Agenda item

Report of the Director of Business, Investment and Culture

The Cabinet considered a report of the Director of Business, Investment and Culture, which set out proposals for the acquisition of the IKEA premises and adjoining land and property at Croft Road, Coventry for the purpose of creating a nationally significant Collections Centre for the storage, care and management of cultural, arts and historic artefacts.  In addition, the report sought acceptance of capital grant towards the new Collections Centre project, along with the design and professional fees that would be required to take the scheme through detailed design and tendering.

A corresponding private report was also submitted to the meeting setting out the commercially confidential matters of the proposals. (Minute 82 below refers.)

It was noted that the IKEA premises closed for business in March 2020 and the long leasehold interest was available for purchase.  The purchase price, fees and taxes, were set out in the corresponding private report.  The Council already owned the freehold for the site. 

The Council had been working with Arts Council England, the British Council, Culture Coventry Trust and, more latterly, Coventry University, to explore options for converting the building to a new shared national Collections Centre facility, along with associated education, skills and learning facilities to provide opportunities for much greater public access and engagement with these extensive and important collections.  The modelling of the options within the building has arrived at a ‘base’ option which has proved to be technically deliverable and financially viable, with the capital expenditure, fees and costs of capital financing being serviced through the rent received over the length of the leases, subject to agreeing terms with partners.

There is ongoing feasibility work to explore the deliverability of more expansive options, such that the report submitted was seeking only to acquire the premises and obtain further fees for detailed development, on the basis that a further report would be submitted once further feasibility had been undertaken as the these more expansive options.

Having arrived at a base option that was technically deliverable and financially viable, the timing to acquire the premises was driven by the small window of availability to secure proposed capital grant funding towards the acquisition, the details of which were set out in the corresponding private report.

RESOLVED that, the Cabinet:

1.  Approve the acquisition of the leasehold interest n the site shown edged red in Appendix 1 of the report submitted.

2.  Approve additional professional fees of £1.311m to develop the option designs to RIBA Stage 3 and Stage 4 (contractor procurement through a compliant process) subject also to finalising commitment of partners (through a Partnership Agreement) to the underwriting of these fees should the project not proceed.

3.  Delegate authority to the Director of Property Services and Development and the Director of Business, Investment and Culture, following consultation with the Director of Law and Governance and the Director of Housing and Transformation, to commence the necessary procurement for the appointment of the professional design team including any necessary contract extensions.

4.  Delegate authority to the Director of Property Services and Development and the Director of Business, Investment and Culture, following consultation with the Director of Finance, the Director of Law and Governance, the Cabinet Member for Jobs and Regeneration and the Cabinet Member for Housing and Communities, to undertake the necessary due diligence and finalise the terms of the leasehold transaction and acquisition between the Council and IKEA Properties Investments Limited.

5.  Note that the principal partners, subject to their own due diligence processes and final approvals on terms delegated to the respective Chief Executives or identified representatives, have approved the principle of entering into Agreements for Lease with the Council as tenants within the new Collections Centre.

6.  Delegate authority to the Director of Property Services and Development and the Director of Business, Investment and Culture, following consultation with the Director of Finance, the Director of Law and Governance, the Cabinet Member for Jobs and Regeneration and the Cabinet Member for Housing and Communities, to finalise the necessary negotiations and any due diligence associated with the Heads of Terms for each of the partners and the entry into the new Agreements for Lease arrangements between the parties.

7.  Recommend that the Council:

a)  Approve capital expenditure in the sum specified in the corresponding private report for the purchase (plus acquisition fees and Stamp Duty Land Tax) cost to fund the acquisition of the leasehold interest of the site shown edged red in Appendix 1 of the report submitted and to include this within the approved capital programme which shall be funded from a combination of capital grant and prudential borrowing.

b)  Delegate authority to the Director of Business, Investment and Culture and the Director of Finance, following consultation with the Cabinet Member for Strategic Finance and Resources, the Cabinet Member for Jobs and Regeneration and the Cabinet Member for Housing and Communities, to identify and bid for grant assistance, where available, that supports the aims of the Collections Centre project.  The delegated authority given under this recommendation shall include the power to accept the terms and conditions of grant funding and the entering into all necessary legal agreements to secure such grant funding.