. The developer has
indicated that should the Council proceed with the purchase of these buildings
he will speculatively build another 10,000-15,000 square feet of factory units
at Somerton. The full cost of the move
is shown on the attached Business Plan.
The forward purchase of the building will minimise disruption to the
Services concerned and prevent any unnecessary moves.
The Library
HQ site together with the Council owned surrounding land and buildings is
subject to a Planning Application for 39 dwellings. The tenants of the
buildings enjoy security of tenure and will be entitled to compensation based
on Rateable Value although can be offered suitable alternative accommodation by
the Council as an option. 8a Clarence
Road is a two bedroom flat with access from Ferry Road and can be offered for
sale on the open market. The Council
has interest from adjoining landowners for both the Forest Road and Carisbrooke
Depot sites, previously reported to the Executive, and any sale will depend
upon the preferred solution for the Transport fleet and accord with Council’s
policy where a marriage value occurs.
Both the
existing Library HQ and Forest Road stores are in poor condition with a total
maintenance backlog estimated at £250,000. The Council will save this amount if
the proposals go ahead. The estimated
net benefit of the proposal is a capital saving of £62,000, ignoring the
maintenance backlog.
In terms of
revenue, the proposed moves will allow the Council to surrender the lease of
Unit 12 Dodnor Industrial Estate saving some £15,000 pa. Further savings will be made through the
amalgamation of various current facilities into one unit and the improved use
of the Guildhall. Total annual savings are estimated at £17,000 plus the
opportunity cost of storage at the Guildhall estimated at £5,000 pa. Full details of which are shown on the Plan
attached.
The Council
is being asked to agree recommendations to proceed with the advanced purchase
of 4 & 5 Mariners Way at a price of £470,000 (four hundred and seventy thousand
pounds) together with a budget of £150,000 (one hundred and fifty thousand
pounds) to fit out the property. The Council is also being asked to support the
disposal of the Library HQ site at Parkhurst, 8a Clarence Road, East Cowes and
either the Forest Road site or Carisbrooke Depot depending upon a suitable
scheme being finalised with the Transport Manager.
Service managers have been extensively consulted and support the proposals above. Task Group members have inspected with officers all the properties concerned.
LEGAL IMPLICATIONS
The Council is the Freeholder of the Library HQ, Forest Road site, the Guild Hall and the Council occupied areas at Carisbrooke Depot. 8A Clarence Road is also freehold and will be sold with the benefit of a long Lease to East Cowes Heritage Organisation Limited, who occupy the ground floor of the building, for 125 years from 1996 at a ground rent of £25 per annum. Unit 12 Dodnor is still occupied by the Council, however the Lease has recently expired and whilst officers are currently in negotiations with the Landlord, possession can be given up on 6 months notice at present.
The unencumbered freehold title of 4 & 5 Mariners Way would be acquired.
FINANCIAL IMPLICATIONS
The Executive has previously agreed the accommodation Phase 3 review and the principal of “ring fencing” capital receipts for subsequent moves, subject to a business plan for each tranch of moves. This scheme involves the forward acquisition of new property.
PLANNING
4 & 5 Mariners Way has planning consent for office, light industrial and warehouse use. 8A Clarence Road, East Cowes has previously been used as a flat and there are established uses for the land at Forest Road and Carisbrooke Depot. A planning application has been submitted on the Library HQ site and adjoining Council owned land. Any consent obtained is likely to include a condition requiring improvements to the existing private roads which provide access to the site.
RISK
The main financial risk to the Council of the proposed scheme is a down-turn in the property market and falling values between acquiring the units at Mariners Way and selling the Council owned surplus assets. For example a 10% fall in the property market in this period would reduce a surplus balance of £62,000 to a small deficit.
1.
Support the proposals to acquire 4
& 5 Mariners Way prior to disposal of the surplus property described.
2.
Amend the proposals above.
3.
Reject the proposals.
Option 1.
Depot at 21 Whitcombe Road,
Carisbrooke - Executive
Library HQ, Parkhurst – Executive
Previous
Accommodation Review Papers – Executive
Contact Point:
David Lovell, Asset Manager F 823266
MRS M LLOYD Chairperson
Property Task Group |
MIKE FISHER Strategic
Director of Corporate and Environment Services |
BUSINESS
PLAN
CAPITAL
Expenditure |
£ |
Capital cost for 4 and 5 Mariners Way |
470,000 |
Fit out based on £115 ps metre |
150,000 |
ICT connection |
15,000 |
Acquisition costs, including stamp duty |
15,000 |
Total |
650,000 |
Plus contingency, say, 5% |
33,000 |
|
£688,000 |
Savings |
|
Sale of existing Library Headquarters, Parkhurst |
550,000 |
Sale of 8a Clarence Road, East Cowes |
50,000 |
Sale of Forest Road site / Carisbrooke Depot** |
150,000 |
|
750,000 |
Balance |
£62,000 |
Maintenance Backlog |
|
Library Headquarters |
125,000 |
Forest Road |
125,000* |
|
£250,000 |
* An estimated figure. No Condition Survey has been undertaken on this building due to its poor condition.
