Agenda and draft minutes

There were no apologies for absence.

A member with a disclosable pecuniary interest or a prejudicial interest in a matter who attends a meeting of the authority at which the matter is considered:

(i) must disclose the interest at the start of the meeting or when the interest becomes apparent, and

(ii) may not participate in any discussion or vote on the matter and must withdraw from the meeting room.

A member who discloses at a meeting a disclosable pecuniary interest which is not registered in the Register of Members’ Interests or the subject of a pending notification must notify the Monitoring Officer of the interest within 28 days of the disclosure.

Disclosable pecuniary interests, personal interests and prejudicial interests are defined at Paragraphs 5-7 and Appendix A of the Members’ Code of Conduct

None.

Please be advised that the Chair of Overview and Scrutiny has agreed that the call-in procedure shall not apply to this urgent decision. This is because the decision is urgent and any delay in implementation caused by the call-in procedure would seriously prejudice the Council's or the public's interests due to the fact that this is a National emergency and the Council must ensure that it does not hinder Fusion’s ability to carry on trading and restructure their business, the Chair of Overview and Scrutiny Committee has agreed that the decision is both reasonable in all circumstances, and that it should be treated as a matter of urgency. This is in accordance with Part 4, Section H, and Paragraph 18 (a) and (b) of the Council Constitution.

The Leader considered the report which sought authority to acquire the New River lease from Fusion for the sum of the New River loan outstanding to the Council, and for Fusion to then pay back the New River loan to the Council and to grant Fusion a new short-term lease for 12 months which will include break clauses at six and nine months.

The Leader RESOLVED to

i.          agree the acquisition of the New River Lease from Fusion for a sum equal to the amount of the loan outstanding under the Loan Agreement dated 11 July 2014;

ii.         agree to fund the acquisition through utilising the Responsiveness Fund capital budget and the approved capital programme contingency budget;

iii.        agree to the Council leasing back part of the site (not subject to the Tenancies) to Fusion Lifestyle for a period of up to 12 months; and

iv.        to note the Tenancies that will be directly managed by the Council on the site once the Head Lease is acquired (as set out in appendix C).

Reasons for decision

Fusion have indicated that in order to restart their business they need to obtain a loan under the CLBILS funding arrangements. A condition of that scheme is that the bank supplying that loan needs to take a charge on all the assets of Fusion and the charge needs to rank equal to any existing charges granted by Fusion.  On the 28th August 2020 a Cabinet Member decision agreed:

a)    That the Council does not agree to Fusion’s request to allow NatWest to take a security against the New River Lease. 

b)    In anticipation that Fusion may wish to hand back the lease to the Council, that the Council commissions a Leisure Management Options appraisal for the New River Sports Ground. The options to include proposals for the sale of the freehold, a new lease hold arrangement, direct management, or management by a third party.

As a consequence, Fusion have now offered the New River Lease back to the Council for the sum outstanding on the New River loan and for Fusion to repay this loan back to the Council.

The recommendation to accept the surrender of the lease for the sum outstanding and then for Fusion to pay back the loan to the Council represents a good financial proposition for the Council for the following reasons: -

·                    Since leasing the site to Fusion, the Council has not subsidised the site.

·                    The site has benefited from investment and been significantly upgraded since the lease was granted.

·                    The New River Lease has been valued by Wilks, Head and Eve (WHE) which demonstrates that the buy back of the lease is good value.

·                    The potential lease income per year for the site should meet the outstanding loan repayments and then from April 2030 would return an income that could be used to support other services.

·                    By taking the lease back the Council will be in full control of the site and free to review the future  ...  view the full minutes text for item 54.