Decision details

The Assistant Director – Economic Growth submitted a report seeking approval for the Council to purchase land at Chesterfield Waterside and enter into a development agreement to fund the construction of a commercial office building and associated public realm works.

The Council’s Growth Strategy (2019-2023) had identified Chesterfield Waterside as a key regeneration project for the town and borough. The Council had helped Chesterfield Waterside Limited to secure funding from the Sheffield City Region Infrastructure Fund (SCRIF), which had enabled the delivery of site infrastructure ahead of the planned development of Phase 1 which would include a Grade A office building. The SCRIF funding agreement mandated that the office building must be completed by no later than 31 March, 2021, making progression of the office development a high priority in order to avoid Sheffield City Region Local Enterprise Partnership seeking to claw-back the funding.

Chesterfield Waterside Limited had actively marketed the office building to end users and had received strong interest with two pre-lets already agreed. The Council had appointed a consultant to provide advice on options for the delivery of the office building with a particular emphasis on providing an investment opportunity for the Council to support its revenue position in future years. The consultants had identified that the best option for the Council was to forward purchase the land and enter into a development agreement with Chesterfield Waterside for the construction of the office building and associated public realm works; this would generate income for the Council with the added control of the Council being the freehold owner.

The report outlined the financial considerations and recommended an additional allocation of £7.76m to the Council’s capital programme. A cost appraisal was included in the report which projected that the office building would generate a revenue surplus from year two even allowing for the office building remaining only 50% let.

Details of legal, governance and information assurance considerations were included in the report along with details of measures proposed to ensure the office development supports the Council’s emerging climate change action plan.

*RESOLVED –

1.   That the Chief Executive, in consultation with the Cabinet Member for Economic Growth, be granted delegated authority to purchase the relevant land at Chesterfield Waterside and to simultaneously enter into a development agreement with Chesterfield Waterside Ltd. to fund the construction of a commercial office building to an agreed programme and specification, and to deliver the public realm works.

2.   That the purchase be subject to the completion of satisfactory due diligence and in line with the proposed Heads of Terms, as attached at Appendix 1 of the officer’s report.

3.   That £7.76m of capital spend, to be funded from borrowing, be included in the Council’s capital programme for 2020/21.

REASON FOR DECISIONS

To ensure that this element of the Chesterfield Waterside scheme can progress to a timescale that mitigates the risk of Sheffield City Region Infrastructure Investment Fund claw-back of grant. The Council forward purchasing the office building also delivers on one of the Council’s key objectives to promote and enable Chesterfield Waterside. In addition, the proposals represent a positive commercial opportunity for the Council.