Agenda item

Report of the Corporate Director (Regeneration) to follow. 

(Cabinet Member with Special Responsibility Councillor Abbott Bryning)

(It was noted that Councillors Roger Mace and Abbott Bryning had declared personal interests with regard to this item).

The Corporate Director (Regeneration) submitted a report that considered providing additional funding to proceed with the refurbishment of Storey Institute into a Centre for Creative Industries as part of the Lancaster and Morecambe Economic Development Zone, together with resolution of associated operational matters.

The options analysis including risk assessment, were set out fully in the report. The options were set out as follows:

(1)         Do nothing – Abandon the project and continue to operate Storey Institute as at present.

(2)         Abandon the project and attempt to sell the building to a private sector investor/developer.

(3)         Affirm the decision of October 2006 but increase council capital contribution by £200k and implement the scheme within acceptable quality and risk thresholds.

The Officer Preferred Option was Option 3. 

It was moved by Councillor Roger Mace and seconded by Councillor Jon Barry:-

“That the recommendations, set out in the report, be approved, subject to the following amendments:

That recommendation (1) be amended to read:

That Members note that design work was completed in March and all stakeholders agree that the project provides a viable proposition even under a minimum specification. 

Insertion of the words “prudential borrowing” after the word “project” and prior to the word “and” in recommendation 2(i).

Deletion of recommendation (3) and the insertion of:

Should Council agree to provide further Capital support that the budget of £3.298M be set as a maximum sum for delivery of the agreed specification and that any amount recovered from Lancashire County Council as Highways Authority and any contractual savings that may result from the partnering process either through savings against the tender price or contingency remain with the Capital Programme for determination by Cabinet at a future date.” 

By way of amendment it was moved by Councillor Jon Barry and accepted as a friendly amendment by the mover and seconder of the original proposition: -

“(1)      That public access is maintained to the garden and that this be put in the lease.

(2)        That Star Chamber reviews the Capital Programme as soon as possible.” 

Members then voted as follows on the proposition, as amended.

Resolved unanimously:

(1)         That Members note that design work was completed in March and all stakeholders agree that the project provides a viable proposition even under a minimum specification. 

(2)   That Council be recommended to allocate an additional £200,000 to the Storey project via prudential borrowing and that the Capital Programme be updated accordingly. 

(3)     That, subject to Council agreeing to the allocation of additional funds and confirmation that the project meets existing grant funding conditions, the contract to deliver the capital scheme be let in accordance with Conlon Construction’s tendered financial proposal. 

(4)     That income received from Luneside Studios for the licence to occupy space in the Storey Institute be ring fenced for year 1 start up costs incurred by Storey Ltd. 

(5)     That Members recognise the need to provide financial cover estimated at £25,000 per annum to assist with any year 1 and 2 revenue shortfall (should the need arise) and that an earmarked reserve be created accordingly, in line with Cabinet’s discretion to increase future years’ spending projections, as set out in the Medium Term Financial Strategy (MTFS). 

(6)     That Members agree the terms of the lease and service level agreements as included at Appendices 2 and 3 to the report, including the lease being at a peppercorn rent, as a basis for negotiation between the Council and Storey Ltd, subject to the lease including public access being maintained to the garden and agreement by the relevant Cabinet Member as an Individual Cabinet Member decision. 

(7)     That the Head of Financial Services be authorised to update the revenue budget for current and future years accordingly. 

(8)     Should Council agree to provide further capital support, that the budget of £3.298M be set as a maximum sum for delivery of the agreed specification and that any amounts recovered from Lancashire County Council as Highways Authority and any contractual savings that may result from the partnering process, either through savings against the tender price or contingency, remain with the Capital Programme for determination by Cabinet at a future date. 

(9)     That Star Chamber reviews the Capital Programme as soon as possible. 

Officers responsible for effecting the decision:

Corporate Director (Regeneration). 

Head of Financial Services.

Reason for making the decision:

The decision recommends to Council a secure sustainable, long term future for one of Lancaster’s key heritage assets.  The City Council will also be able to achieve the full range of economic development, employment and cultural development benefits arising from this project.  It will also maximise the financial viability of Storey Ltd and provides the best opportunity for creation of a viable business, avoids unsupportable quality/risk issues which would otherwise inevitable occur and resolves a serious highway issue.

The decision also enables Cabinet to be able to review the Capital Programme through the Star Chamber process. 

MINUTES PUBLISHED ON: THURSDAY, 7^th JUNE, 2007. 

EFFECTIVE DATE FOR IMPLEMENTING THE DECISIONS CONTAINED IN THESE MINUTES: FRIDAY, 15^TH JUNE, 2007.