Agenda, decisions and minutes

Apologies for absence were received from Councillors Tim Anderson, John Redpath and Cait Taylor.

In accordance with the local Code of Conduct, a councillor is required to disclose at the meeting any disclosable pecuniary interest (DPI) that they may have in respect of any matter for consideration on this agenda.  Any councillor with a DPI must notparticipate in any discussion or vote regarding that matter and they must also withdraw from the meeting immediately before consideration of the matter.

If that DPI has not been registered, the councillor must notify the Monitoring Officer of the details of the DPI within 28 days of the date of the meeting.

Councillors are further invited to disclose any non-pecuniary interest which may be relevant to any matter on this agenda, in the interests of transparency, and to confirm that it will not affect their objectivity in relation to that matter.

There were no declarations of interest.

To confirm the minutes of the meeting of the Executive held on 23 June 2022.

The minutes of the meeting held 21 July 2022 were confirmed as a correct record. The Chairman signed the minutes.

The minutes of the meeting held 21 July 2022 were confirmed as a correct record. The Chairman signed the minutes.

The Leader thanked the Guildford and Waverley teams involved in the response to the major incident in Netley Watermill treatment works over the previous weekend, which clearly demonstrated the benefits of collaborative working.   

The Leader announced that the Household Support Fund was now open for applications, with the scheme running until 30 September 2022, or until all funds have been allocated.  Residents can submit one application per household and grants of up to £300 were available.  Those with highest need would be prioritised, such as households with children and those with pensioners.  More information on the scheme could be found on the website, where there was a link to the Household Support Fund.

The Leader noted that the Council was currently out for consultation on an on-street parking review in partnership with Surrey County Council, which involved 27 proposals. The deadline for feedback on the consultation was 9 September 2022.

Crowdfund Guildford was now open for a new funding round with the deadline for applications being 28 September 2022.  An online workshop would take place on 8 September 2022 for any groups or residents interested.  The Leader was pleased to announce that another £2,000 had been allocated to a crowdfunding project in Merrow to rebuild the War Memorial in time for Remembrance Sunday.   

The Leader thanked the team in the Parks and Countryside service for their work in securing the award of Green Flag status for seven of the Council’s parks again this year.  

Zero Carbon Guildford were launching a sustainable business network to establish a community led climate action plan.  The official launch for the event would be held on 14 September 2022.

The Leader also announced that Guildford Heritage Open weekend would be held on 9 to 11 September.  Events over the Heritage Open Days offered free entry to more than 50 locations in the borough and was England's largest celebration of history and culture.  

The Guildford Design Awards exhibition would be taking place at the Guildhall on 9 September in collaboration with the Guildford Society.  The exhibition would highlight those buildings in the borough that had won awards for good design.  The exhibition would also visit five Surrey villages.

Car-free day would be held on 25 September with further details to be released soon. 

The Leader noted that September was also Walking Festival month, with a different walk organised for every day in September, with further details from the Tourist Information Centre.

The intention of the report was to collate and track progress of all recommendations made by the Overview and Scrutiny Committee to the Executive throughout the year, and to log the Executive decisions on the submitted matters. The Executive agreed the response to the recommendations on 22 March 2022.

The Executive noted the report and that there had been no updates since the previous meeting.

The intention of the report was to collate and track progress of all recommendations made by the Overview and Scrutiny Committee to the Executive throughout the year, and to log the Executive decisions on the submitted matters. The Executive agreed the response to the recommendations on 22 March 2022.

The Executive noted the report and that there had been no updates since the previous meeting.

The report was introduced by the Leader of the Council in the absence of the Lead Councillor for Resources.

The Midleton Industrial Estate comprised around 5.7 acres within the Council’s freehold ownership and the Executive had approved a business case for its redevelopment on 24 January 2017.

The Estate was divided in accordance with the long leaseholds previously granted but Officers have been pursuing a phased development of the Estate in line with when existing leases have expired.

The Executive considered a report outlining progress with the delivery of the project, including the current spend, the works completed to date as well as the remaining scope of works to be delivered during 2022-23.  The work had been tendered and awarded to Francis Construction Limited.

The Executive was asked to approve the transfer of £5,557,000 from the provisional capital programme to the approved capital programme to complete the fourth and final phase of the redevelopment. It was anticipated that when the final phase was complete the site would raise over £1 Million per year in income for the Council.

There would be a additional check to ensure that the necessary power supplies were in operation prior to the commencement of Phase 4 as there had been an issue previously which had delayed the project.

Thereafter, the Executive was content to,

RESOLVE:

(1)      That the urgency decision of the Director of Resources to transfer the sum of £5.557 millionfrom the provisional capital programme to the approved capital programme be ratified to enable the completion of the design and construction of phase four of the Midleton Industrial Estate redevelopment, as detailed in the report submitted to the Executive.

(2)       That the Joint Strategic Director (Place) be authorised, in consultation with the Lead Councillor for Resources, to enter into such contracts as are necessary to enable the transactions to be completed within the allocated budget.

Reason(s):

To complete the redevelopment of Midleton Industrial Estate, to enhance both the capital value and rental income of the Council’s property holding.

Decision:

(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.

Reason(s):

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:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

No.

The Leader of the Council introduced the report in the absence of the Lead Councillor for Resources.

