Minutes:
The Chief Executive submitted a report to seek Council approval to acquire the Head Leasehold interest in the Pavements Shopping Centre, and to delegate authority for the Chief Executive, in consultation with the Leader of the Council and the Cabinet Member for Economic Growth, to finalise terms and complete the acquisition.
The report explained the background to the current ownership and lease arrangements for the Pavements Shopping Centre, with Chesterfield Borough Council being the freeholder and Formcrest Construction Ltd. being the head leaseholder, with an underlease back to Chesterfield Borough Council. The Council then leased individual units directly to tenants (by way of occupational sub-tenancies), managed the centre and collected the rents and service charges from tenants, receiving a proportion of the rental income.
The report detailed the impact on the net income position of declining market rents in recent years and an increasing number of vacant units. This had been compounded by the Covid-19 pandemic.
The Council had obtained specialist expert advice from property investment advisors, Thomas Lister.
The report outlined the reasons for concluding that the preferred option would be for the Council to seek to acquire the Head Leasehold interest. This would enable the Council to take full control of a high-profile strategic town centre asset. The Pavements Shopping Centre’s future development potential was considered to be a fundamental component of the Council’s Growth Strategy and Covid-19 Economic Recovery Plan and complementary to the steps the Council was already taking in delivering the Northern Gateway and Revitalising the Heart of Chesterfield schemes.
The report detailed the financial considerations of the preferred option, taking account of professional advice from the Council’s treasury management advisers, and referring to the implications for the Council’s Treasury Management Prudential Indicators. The report also detailed the legal and risk management considerations of the preferred option and implications in respect of community wellbeing, economy and skills, climate change and equality and diversity.
RESOLVED –
1. That the acquisition of the Head Leasehold interest in the Pavements Shopping Centre be approved in order to protect the Council’s financial position and secure the Centre’s future as a strategic town centre asset.
2. That delegated authority be granted to the Chief Executive, in consultation with the Leader of the Council and the Cabinet Member for Economic Growth, to finalise terms and complete the acquisition of the Head Leasehold interest.