Minutes:
The Committee considered a report of the Executive Director of Place, which provided an update on the Friargate development and sought approval to sub-lease part of the Friargate building. The report was due to be considered by Cabinet and Council at their meetings on 24th January, 2017. There was also a corresponding private report detailing confidential aspects of the proposals (Minute 52 below refers).
The report indicated that in 2013, the Council approved starting the Friargate Business District to regenerate the City, transform the Council and deliver savings, through the purchase of the first building on Friargate for occupation by the Council. The Councils operational office buildings would be reduced and agile and flexible working arrangements introduced to support productivity and efficiency gains from Council staff.
The importance of having a second tenant was recognised and approval had been given to negotiate with the Royal Institution of Chartered Surveyors (RICS) to help secure them as the second tenant on Friargate.
The RICS were the institution governing Chartered Surveyors globally and both strategically important nationally and as a second tenant to the Friargate scheme were likely to provide confidence to other potential private sector tenants. The RICS currently had major offices in London and Coventry. The Coventry office was becoming obsolete and the RICS had been looking to relocate to new offices for a period of years. Many of the options under consideration were outside Coventry.
In 2013 discussions commenced between the Council, Friargate Coventry LLP and the RICS to secure the national HQ of the RICS as the second occupier of Friargate and build further space for letting to other occupiers.
In the absence of a second building under construction at Friargate there was an opportunity for the Council to negotiate terms directly with the RICS in order to sublet space in its building at Friargate and secure the RICS as the second tenant on Friargate rather than losing this strategically important business occupier to both Friargate and potentially the City.
If these negotiations proved successful this would require the Council to retain operational building capacity within its existing building portfolio for a quarter of the staff (470) intending to move to Friargate, whilst further discussions continued in order to try and secure early delivery of Building 2.
To that end the opportunity had now arisen for the Council to make a formal application to the West Midlands Combined Authority (WMCA) to secure up to £50m to bring forward development opportunities around Friargate to supplement the £100m already secured from the WMCA for City Centre South.
The report proposed that authority be delegated to officers (in consultation with the relevant Cabinet Member) to make such variations to the Collaborations Agreement (and other associated documents) that may be required to achieve the objectives set out in the report submitted. The delegation would be limited only to the extent required to secure the sub-leasing of part of the Council’s building at Friargate to the RICS.
Members questioned the officers on a number of issues and responses were provided, matters raised included:
· Leasehold, freehold, landownership and details
· Contingency if the Royal Institute of Chartered Surveyors (RICS) do not take up the offer
· Support for the project from the West Midlands Combined Authority
· Progress on discussion with potential tenants
· Financial implications for the Council
· Timescales for developments
· A concern that members hadn’t had the full opportunity to scrutinise the issues contained in the report and that further updates on progress should come to Scrutiny as a matter of course.
RESOLVED that:
(1) The recommendations to Cabinet be endorsed.
(2) Cabinet be recommended to ensure that Scrutiny Co-ordination Committee is included in the reporting process relating to Friargate.