Decision details

The Millyard Centre, Harper Square, Oak Street, Shaw (L01623)

Decision Maker: Deputy Chief Executive -

Decision status: Recommendations Approved

Is Key decision?: No

Is subject to call in?: No

Purpose:

The purpose of this report is to confirm that the subject property is surplus to the Council’s operational requirements and Officers are authorised to dispose of the property via private treaty at the earliest opportunity.

Decision:

RESOLVED - That:
The preferred option / recommendation is to approve OPTION 1.
As part of the terms of sale, it is proposed that the Council seeks to recover its professional fees from the purchaser of £750 including disbursements. In parallel, a restriction on residential development for 10 years will be included on the title.

Reasons for the decision:

Option 1 - sell the Council’s freehold and long leasehold interests to RGL for £122,000. Subject to a restriction on Residential development.
The Council does not own any adjoining land which would benefit from the imposition of a restrictive covenant in the sale contract and consequently it may be difficult to enforce.
Advantages:
•The Council achieves a £122,000 capital sum and a ‘clean break’ without need to manage the asset going forward
•The building is refurbished, well used and will continue to provide a worthwhile service to Shaw residents.
•On-going maintenance and asset management liabilities are stopped.
Disadvantages:
•The Council as former owner, will be unable to control future use of the asset.
Option 2 -
Sell a long leasehold interest (ie 250 year lease) to RGL for a premium of £122,000.
Subject to a restriction on Residential development.
Advantages:
•The Council receives a capital receipt of £122,000.
•The building is refurbished, well used and will continue to provide a worthwhile service to Shaw and Oldham residents.
•The Council maintains some control over the site in the longer term.
Disadvantages:
•On-going estate management costs for the Council.
•The continuing requirement for regular asset valuations of the site.
Option 3 - Retain the building and seek to formalise the lease with RGL.
It is envisaged the Council would need to spend at least £80 - £120k on refurbishment as indicated by a RGL condition survey.
Advantages:
•Ensures the Council receives a market rent for the asset.
•A higher rent may be achieved, but this is considered unlikely.
Disadvantages:
•The building may remain empty for some time exposing the Council to holding costs
•A valuable service could be lost within Shaw.
•The Council would need to spend significant time and resource preparing the site for to let in the open market, which is unlikely to be cost effective.

Alternative options considered:

Option 2 -
Sell a long leasehold interest (ie 250 year lease) to RGL for a premium of £122,000.
Subject to a restriction on Residential development.
Advantages:
•The Council receives a capital receipt of £122,000.
•The building is refurbished, well used and will continue to provide a worthwhile service to Shaw and Oldham residents.
•The Council maintains some control over the site in the longer term.
Disadvantages:
•On-going estate management costs for the Council.
•The continuing requirement for regular asset valuations of the site.
Option 3 - Retain the building and seek to formalise the lease with RGL.
It is envisaged the Council would need to spend at least £80 - £120k on refurbishment as indicated by a RGL condition survey.
Advantages:
•Ensures the Council receives a market rent for the asset.
•A higher rent may be achieved, but this is considered unlikely.
Disadvantages:
•The building may remain empty for some time exposing the Council to holding costs
•A valuable service could be lost within Shaw.
•The Council would need to spend significant time and resource preparing the site for to let in the open market, which is unlikely to be cost effective.

Other reasons / organisations consulted

Consultation has been undertaken with the following: Legal, Finance, Ward Councillors and Property.

Contact: Nikolaj Dockree, Senior Consultant Estates Surveyor 0161 770 1555 Email: nikolaj.dockree@unitypartnership.com.

Publication date: 23/10/2019

Date of decision: 11/09/2019

Accompanying Documents: