Issue - meetings

Report of the Deputy Chief Executive (Place)

The Cabinet considered a report of the Deputy Chief Executive (Place), that would also be considered at the meeting of the Council on 15 January 2019, on proposals for the development of the land and buildings between Corporation Street, Upper Well Street, Lamb Street, Chapel Street and Bishop Street.

A corresponding private report was also submitted to the meeting setting out the commercially confidential matters of the proposals. (Minute 102 below refers.)

As part of the City’s plans to host an outstanding UK City of Culture 2021 programme, promote Coventry’s visitor economy and deliver its wider economic development agenda, Coventry City Council was committed to seeing new high quality hotel developments delivered within the City Centre.

There was an opportunity to facilitate the delivery of a new ‘boutique’ hotel for the City, to be open and operational before 2021, through a proposal to be delivered by Far Gosford Developments Limited who were prepared to invest a significant amount of funding to refurbish and redevelop the vacant former Coventry Evening Telegraph buildings on Corporation Street. The proposed hotel site was situated within a wider 2.6 acre regeneration opportunity of which the Council was the freeholder of the land.

Due to the significant costs involved in refurbishing such an iconic set of buildings and the relatively unproven market for higher end hotels within Coventry, the development of a hotel on its own was not financially viable. In order to facilitate the delivery of the hotel, there was an opportunity to cross-subsidise its development through the disposal of adjacent sites at Chapel Street, Lamb Street and Bishop Street to deliver student accommodation. The land receipt the Council would ordinarily receive for these sites would then be used to contribute towards the capital cost of funding the hotel element of the wider scheme.

Whilst the Council was the freeholder of the Land, there were eleven long leasehold interests on the Land. Far Gosford Developments Limited had acquired the majority of these leasehold interests and to facilitate this regeneration scheme the Council was being asked to grant new 250 year head leases across the sites comprising the wider development (subject to the existing leases) and to widen the existing user clauses to allow for residential or student accommodation and a hotel to be developed. These lease arrangements would allow for Far Gosford Developments Limited to access the private and public development funding necessary for the scheme to go ahead.

As well as the reinvestment of its land receipts into the overall regeneration scheme, the Council would also forgo its existing rental income for the term of the unexpired leases (the leases had terms of between 38-89 years unexpired). The Council had appointed independent commercial consultants to provide a Royal Institute of Chartered Surveyors ‘red book’ valuation of the sites within the overall scheme to ensure that the Council met all its S123 obligations under the 1972 Local Government Act and receives ‘best consideration’ for its land. Their independent valuation had shown that any premium  ...  view the full minutes text for item 99