Wey House, Park Street was a prominent office building providing 45,382 sq. ft. of accommodation (net internal area excluding communal space) spread over four floors located in the heart of the town centre on the gyratory opposite Guildford’s mainline station.

The property was purchased by the Council as an investment asset in 2016 for £22.65 million and was the biggest single income producing property asset within the Council’s portfolio. The outcome of the Asset Management Plan recommended retention due to its significant income return, strong tenant covenant and minimal management costs.

The building was let in its entirety as the HQ premises for Stevens & Bolton LLP, an established legal firm, on a lease dated 3 March 2010 which would expire on 2 March 2027. The tenant held an Option for a Reversionary Lease for a term of 10 years from 3 March 2027 subject to a tenant only break clause on 3 March 2032.  Stevens & Bolton paid a rent of £1.3 million per annum which was due for review in March 2025.  Recent agreement had been reached for the top two floors of the building to be sub-let to Media Molecule (a gaming company owned by Sony Corporation).

The tenant had approached the Council with a proposal to remain in the building beyond the expiry date of the current lease in March 2027 subject to upgrading the heating and air conditioning system along with installation of Cat A low energy LED lighting throughout the building to be carried out at the Council’s cost.  The cost of these works was estimated to be £800,000.  Consequently, officers agreed terms with the tenant to surrender the current lease and enter a new lease for a term of 15 years without break at a rental income of £1.3 million per annum subject to a 12-month rent free period, upwards only rent reviews in March 2025 and 5 yearly thereafter, and a landlord’s contribution to tenant works up to a maximum of £800,000.

The risk of not renewing the tenancy would result in a potentially empty building with the Council still committed to undertaking the upgrade to the facilities. On balance, the Executive agreed that the new arrangements would provide a longer-term level of certainty over income, would also retain a significant local business in the town centre and there would be a level of control over the maintenance of the building.

It was noted that under legislation the EPC rating for the building would need to be improved during the lifetime of the lease. The detail of the responsibility for those improvements should be included in the new lease. 

The Leader of the Council was pleased to see the transparency of the reporting in this matter.

Officers were commended for the negotiation of the new arrangements.

RESOLVED:

(1)          That the surrender of the existing lease to Stevens & Bolton and a simultaneous re-grant of a new 15-year  ...  view the full minutes text for item EX28

Decision:

That a virement of £600,000 from the capital contingency fund for the Lido Drainage and Modernisation Project be approved to enable the project to start on time and hopefully be completed during the winter period to ensure the minimum disruption to the potential customers of the venue.

Reason(s):

The Lido cannot operate without satisfactory drainage, it is recognised that replacement of the failed below ground drainage is not practicable without the corresponding demolition of the changing facilities and breaking out of the existing concrete floor slab that sit directly above.  The external changing facilities are beyond their economical and useful life expectancy. The existing facilities fall short of expected modern standards, which can be addressed as part of the process.

Other options considered and rejected by the Executive:

None.

Details of any conflict of interest declared by the Leader or lead councillors and any dispensation granted:

None.

The report was introduced by the Lead Councillor for Environment.

Guildford Lido was a popular local attraction built in the 1930s. There was a 50-metre open air swimming pool which was set in 6 acres of grounds. A survey had identified that the original drainage had failed and needed to be replaced. To access the drainage significant demolition was required. This presented an opportunity to update and modernise the changing, toilet and shower space at the Lido. The timetable of works was challenging but it was hoped that completion would be by April 2023 in readiness for the summer season. The ‘Friends of Guildford Lido’ has been engaged with the proposed changes and upgrades to the site.

The scheme has been subject to an open tender process and nine tenders were received.  The tenders were all significantly over budget. For the scheme to go ahead, a virement of £600,000 was required from the capital contingency to supplement the use of £1.5 million from the ear-marked Leisure Partnership Reserve.

The Executive noted the impact of the current rates of inflation on any construction project at present as well as obstacles to supply chains which could cause delays. The Leader observed that the increased costs had accounted for additional working hours to try to mitigate challenges and to deliver on time. It was noted that leisure services were discretionary but that the Council recognised the value of the site to local residents.

The loss of revenue to the Council whilst works were undertaken could be estimated on last year’s figures which provided an income from the Lido of £636,000 (to be validated in Freedom Leisure’s Annual Report). The Council supported the Lido within the Management fee to Freedom Leisure at around £182,000 per year. Visitor numbers were variable and dependent upon the summer weather ranging between 60,000 and 140,000 visits. It was estimated the Lido made a surplus on average every three years, but that given the investment in facilities proposed this could see an improvement in future years as a more attractive offer to the customer and the operator.

Consequently, the Executive,

RESOLVED:

That a virement of £600,000 from the capital contingency fund for the Lido Drainage and Modernisation Project be approved to enable the project to start on time and hopefully be completed during the winter period to ensure the minimum disruption to the potential customers of the venue.

Reason(s):

The Lido cannot operate without satisfactory drainage, it is recognised that replacement of the failed below ground drainage is not practicable without the corresponding demolition of the changing facilities and breaking out of the existing concrete floor slab that sit directly above.  The external changing facilities are beyond their economical and useful life expectancy. The existing facilities fall short of expected modern standards, which can be addressed as part of the process.