** If the Depot is sold allowance will need to be made for the provision of a new facility.
REVENUE
Expenditure |
£ |
Estimated
annual running costs of 4 and 5 Mariners Way, including rates, Electricity, gas, water, insurance, maintenance and contingency |
35,000 |
Total |
£35,000 |
Savings |
|
Annual running costs of Education Stores |
25,000 |
Annual running costs of Library Headquarters |
11,000 |
Surrender of Unit 12 Dodnor Industrial Estate |
15,000 |
Annual running costs of 8a Clarence Road |
1,000 |
Total |
£52,000 |
Annual
Balance |
£17,000 |
|
|
Opportunity cost of storage at The Guildhall |
£5,000 |
No |
Property |
Issue |
Comments |
Action |
1 |
County Hall |
Maximise use. |
Are the right occupiers in the
right places within the building? |
Questionnaire being sent out to
Service Managers. |
2 |
Chairman’s Support |
Needs to be near the Chairman. |
Examine relocation. |
Outstanding challenge. |
3 |
County Hall |
New I C T staff for e-government
initiative. |
Need more space. |
Alternative accommodation being
considered |
4 |
Members’ Suite |
Needs closer link to Committee Select
Service. |
Relocate service. |
Moving to Floor 4, Rooms 416 and
414. |
5 |
Committee Room 1 |
Badly located for regular use. |
Consider relocation. |
Recommended to move to Ground
Floor, Room 122, currently used by Payroll. |
6 |
County Hall |
Best Value Team cramped. |
Appropriate location. |
Outstanding challenge. |
7 |
County Hall |
Personnel cramped. |
Appropriate location. |
Outstanding challenge. |
8 |
ICT Server Base |
Urgent 2nd base/larger space. |
Pending I C T instructions. |
|
9 |
Seaclose |
Development Control cramped. |
Flexibility within building. |
DIP system being worked up. |
10 |
Bugle House |
Training expansion/permanent Wightcare location. |
Flexible leasehold interest. |
Lease due to expire in 2006. Alternative locations being considered for
services, including Enterprise House, Northwood House and County Hall. |
11 |
Quay House |
Potentially surplus. |
Use as additional accommodation or
dispose of. |
Recommend sale. Guide price £140,000. |
12 |
Quay House/ Cothey Bottom |
Relocate team. |
Museum Workshop Team best placed
at Cothey Bottom. |
Business Plan being worked
up. Costs estimated to be in the
region of £30,000. |
13 |
Salisbury Gardens |
Surplus capacity. |
Second floor offices. |
Coastal Management Team relocating
from County Hall. |
14 |
Wight Leisure/ 17 Quay Street/ 42 Quay Street |
Relocate combined operation. |
Combined operation close to
services, e.g. Ryde. |
Relocate Wight Leisure to
Northwood House. Business Plan to be
worked up. Consider
disposal/retention of 17 Quay Street. |
15 |
Library Headquarters |
Poor building. |
Service needs to be relocated to
suitable accommodation. |
|
16 |
Traffic Education Centre |
Poor location. |
Service needs to be incorporated
in the Highways Team. |
Relocate to Newport Quay adjacent
to Jubilee Stores. |
17 |
Jubilee Stores |
New staff for Highways Section. |
Office at capacity. |
Move Car Parks staff to County
Hall and the Contracts Team to Jubilee Stores. Consideration being given to relocating the service close by. |
18 |
Property at Carisbrooke Depot |
Unsuitable location. |
Forest Road? |
|
19 |
Education Stores, Forest Road |
Poor quality building. |
To be relocated to a more suitable
unit. |
|
20 |
St Nicholas House |
Possible redevelopment
opportunity. |
An asset the Council could
capitalise. |
Valuable asset providing extensive
Council accommodation. Any proposal
will depend upon suitable alternative accommodation. |
21 |
Northwood House |
Surplus capacity. |
First floor offices. |
Currently being considered for
Wight Leisure. |
22 |
Records Office, Hillside |
Public Records at capacity. |
Poor service facility. Question
location. |
Alternative sites being
considered. |
23 |
Seaclose |
Potential extension. |
Phase II side extension space
available. |
Estimated cost of works
approximately £1m. |
24 |
The Guildhall |
Maximise use. |
First floor, second phase. Displays for exhibition space. |
|
25 |
Clatterford Centre/ Archaeology |
Clatterford could expand into
adjacent premises/develop. |
Archaeology satisfactorily located
but could relocate if better premises were identified. |
No suitable alternative
accommodation identified. |