Minutes:
The Chair asked the General Manager – Mr Holder to give his verbal update to the meeting.
The General Manager – Mr Holder advised that he was tabling a letter from the Board’s Project Team legal advisers in respect of the negotiations with the Firoka Group in respect of the lease, and the letter outlined the current state of play.
The Chair felt that the Advisory Committee should consider the contents of the letter prior to the General Manager commencing his introduction. The Committee then took an approx. 10 minute break from 19:50HRS to 20:04HRS to consider the contents of the letter. Members drew the General Manager’s attention to the fact that on the very last page there appeared to be some text missing from their copies.
Mr Holder then read out the details of the missing text which were suitably annotated by those present.
In a succinct introduction Mr Holder advised that the Board of Trustees would consider the draft lease, draft project agreement and draft employment and pension agreement at its special meeting on 24th July 2006. Mr Holder advised that the recommendations in the brief overarching report to those documents were - that the board formally resolve to request from the Charity Commission an order under sec. 36 of the Charities Act allowing the lease to be granted and - that authority to settle any outstanding drafting issues be delegated to the General Manager.
Mr Holder advised that this was the last opportunity for the Advisory Committee to provide its advice to the Board prior to that formal consideration and resolution. Mr Holder stressed that there will, of course, be ample opportunity through subsequent processes for comment about the actual plans once these were completed by Firoka.
Mr Holder went on to state that the letter before the Advisory Committee was almost the same as the one being presented to the trustees as an interim report on 24 July., though the letter had been sanitised to the extent that commercially confidential information arising in the bid process had been removed. The content of the letter was consistent in all other respects. Mr Holder commented that the entire negotiations had been based on the complete footprint as attached to the statutory instrument providing the wider powers of leasing. The same footprint was also publicised throughout the Park following the resolution of the Board on 27 March 2006 to seek sec.36 (6) representations. Having received those representations the board considered them at its meeting on 4th July. The board resolved not to vary its previous resolution in respect of the total development footprint.
In taking the Committee through the letter’s contents Mr Holder highlighted that in essence it set out the current state of play. Mr Holder felt that it should be noted that all discussion and negotiation with Firoka had been on the basis of the concepts originally described and there had been no changes from those submitted. The letter also provided an explanation of the heads of terms and their purpose. It also referred to the lease document which would eventually become the prime document and the key terms contained therein were outlined in paragraph 2.2, and these should be particularly noted. Reference was also made to the project agreement which set out the obligations on Firoka to carry out the refurbishment. These terms and obligations were detailed in paragraph 2.3. Once the refurbishment was completed the need for the project agreement would cease. Mr Holder further stated that one of the key areas for consideration by the Board was that of risk associated with the project. A number of risk areas were identified and commented on in paragraph 3.1. In paragraph 3.2 there was comment on the sanctions available to the landlord for default in various circumstances. Mr Holder concluded that in paragraph 3.3 there was a general comment on the benefits to be derived from the transaction.
The Chair then asked, and Members gave their views as to the development proposals – as summarised below in consensus form.
N.B. This is a summary of lengthy and protracted discussions and is not a verbatim record of all comments expressed during the discussion.
· clarification that CUFOS was within the development footprint and that their lease would expire on 25 March 2011 and the decision of the Board not to vary its previous decision though as stated by Councillor Hare this was not a unanimous decision
· concerns expressed with regard to repairs to the fabric of the building, disposal to a third party , and the comments stated in relation to envisaged planning consents being granted. The General Manager responded that Firoka would be liable for the repairs/refurbishment which would commence from west to east and that whilst the building works were in progress the remaining parts of the building would have public access, and there would be on-going obligations on the Firoka Group. In terms of subsequent disposal of the lease the Firoka Group had rights to dispose of the lease but that it would be for the Trust as Landlord to agree on the third party to whom disposal would be allowed in any eventuality. With regard to comments on planning consents the views expressed by the local planning authority had been based on outline proposals from the Firoka Group and did not constitute any formal application in either outline or full form;
· Comment in respect of the deferred premium and the payments that would be received by the Trust from the Lessee, and also the profit share arrangements although these were regarded as commercially confidential;
· Clarification of exchange and completion being aimed for together on 1st October 2006 and the actually name of the Company name for the Firoka take over. The General Manager responded that a special purpose vehicle called Firoka (Alexandra Palace) Limited guaranteed by Firoka Kings Cross Limited had been created. In terms of the standing of the Firoka Group in financial circles it was well regarded and of good standing and repute
At this point in the proceedings Councillor Hare commenced asking points of clarification in terms of details of the lease which he was in receipt of as a member of the Board, in terms of parking, and rights of access, which had been sent to him as a member of the Board.
Following advice from the Clerk the Chair advised Councillor Hare that he was not a Member of this Committee and as a member of the Board such comment could be construed as a conflict of interest. The Chair advised that she understood that the Charity Commission had given a clear ruling on this issue some years previous. Whilst there was no reason why Councillor Hare could not observe the proceedings his line of questioning was not appropriate at these proceedings and such questions should be asked at the Board meeting on 24 July. Councillor Dobbie shared the views expressed by the Chair and reiterated that Councillor Hare would have the opportunity during the Board meeting to discuss the lease in detail and it was highly inappropriate to do so at this meeting.
Councillor Hare responded that in his view he did not have a conflict of interest, but that he would refrain from the line of questioning he had pursued.
· Clarification as to the future use of the TV studios and expressed concerns at the need to for the Board to actively engage, in conjunction with the Firoka Group, to ensure that this part of the building is developed with an external partner, and what would happen if this were not accomplished within 3 years as specified. The General Manager responded that the Firoka Group recognised the heritage of the studios and had undertaken to leave the space free for a 3 year period. The actual concept and development of the studios and identifying an external backer for the concept was not for the Board to consider. The BBC had shown interest in the concept and was attempting to generate a pan industry approach. However the BBC itself would not make any financial contribution but could be persuaded to take on the role of facilitators. The General Manager commented that a meeting had taken place the previous day with the BBC where they had again reinforced this view. There were also some serious practical difficulties to be overcome in developing the concept including access as currently the only access was via the offices located in the Tower. The use of the Victorian staircase, as identified as important by English Heritage, may also not be practical as it was now considered too steep and would be unlikely to comply with current health and safety rules.
· Clarification given in terms of adequate insurance cover and that the Trustees would ensure adequate cover and invoice the tenant immediately.
· Concerns in respect of assignment rights in the future and the response of the General Manager that it would be only for the Board of Trustees to agree to such.
· Concerns as to whether the newly appointed Alexandra Palace and Park Board was able to fully grasp the implications of and the enormity of the decisions it will be taking over the forthcoming months in respect of the future development of the asset
The Committee then discussed and expressed certain specific concerns for the Board to consider on 24 July 2006 as detailed:
· the need to ensure a full traffic impact assessment being carried out as part of the required planning process for the future development proposals of the Firoka Group.
· the concerns of the Committee that the Board may not take account of views expressed by the Advisory Committee and that the Board should be reminded of its duties to consult as set out in Schedule 1 - Part III of the Alexandra Park and Palace Act 1985 in respect of the functions of the Advisory Committee and the Board’s continuing legal obligations to ensure that the Advisory Committee continues to be consulted on those matters that the Board should refer to it within the auspices of the Act.. Further that the Board takes into account of any and all views and recommendations referred to it from the Advisory Committee both currently and following completion of current negotiations on the Heads of Terms, Lease and project agreement with the Firoka Group.
· that the Board should note and take account of the concerns of the Advisory Committee that, once the transfer of the asset to the Firoka Group has been completed, the role of the Advisory Committee in respect of its ability to comment and make recommendations will be diminished on the day to day matters of Palace Management that affect local residents and its influence “one step removed” from the operation than is currently the case.
· that in respect of the above the Board be asked to include a requirement to consult the Advisory Committee within the proposed lease currently being finalised with the Firoka Group e.g. Firoka ‘s Palace Management could be required under the lease to meet with the Advisory Committee on a regular basis, and that should this request not be acceded to then the Advisory Committee would consider making formal representations to the Charity Commission following referral of the draft heads of terms, lease and project agreement;
· that the Board be requested to note the concerns of the Advisory Committee in respect of the future development of the BBC studios; the fact that there had been no concrete evidence of potential financial backing by independent sources; and that the Board be requested to actively engage with any interested parties in an attempt to secure such financial backing for the preservation and development of the proposed interactive museum concept for the BBC Studios in preparation for future use following Firoka’s completion of the “shell and core” space.
Following the expression of views of the Committee the Chair then summarised and it was:
RESOLVED
That the Alexandra Palace and Park Board be requested to consider the following resolutions of the special meeting of the Alexandra Park and Palace Advisory Committee of 20 July 2006 on the Future Use of the Asset when considering this item at the special meeting of the Board on 24 July 2006 and take account of those matters prior to making its decision:
i. that the Board be reminded of its duties to consult as set out in Schedule 1 - Part III of the Alexandra Park and Palace Act 1985 in respect of the functions of the Advisory Committee and the Board’s continuing legal obligations to ensure that the Advisory Committee continues to be consulted on those matters that the Board should refer to it within the auspices of the Act. Further that it takes into account of any and all views and recommendations referred to it from the Advisory Committee both currently and following completion of current negotiations on the Heads of Terms, Lease and project agreement with the Firoka Group;
ii that the Board be requested to note and take account of the concerns of the Advisory Committee that, once the transfer of the asset to the Firoka Group has been completed, the role of the Advisory Committee in respect of its ability to comment and make recommendations will be diminished on the day to day matters of Palace Management that effect local residents and its influence “one step removed” from the operation than is currently the case;
iii. that in respect of (ii) above the Board be asked to include a requirement to consult the Advisory Committee within the proposed lease currently being finalised with the Firoka Group e.g. Firoka ‘s Palace Management could be required under the lease to meet with the Advisory Committee on a regular basis, and that should this request not be acceded to then the Advisory Committee would consider making formal representations to the Charity Commission following referral of the draft heads of terms, lease and project agreement ;
iv. that in respect of the future development of the asset, the Board be requested to ensure that a full traffic impact assessment be carried out as part of the required planning process for the future development proposals of the Firoka Group; and
v. that the Board be requested to note the concerns of the Advisory Committee in respect of the future development of the BBC studios; the fact that there had been no concrete evidence of potential financial backing by independent sources; and that the Board be requested to actively engage with any interested parties in an attempt to secure such financial backing for the preservation and development of the proposed interactive museum concept for the BBC Studios in preparation for future use following Firoka’s completion of the “shell and core” space.
There being no further business to discuss the meeting concluded at 21.40hrs.
Councillor Susan Oatway
Vice-Chair of the Advisory Committee