Decisions

The acquisition of a strategic site adjacent to Chesterfield railway station will support the Council to achieve its growth objectives and kick-start the delivery of the emerging HS2 Station Masterplan. The short-term availability of LEP grant funding allows the Council and its partners to work at a pace and scale which could not be supported by the Council’s own resources.

Cabinet Minute No. 116 (19/20):

“That the Executive Director, in consultation with the Cabinet Member for Economic Growth, be granted delegated authority to continue to negotiate the details of the heads of terms, in line with the due diligence advice, and, subject to satisfactory agreement, enter into a conditional contract leading to the acquisition and leasing of the specified land.”

1. That the proposed changes to the terms of the agreement that have been negotiated through the due diligence and further detailed negotiation process be noted.

2. That the Council enter into an unconditional contract leading to the acquisition and leasing of the specified land on the terms outlined in the former Cabinet report and briefing paper.

In September 2019 Finance and Performance Board (FPB) considered the purchase of five new build properties at Houldsworth Drive, Hady. The first two semi-detached properties on the site were acquired following approval at FPB to purchase for £120,000 each.
As a new strategic acquisitions policy was being developed at the time FPB requested that a decision to purchase the remaining three properties (that were going to be built after the first two were completed) under this new policy.
The revised strategic acquisitions policy was adopted in October 2019 and the three, two bedroom properties are to be purchased at £115,000 each and are expected to be completed Summer 2021 under the strategic acquisitions policy.
The properties are a row of three two bedroom terraced properties.

To purchase three new build properties at Houldsworth Drive, Hady for £345,000 (£115,000 each) under the strategic acquisition policy to meet local housing need

Report presented to Finance and Performance Board to purchase a development of 5 properties at Houldsworth Drive as the acquisition was above the value thresholds in the Acquisitions Policy

Finance and Performance Board approved for the Housing Service to purchase a development of five new build two bedroom properties at Houldsworth Drive, Hady. The purchase will be split into the purchase of a pair of semi-detached properties for £240,000 in the financial year 2019/20 and an option to take up the purchase of a further 3 properties for £345,000 during financial year 2020/21.

3.0Background
3.1An offer has been made to for the development of five two bedroom houses at Houldsworth Drive, Hady to Frank Innes the estate agent acting on behalf of the developer. The bungalow to the side of the development is intended to be occupied by the developer.
3.2The developer was seeking £130,000 for the first two properties (the pair of semi-detached properties at the front) and either £120,000 or £125,000 for three properties at the rear.
3.3The site is currently under construction with the first two properties due to be completed in late October or early November 2019. The three town houses to the rear are not yet under construction. Their construction will begin once the two semi-detached properties are sold. The developer is anticipating their completion by August 2020.
3.4An offer of £585,000 for the five houses was made to and accepted by the developer. The offer was made up of £120,000 for the two semi-detached properties and £115,000 for each of the row of three town houses to the rear. Kier are instructed to draw up and negotiate the Heads of Terms documents for the purchase once Finance and Performance Board approve the purchase.
3.5The price agreed is over the limits within the current Strategic Acquisitions Policy as set out below:
•The owner has a large service charge/ major works debt they are unable to afford (Leasehold property only)
•The maximum price payable for a property will not exceed £90,000 (to increase by inflation (now approximately £96,000))
•That the value of property purchase and works required to bring the property up to a lettable standard does not exceed £95,000.
•If the property being considered does not meet one of these criteria, a report to Cabinet will be required to secure approval for the spend
3.6Finance and Performance Board therefore gave permission for the acquisition under the delegation:
Finance and Performance Board and Land Disposal Group
OFFICER DELEGATIONS: To the Chief Executive, an Executive Director or the Director of Finance and Resources:
G275D Notwithstanding any other delegations in Part 3, after consultation with members of the Finance and Performance Board to approve the acquisition and disposal of land of a value of up to or exceeding £250,000.

Alongside this report a new Acquisition Policy was considered. The purchase of the three properties to the rear will be considered under this revised policy and a further officer decision submitted.

Recommendation to show that the purchase of 2 properties is £240k (within delegation) and the option to purchase the other 3 will be after the new policy and will require Cabinet member approval