Agenda item

The report sought approval to enter into an agreement for lease with Healthlink Investments Ltd for a unit at the prospective Welbourne development at Tottenham Hale in order to realise the Welbourne Health Centre.

The Leader noted that the agreement with Argent Related contained an obligation for them to deliver a health care facility to shell and core specification, of 1,500 square metres, with the Council taking a long lease back for this health care unit, subject to a further key decision on the financial and operational arrangements for the health centre. 

The report now sought this key decision in order to secure the health centre.  Because the financial and operational details of the Health Centre had now been resolved, it was proposed that the Council dispose of a long lease to HealthLink, the third party developer appointed by the GP practice.  HealthLink would fit out the health centre once Argent Related had completed the building and have leased the unit back to the Council.  The terms of the disposal to HealthLink would be as set out in the agreed Heads of Terms, as referred to in Annex C of this report.

The CCG required a commitment from the Council to support the preliminary approval in order to secure the funding of the proposed health centre. Full business approval would be needed after planning consent was granted for the development scheme to be put forward by Argent Related, which was estimated for later in 2018.  It was proposed that the Council agree now to dispose of the property based on a long lease to HealthLink Investments Ltd, appointed by the CCG to fit out the health centre, as per the Heads of Terms as referred to in Annex C of this report.

In response to questions from Cllr Brabazon and Cllr Connor, the following was noted.

·         Argent Related had the responsibility for providing a health centre, regardless of the type of regeneration scheme being taken forward.

·         Noted that the disposal of the lease would be for a term of 125 years for the premium set out in and based on the agreed Heads of Terms attached in Annex C of this report. Therefore, the council would be obtaining a premium receipt for the lease and HealthLink Investments Ltd would be funding the fit out of the new health centre.

·         It was not yet known what the range of health facilities expected to be provided form the new health centre would be. Agreed that Cllr Connor is provided with an update on when this decision is due to be made by the CCG and Health and Wellbeing board.

Further to considering private information at item 8,

RESOLVED

1.    To approve the disposal to HealthLink Investments Limited of the new health facility unit (outlined in red in the plan in Appendix A2) to be built by TH Ferry Island Limited Partnership under the Development Agreement dated 21 March 2017 on the Welbourne Centre site in Tottenham Hale subject to the Lease back to the Council; and

2.    That the disposal shall be a lease for a term of 125 years for the premium set out in  and based on the agreed Heads of Terms attached  in Annex C of this report; and

3.    To give delegated authority to the Strategic Director Regeneration Planning and Development after consultation with the Assistant Director of Corporate Governance to agree the  final terms of  the lease.

Reasons for decision

On 21 March 2017, the Council entered into a Strategic Development Partnership (SDP) agreement with  TH Ferry Island Limited Partnership (an Argent Related entity). The agreement contains an obligation for the developer to deliver a health care facility to shell and core standard.  In November 2016, Haringey CCG was awarded over £11m capital from the capital funding from the NHS Estate and Technology Transformation Fund (ETTF), made available through the Department of Health, in order to support the development of three primary care premises in the east of Haringey (Wood Green, Green Lanes and Tottenham Hale). 

One of these three premises is the proposed new Welbourne Centre facility at Tottenham Hale.  The CCG resolved to use this funding to engage a third party developer to fit out the new health centre, commissioned by a GP practice selected through a competitive procurement process, as detailed below. 

Alternative options considered

Do Nothing – The Council could decide not to dispose of the long lease at the Welbourne site to HealthLink, or any other prospective third party developer or other body nominated by the CCG.  However, the decision to secure this shell and core facility has already been made under a previous Cabinet Report, and as such this arrangement has already been included in the Council’s Strategic Development Partnership (SDP) with Argent Related.  The value of the unit has already been foregone and the SDP Development Agreement stipulates that the space will be used as a health centre, so its value under alternative options are limited.  There are no other feasible options for operating a health centre from this facility without following the process recommended by the CCG and utilising the capital funding it is bidding for. 

Delay decision – There are risks in agreeing the proposed heads of terms for the lease as the proposal does not have planning granted currently and the design has not been finalised. This will create uncertainty and could delay the project.