Agenda item

Report of the Leader and Cabinet Member for Strategic Growth attached.

The Leader and Cabinet Member for Strategic Growth presented a report seeking approval for the disposal of two plots of land at Chamberhall Business Park to Crown Gas & Power Ltd. The proposals would enable the development of plot 1, a 40,000 sq ft headquarters office building and plot 2, a 25,000 sq ft industrial scheme.

The Cabinet was advised that the development would deliver significant economic benefits, including:

• The creation of approximately 250 new jobs;
• £310,000 per annum in business rates;
• An estimated £8 million GVA per year;
• Increased town centre expenditure of around £560,000.

It was noted that the disposal constituted a subsidy under the Subsidy Control Act 2022, but the decision was justified given the substantial economic and social benefits.

Councillor M. Smith queried whether the proposed jobs represented new employment opportunities or relocations from existing sites. In response, the Leader confirmed that the majority would be additional jobs, reflecting company growth and including construction?related employment. The development would offer a mix of office and industrial roles, many of which could be matched to local jobseekers, contributing positively to the borough’s employment market.

Councillor R. Bernstein welcomed the proposals, stating that the development represented excellent news for Bury, and confirmed his support.

Councillor S. Arif expressed support for the decision and thanked officers for the detailed briefing provided prior to the meeting.

Members recognised that the proposals were the result of months of work and represented a strategic opportunity to support the continued growth of the borough. The development was regarded as a positive step aligned with long?term economic ambitions for Bury.

Decision:
Cabinet:

1. Notes previous attempts to sell the site and the alternative options, as set out below.
2. Approved the disposal of the two plots of council land at Chamberhall to Crown G&P to facilitate the delivery of a new head office facility on plot 1 and industrial development on plot 2, (shown edged red on the plan in Appendix 2) subject to the Council carrying out an assessment of the subsidy’s compliance with the subsidy principles set out in Schedule 1 of the Subsidy Control Act 2022, and subject to the Council making the decision that the subsidy is consistent with those principles
3. Delegated the making of required entry on to the Subsidy Database to the Assistant Director for Corporate Assets and Facilities Management.
4. Delegated the signing of all contracts required to complete the sale of the Site to the Director of Law and Governance

Reasons for decisions:

The proposed disposal enables the Council to facilitate the delivery of a new head office on behalf of an established regional business, with the following benefits;

·       bringing in the region of 250 jobs to the borough.

·       The proposed scheme will generate an estimated £310,000 per annum in business rates.

·       Generate £8.0 million net additional GVA annually to the local economy and an increase in footfall and spending in Bury town centre, supporting local shops, cafés, and services, with estimated gross expenditure of £560,000 per year as estimated by Amion, as more fully detailed within the body of the report.

Alternative options considered and rejected:

Dispose the whole site on the open market

a – Sale of Property by Private Treaty (via a marketing campaign). This approach would not provide the certainty of the proposed transaction and would lead to a much longer time for delivery of employment space and therefore the associated jobs.

b – Auction This approach could provide certainty on disposal timing but would lead to a much longer time for delivery of potential employment space and therefore the associated jobs. Both routes may lead to a new owner land banking the site which would not bring forward the jobs or business rates for the borough. These factors could be mitigated in a sale contract, but their inclusion could supress the sale price achievable.

Seek a development partner via a new tender exercise.

The Council could proceed with a further tender exercise for a developer to deliver an industrial scheme, however this is unlikely to provide a larger capital receipt.

This route has been explored previously and restarting this process would also be subject to economic impact during the selection/planning period and legal review.

It should be noted however that whilst CBRE valued the site at £1.825m there Is a risk that during any post-tender period any changes to external economic factors could result in changes in the valuation fundamentals (as has happened in the previous tender exercise) which could negate the potential capital receipt. The Nolan Real Estate report reporting negative land values highlight the sensitivity on land value the key development inputs. Analysis of CBRE’s and Nolans’ valuation’s detailed in the main body of the report

Dispose of the site on plot-by-plot basis.

Selling the site as a whole provides economies of scale for delivery which would otherwise not be available if the sites were disposed of in isolation. This disposal method is also subject to the same risks as set out on a whole site disposal above.

Self-develop for industrial use

There is significant risk and cost involved in this option. Due to the council resource position (financial and staffing) this has been discounted. This option would also provide a negative return.

Self-develop for office use

Financially this would provide an even larger negative return and even if financially viable would provide significant risk and cost to the Council.

Do nothing

This option does not provide the economic growth, job opportunities or any capital receipt. There are also ongoing liabilities for holding the land.