Decision Maker: Cabinet
Decision status: For Determination
Is Key decision?: Yes
Is subject to call in?: No
The Cabinet Member for Housing, Regeneration and Planning introduced the report, which set out the next steps for developing a leaseholder offer for Love Lane leaseholders.
The Cabinet Member advised that the Council had received legal advice that the consultation on the leaseholder offer for Love Lane leaseholders had two challenges and there was a need to re-consult on the leaseholder offer. Therefore, the report was seeking approval to re- consult and also seeking a delegation to the Strategic Director of Regeneration, Planning and Development and the s151 Officer to agree all third party acquisitions (including all acquisition prices, costs, compensation packages and fees) within the High Road West Regeneration area (other than any compulsory acquisitions).
The Cabinet Member emphasised that the Council had been working hard with leaseholders on the offer and remained committed to continuing this work.
In response to questions from Cllr Engert and Cllr Brabazon, the following information was noted:
Further to considering the exempt information at item 26,
RESOLVED
1. To consider the rationale set out in paragraphs 6.12-6.17 and agree that:
a. the Council undertakes a new consultation on the proposed Love Lane Leaseholder Offer and;
b. That a further report be presented to Cabinet for decision following that further consultation.
2. To agree the acquisition of all third party land interests within the boundary of the High Road West Blue Line Plan within Appendix 2 (other than any compulsory acquisitions), to be acquired by private treaty by the Council pursuant to the terms of the Compulsory Purchase Order Indemnity Agreement (“CPOIA”) dated 20 December 2017, to facilitate the High Road West Regeneration Scheme and gives delegated authority to the Strategic Director of Regeneration, Planning and Development and the section 151 Officer to agree the final price (including the land price, costs, compensation and fees) to be paid for each third party land interests provided that the total sum to be spent on these acquisitions shall not exceed the sum referred to in the approved capital programme and mentioned in paragraph 8.6.
Reasons for decision
Recommendation 1
From November 2017 through to January 2018, the Council spent two months working with and engaging leaseholders on the Love Lane Estate on a Leaseholder Offer. The Council’s ambition has been to work with resident and non-resident leaseholders to develop an offer, which allows all resident leaseholders to remain in the High Road West area and to ensure all leaseholders are not financially worse off.
Following this engagement, the Council formally consulted on an Enhanced Leaseholder Offer, which sought to deliver the following enhancements from the ERRPP for resident leaseholders:
· A further rehousing option for leaseholders referred to as a leasehold swap;
· An enhanced equity share offer which tackles concerns regarding affordability and allows resident leaseholders to access a new home within the regeneration area; and
· A12 month grace period for family members/ beneficiaries which tackles concerns regarding succession
Through undertaking this consultation, it has become apparent that the consultation material was flawed in two respects. Firstly, it did not explain clearly, why some aspirations of leaseholders have been included in the offer and why some have not. Secondly, it did not explain that the definition of a resident leaseholder in the Love Lane Offer aligned with the definitions set out in the Leaseholder Guide (agreed by Cabinet in 2014) and as such is more restrictive than that in the ERRPP.
Officers therefore recommend that the Council, redraft the consultation materials and re-consult to ensure leaseholders are fully and properly consulted.
Officers advise that the Council employ an independent financial advisor ahead of undertaking the consultation to advise leaseholders how the proposed offer will affect them.
Recommendation 2
The Council entered into a Development Agreement and a CPOIA with Lendlease on 20 December 2017. These legal agreements set out the obligations on each party in relation to the delivery of the Scheme.
A key obligation on the Council is to secure all of the third party land interests within the Scheme, circa 100 interests, by private treaty if possible. To secure these land interests the Council will be utilising a combination of Housing Zone funding and borrowing. All costs the Council will incur will be reimbursed through the CPOIA with Lendlease.
At present, the Council’s constitution requires that any acquisitions that exceed a £500,000 price should be agreed by the Council’s Cabinet, acquisitions between £250,000 (and under) or less than £500,000 can be approved by the Strategic Director of Regeneration, Planning and Development.
In order for the Council to be able to acquire all of the interests in a timely and efficient manner, it is recommended that the Cabinet grant delegated authority to the Strategic Director of Regeneration, Planning and Development and s151 Officer to agree all third party land acquisitions (including all acquisition prices, costs and compensation) that the Council needs to acquire within the High Road West area pursuant to the CPOIA.
All land acquisition prices, costs and compensations will be based on a valuation report from a RICS registered value and will be based on the commitments set out in the High Road West Business Charter and the Compulsory Purchase Order Code.
Alternative options considered
Leaseholder Offer
Officers have considered not undertaking another consultation with leaseholders on the Love Lane Estate, but have discarded this option. This is because it is clear that the engagement and consultation were flawed as set out above.
Delegated authority for the acquisition of properties within the High Road West area
Officers have considered not seeking delegated authority to the Strategic Director of Regeneration, Planning and Development and the s151 Officer to agree the acquisition of all third party land interests equalling or exceeding a capital value of £500,000 (including the price, costs and compensation) and relying on the delegations within the Council’s constitution to make acquisitions.
There are a significant number of property interests within the High Road West area, which are anticipated to be above £500,000 and as such, a Cabinet decision would be acquired for every acquisition. Given that each Cabinet decision has a three-month lead in process, seeking Cabinet approval will not only cause time delays, it will also considerably congest the Cabinet agenda. It is absolutely the case that to ensure the successful delivery of the Scheme, Officers need to be able to negotiate and finalise transactions in an expedient manner so that third party interests are happy to transact with the Council. For these reasons, this option has been discounted and Officers are seeking delegated authority.
Report author: Interim Strategic Director, Regeneration, Planning and Development
Publication date: 08/03/2018
Date of decision: 06/03/2018
Decided at meeting: 06/03/2018 - Cabinet
Accompanying Documents: