Agenda item

(Report of the Director of Regeneration, Planning and Development. To be introduced by the Cabinet Member for Finance, Employment and Carbon Reduction). The report seeks approval of proposals with respect to Lea Valley Technopark.  

Exempt information pertaining to the report is set out under Item 12 below.

REPORT TO FOLLOW

Cabinet considered a report, introduced by the Cabinet Member for Finance, Employment and Carbon Reduction, which sought approval to purchase the Head Leaseholder’s interest in the Technopark site and to sell the freehold of the Technopark site to the Harris Federation. The report also sought approval for the additional capital cost of the purchase and any associated costs of vacant possession, to be added to the Council’s capital programme and agreement to vacate the site in order to support the provision of a school.

Prior to consideration of the report the Leader reminded Cabinet and other Members present that there was an exempt element of the report, which would be considered separately and that should not be discussed in the open part of the meeting.

The Cabinet Member for Finance, Employment and Carbon Reduction, Councillor Goldberg, noted that the proposals put forward represented an excellent opportunity to provide additional schools places in an area of high demand, whilst also allowing the Council to improve its financial position by ending its ongoing financial commitment to the Technopark.

In response to a series of questions from Councillor Wilson it was noted that the proposals in relation to the Technopark should be seen as a package that would be of benefit to the local community by providing additional school places and allowing the Council to end its financial commitment to the Technopark. The Leader reminded Cabinet that the Government had removed Council’s ability to build or open new schools and that the Department for Education had determined that a new Free School should be built in the area. The proposals put forward provided a means of meeting this requirement.

Councillor Goldberg noted in the 1980’s and 1990’s the establishment of facilities such as the Technopark had formed part of a widely adopted approach by Councils and Government to foster small business and to encourage growth in areas like Tottenham where traditional industries had been lost. The approach required to encouraging growth and development in the area was different now and the proposals put forward reflected this and would form part of the Council’s overall regeneration work in Tottenham. He concluded by noting that the package proposed represented good value to residents by providing additional schools places and enabling the Council to be released from its longstanding commitment to the Technopark.

In response to a question the Monitoring Officer advised that the information contained within the exempt part of the report referred is commercially sensitive information in particular in relation to negotiations with the Head Leaseholder and therefore could not be disclosed.

The Leader noted that during an email exchange earlier in the day with the Friends of Downhill Park she had given an undertaking that there would be consultation with them in relation to any new Multi Use Games Area (MUGA) and that Council officers would contact them as a matter of urgency following the meeting.

Cabinet considered exempt information pertaining to the report under agenda item 12.

RESOLVED:

1. That the current onerous leasing arrangement of Technopark and ongoing annual cost to the Council be noted;
2. That the interest from the Harris Federation for the purchase of the Technopark site for the provision of an all through free school in the context of local projected demand for pupil places be noted;
3. That the opportunity to reduce the financial liability of Technopark to the Council via the purchase of the Head Leasehold interest and then sale of the freehold to the Harris Federation to address projected pupil place demand in the local area be noted;
4. That approval be granted for the Council to purchase the Head Leaseholder’s interest in the Technopark site for a consideration not exceeding the purchase price detailed in the exempt section, Part B, of this report with delegated authority for the Section 151 Officer and the Director of Regeneration, Planning and Development Reduction to agree the final terms of the acquisition, following consultation with the Cabinet Member for Finance, Employment and Carbon Reduction;
5. That approval be granted to sell the freehold of the Technopark site to the Harris Federation, subject to the purchase of the head lease, for a consideration no less than the sale price detailed in the exempt section, Part B, of this report for the purpose of creating an all through free school on the site, and that authority be delegated to the Section 151 Officer and Director of Regeneration, Planning & Development, to agree the final terms of the acquisition, following consultation with the Cabinet Member for Finance, Employment and Carbon Reduction;
6. That approval be granted to sell to the Harris Federation on the condition they would work in collaboration and partnership with Haringey Council to inspire high achievement and raise aspirations for students at this new Free School that will reach wider into the local community and beyond; 
7. That agreement be given to the addition of the capital cost of the purchase and any associated costs of vacant possession, as outlined in this report, be added to the Council’s capital programme;
8. That agreement be given to vacating the site in order to support the provision of the school. Tenants at Technopark will be given a minimum of 3 months notice and the Council will work with them to find alternatives sites within the Borough; and    
9. That it be noted that the sale of the freehold to Harris Federation was subject to the deal being agreed with the Head Leaseholder.

Alternative options considered

The Council appointed Deloitte to provide expert advice on the options available to the Council to exit the current lease and management arrangement.  Further information on the options appraised is included in exempt part of the report.

The Council’s Corporate Finance department has also undertaken a financial modelling exercise to compare the current position to a number of options for the future of the Technopark site in a cash flow form over a period of 40 years.

Aside from the financial business case for options, other non economic factors and benefits have been considered such as the potential to support regeneration and address pupil place need.

Reasons for decision

The Technopark site is an onerous asset with a significant and ongoing annual net cost to the Council.   Even with improved lettings and occupancy levels it is expected that the site will remain a financial liability due to lack of demand for office/ employment use. 

Expert advice, as to how best to exit the lease and management arrangement with the Head Leaseholder, has been sought which has recommended that the Council look to purchase the Head Leasehold interest in the Technopark site to secure control of the site and be able to consider and implement alternative options for the future of the site in order to reduce or remove the asset as a financial liability.  

The Head Leaseholder has been approached and has indicated they are willing to consider an offer for the Council to purchase their interest.  Our advisors have indicated that this opportunity may not arise again in the short term and if the Council wishes to secure control of the site they should act now.

The Education Funding Agency has identified the Technopark site as preferred for the provision of a new Harris Federation all through school.  Should Harris not open a new school on the Technopark site or in the Tottenham Hale area, the Authority will have to consider alternative options to meet future pupil place demand in the area.  This could result in the land acquisition and/or construction costs sitting with the Council to fund.

The opportunity has therefore arisen for the Council to purchase the Head Leaseholder interest to secure control of the Technopark site and then sell the freehold for Technopark to Harris Federation for the conversion to an all through free school.  Financial modelling confirms that this option represents a financially better option than a do-nothing scenario whilst also securing an attractive educational offer for Tottenham which addresses the pupil place demand in the Tottenham Hale area and alleviates the Authority of potential land acquisition and/or construction costs in the short term for the provision of a new or expanded school in this area of the borough.