Decision Maker: Executive
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
Surrender and re-grant of lease
(1) That the surrender of the existing lease to Stevens & Bolton and a simultaneous re-grant of a new 15-year lease with no break clause at the current passing rent of £1.3 million per annum be approved, subject to an upwards only rent review in 2025 and 5 yearly thereafter with 50% reduced rent over the first two years.
(2) That the Head of Asset Management (Climate Change Lead) be authorised to take such actions as are required to negotiate any minor amendments and finalise terms referred to in the report submitted to the Executive for the surrender and re-grant of a lease to Stevens & Bolton subject to being satisfied that the Council will receive the best consideration reasonably obtainable and in consultation with the Lead Councillor for Resources, the Joint Strategic Director (Place) and the Chief Finance Officer.
(3) That the spending of the approved Property Acquisitions budget to fund a landlord’s capital contribution towards tenant improvement works be approved.
To secure the rental income of £1.3 million per annum for a further 10 years beyond the expiry of the existing lease in place, which will be subject to upwards only rent reviews in 2025 and 5 yearly thereafter. Thus, it will remove the risk of the building falling vacant in 2027 when the current lease expires, and the likely significant level of investment required to refurbish the building (estimated at £5 million) to attract a new tenant. It is therefore considered the most financially advantageous option to the Council and will improve the investment performance of the asset for the next 15 years.
Other options considered and rejected by the Executive:
Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:
Report author: Damien Cannell
Publication date: 26/08/2022
Date of decision: 25/08/2022
Decided at meeting: 25/08/2022 - Executive