Agenda item

Report of the Executive Director of Place

The Cabinet considered a report of the Executive Director of Place that set out proposals for the change of use of land designated as Phase 2b of Belgrade Plaza.

A corresponding private report detailing confidential aspects of the proposals was also submitted to the meeting for consideration.

In May 2005 Oakmoor Deeley Partnership (ODP) were appointed as the Council’s preferred developer for the Belgrade Plaza scheme.  The Council and ODP subsequently entered into a Development Agreement to facilitate the development of Belgrade Plaza.  A 125 year leasehold interest in the site was simultaneously granted by the Council to ODP.

Whilst the early phases of the Belgrade Plaza scheme, which incorporated hotel, car park, retail and café bars and restaurants, were successfully developed, the subsequent phases known as 2b and 3, which were to provide a hotel, café/bar, retail and residential apartments, were stalled by the recession.

However, during late 2015, following the assignment of part of the lease relating to Phase 3 from ODP to the Downing Group, development had restarted with construction of a mixed use scheme due for completion in September 2017.

Phase 2b which was subject to the original Development Agreement, and related to a 304 star quality hotel, remains undeveloped.  However having marketed this site extensively ODP have been unable to secure any credible interest from appropriate operators.

Accordingly discussions with ODP and their bankers have resulted in a revised plan for the delivery of Phase 2b being proposed.  Subject to planning consent being granted, this plan would comprise a mixed use scheme including a family hotel, residential flats and student accommodation. It was intended that the scheme would be delivered by the Downing Group who are currently on site constructing Phase 3.

In order to deliver this scheme the Council would be required to vary the ground lease to permit such development. subject to planning consent being granted.

In addition, due to the protracted period over which Belgrade Plaza had been delivered and the changing uses being accommodated on the site the 1,100 space Belgrade Plaza multi-storey car park (MSCP) (formerly known as Leigh Mills Car Park) had never traded to its potential.  In recent years 900 of the 1100 spaces have effectively been taken out of business rates as they were barely used.

Coventry University had a long standing requirement for an additional Multi Storey Car Park (MSCP) and terms had been agreed between ODP and the University whereby the University would acquire the long leasehold interest in the car park and operate the car park themselves. The car park would be predominantly made available to staff and students but 350 spaces would remain available to the general public at all times on comparable terms to those available on other Council car parks. This would provide more spaces available to the public than are currently being used and would be sufficient to support the development proposed on Phase 2b.

The lease by which ODP hold the MSCP effectively required them to operate it as a public car park. In order to allow the University to use the MSCP as they propose, the Council would be required to vary the terms of the ground lease.

In consideration for the Council agreeing to vary the ground lease to facilitate the sale of the car park ODP would prepared to pay premiums for site 2b, subject to planning consent being granted. This represented a negotiated share of the uplift in value of the land and car park arising for the variations the Council is making to the leases.

RESOLVED that the Cabinet:-

1)  Approves the change of use and subsequent assignment of the land designated as Phase 2b of Belgrade Plaza, as outlined on the plan attached to the report, to the Downing Group conditional on planning consent being granted for a mixed use scheme to include residential flats, student housing and hotel.

2)  Approves the change of use and subsequent assignment of the land designated as Phase 1 of Belgrade Plaza, as outlined in the plan attached to the report, to Coventry University for continuing use as a multi-storey car park on the terms set out within the report.

3)  Delegates authority to Executive Director of Place and Executive Director of Resources to vary the ground lease dated 20^th May 2005 and to enter into the necessary legal documentation to facilitate the delivery of the development on Phase 2b and to allow the assignment of that part of the demise forming the multi storey car park to Coventry University.