Report of the Chief Executive
The Cabinet considered a report of the Chief Executive, that would also be considered by Council at its meeting on 8th September 2020, that sought approval for funding to acquire the land and building to be constructed necessary to deliver the Two Friargate scheme. Appendices to the report provided a Site Plan and the General Masterplan Layout.
A corresponding private report was also submitted to the meeting setting out the commercially confidential matters of the proposals. (Minute 30 below refers.)
The delivery of the Friargate business district was a key corporate priority for the Council. The Council secured £51.2m of grant funding from the West Midlands Combined Authority in 2018 to support the delivery of the next commercial office building, Two Friargate. A condition of the funding was the establishment of the Friargate Joint Venture between the Council and Cannon Cannon Kirk to deliver the wider Friargate development scheme. Following the establishment of the joint venture in January 2019, work on design and development stages for the building and a tender process to appoint a contractor to deliver the building had been on-going. Two Friargate was due to start on site during Autumn 2020.
The total capital cost of the Two Friargate scheme was anticipated to be £68.2m. This report sought approval for the £17m of funding (in excess of the WMCA grant) to acquire the land and building to be constructed necessary to deliver the Two Friargate scheme.
Friargate was located next to Coventry Railway Station, one of the fastest growing stations outside of London, which was currently benefiting from an £78m masterplan to create a new transport hub, second station building and new car park.
RESOLVED that the Cabinet:
1) Authorises officers to arrange for the completion of the Agreement for Lease and all associated legal agreements between the Council and Friargate JV Project Limited necessary to allow the Council to purchase the 250 years long leasehold interest in the land and building to be constructed on Two Friargate (as shown edged red on the plan in Appendix 1 attached to the report).
2) Authorises the completion of the Project Development Management Agreement and all associated legal agreements between the Council and Friargate Coventry Developments Limited necessary for the delivery of Two Friargate.
3) Authorises the completion of all necessary documentations with statutory undertakers and service providers required for the provision of service to facilitate the delivery of Two Friargate.
4) Delegates authority to the Strategic Lead – Property and Development, following consultation with the Finance Manager, the Director of Law and Governance, and the Cabinet Member for Jobs and Regeneration, to undertake the necessary due diligence and approve the final terms of the purchase.
5) Recommends that Council:
i. Approves capital expenditure up to a capped amount of £17m from prudential borrowing to fund the grant of the 250 years long leasehold interest in the land to the Council and the delivery of the building to be constructed on Two Friargate.
ii. Makes available additional working capital in the sum as highlighted in the private version of this report, to match the other Friargate JV Project Limited shareholder’s contribution and ensure that the JV Company is adequately funded to promote schemes to investors and secure development in accordance with their business plan
iii. Approves the necessary adjustment to the Capital programme to reflect the capital expenditure incurred in the delivery of Two Friargate.