Agenda item

Context:

To scrutinise the disposal process and appointment of a preferred bidder of the former County Hall site.

Key Issues:

·         The site is jointly owned by Monmouthshire County Council and Torfaen County Borough Council and a Project Board was established to manage the disposal of the surplus site. Monmouthshire County Council took the lead on the demolition of the buildings and Torfaen County Borough Council Estates Department has handled the marketing of the site on behalf of the two councils.

·         There have been two failed attempts to sell the site. The first sale was agreed but subsequently failed as attempts were made to reduce the price to a level that was unacceptable. The second sale was agreed to a bidder that was unable to complete the sale due to financial difficulties.

·         The Property was placed back on the market in March 2017 and following a two month marketing period, six offers were received.

·         Three bidders were shortlisted and invited to carry out further due diligence on the site which would allow their offer to be further refined. Bidders were allowed access to the site to undertake technical site investigations.

·         Following a reasonable period the three parties were asked for their “best and final offers”. The preferred bidder was selected from this process following evaluation of the bids by Torfaen County Borough Council Estates Department.

·         The preferred bidder was then allowed a period of time to work with the planners in order to refine the site design and make allowances for the layout including the siting of the social housing and the exclusion zone around the ancient woodland area. The bidder also further refined the drainage strategies.

·         The preferred bidders refined the “abnormal costs” which saw them increase significantly most notably following issues with their drainage strategy as a result of consultation with the highways authority and clarification of the Section 106 contributions.

·         Following this work a figure was arrived at which discounted the abnormal costs from the previous offer. Unfortunately, this figure was below the price expectations which the Councils had for the site. Further negotiations were undertaken with the preferred bidder to bring the land value in line with Council expectations and as a result, the offer has been revised to a level that both Councils can agree.

Member Scrutiny:

·         The bid and the development is compliant with policy, which, in Torfaen County Borough Council is 30% affordable housing provision.

·         The offer being looked at is subject to planning permission.  Therefore, the offer is as robust as it can be at this stage.

·         Two of the bidders were regional developers and the other was a volume house builder.

·         Capital receipts were estimated to be available to both authorities by the end of the calendar year.  However, Monmouthshire County Council has the capital receipt in its Medium Term Financial Plan for the 2019/20 financial year.

·         The offer equates to £2.9 million.  However, the contract has a proviso that if there is more scope for further plots, following planning permission, then this offer could increase.

·         The 30% affordable housing provision will remain, as the bid is a joint bid with a local housing association.  The likelihood of the 30% affordable housing provision being reduced is low.

·         The capital receipt achieved from the sale of the land will be split equally between the two authorities. Section 106 funding will be payable in the areas that it affects.

·         Gwent Police is looking to relocate to an alternative location in Cwmbran within the next two years.