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Decision details

SOUTH GROVE SITE C - LOAN DRAWDOWN AND LAND DISPOSAL TO SIXTY BRICKS LTD.

Decision Maker: Cabinet

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: No

Purpose:

Cabinet is recommended to:

·         Agree that the Council make a loan available to Sixty Bricks Ltd of a specified amount (appendix B) on the basis of the draft loan agreement (Appendix E) and the business case  (appendix B) for the South Grove – Site C project.

·         Agree that the Council makes an equity investment in Sixty Bricks Ltd of a specified amount, on the basis of the draft agreement, appendix E.

·         Agree that the Council enters into a development agreement with Sixty Bricks Ltd on the basis of the draft agreement, appendix E.

·         Delegate to the Director of Property and Asset Management in consultation with the Corporate Director of Housing to buy back any commercial or non-commercial leaseholder interests to enable the progression of the scheme

·         Delegate to the Assistant Director of Housing Strategy and Development in consultation with the Portfolio Lead Member for Economic Growth and High Streets and the Head of Supply Chain (Place) the authority to novate existing contracts in relation to this development from the Council to Sixty Bricks Ltd.

 

Decision:

Cabinet:

 

(1)          agreed to a new capital budget of £11.606m in the Housing Revenue Account (HRA) capital programme funded by GLA grant, sales of shared ownership property, borrowing and other housing capital resources to fund the affordable housing to be built for the HRA;

(2)          agreed to new capital budgets in the general fund of £11.152m and £4.779m to fund the loans and equity investment respectively in Sixty Bricks Ltd; the loans to be funded by borrowing and the equity investment to be funded from general fund reserves and/or capital receipts;

(3)          agreed that the Council make a loan available to Sixty Bricks Ltd of up to £11.152m on the basis of a loan agreement (as summarised in Appendix E of the report), and the financial appraisal is at Appendix B of the report, for the Brunner Road, Site C project, with the final terms of the loan to be delegated to the Strategic Director of Finance and Governance in consultation with the interim Commercial Director of Housing Delivery;

 

(4)          agreed that the Council makes an equity investment in Sixty Bricks Ltd. of up to £4.779m;

 

(5)          agreed that the Council enters into a development agreement with Sixty Bricks Ltd. Terms and conditions of this agreement to be agreed between the London Borough of Waltham Forest and Sixty Bricks legal representatives;

 

(6)          agreed in principle that, subject to planning permission, the Council will enter into a long lease for the land outlined on the plans attached at appendix A to the report to Sixty Bricks Ltd who will develop the Brunner Road, Site C site as set out in the report with the final terms of the lease to be delegated to the Director of Property and Asset Management in consultation with the interim Commercial Director of Housing Delivery and the Strategic Director of Finance and Governance.

 

(7)          noted that the development will require the leasehold transfer of land valued as shown in Appendix B to the report currently in the General Fund to Sixty Bricks Ltd, in accordance with regulations governing General Fund land disposals, under the delegated powers recommended for approval.

 

OPTIONS & ALTERNATIVES CONSIDERED

If the Council were to do nothing on the Brunner Road, Site C site, it would be an under-utilisation of an asset within a prime location in Waltham Forest. This option is not recommended as the Council would lose the opportunity to provide new homes and a new facility for the CCG and St. James’ GP practice.

The Council could dispose of the site on the open market. The Council would expect to receive a capital receipt but would have no control over future development of the site, except through planning powers.

There are benefits to the Council in transacting with Sixty Bricks to deliver this opportunity. Options to be considered along with the individual benefits are set out in the confidential Appendix B to the report.

 

Report author: Jennifer Daothong

Publication date: 10/10/2019

Date of decision: 10/10/2019

Decided at meeting: 10/10/2019 - Cabinet

Accompanying Documents: