Report of the Executive Director (Place).
The Cabinet considered the report of the Executive Director – Place updating on the Southport Town Deal project, The Enterprise Arcade, and presenting the preferred option for progressing the commitment of Town Deal funding for the project. The report also included a summary of the business case for submission by the Council, as accountable body, to Government on behalf of the Southport Town Deal Board.
(1) the Business Case for this project be endorsed to go forward as part of the Town Deal investment package;
(2) authority be delegated to the Executive Director of Corporate Resources and Customer Services, in consultation with the Executive Director – Place, in consultation with the Cabinet Member - Regeneration and Skills, and, the Chair of the Southport Town Deal Board, the signing and returning of the Project Documentation to the Department for Levelling Up, Housing and Communities (DLUHC) in line with Town Deal funding deadlines, in order to trigger the release of funding and commence the project activity; and
(3) the Council be recommended to approve a supplementary capital estimate of £1.25m funded from the Town Deal.
Reasons for the Decision:
Under the Town Deal Heads of Terms, Sefton Council is required to submit businesses cases within 12 months of the offer (by March 2022).
The preferred option for Enterprise Arcade is set out in the business case and in the Design Feasibility RIBA Stage 2 Report which will allow for the provision of 898 m2 of improved floor space comprising of Crown Building* and 3 adjacent retail units on Eastbank Street, Southport.
(* the Dove Properties management suite is excluded from this initial phase 1 work but may be drawn into the proposed works subject to agreeing a release of this office with the current leaseholder).
Securing a Tenant who will act as an operating partner for the Enterprise Arcade will be integral to the long-term success of the project. Through agreeing a Property Lease, with embedded contractual obligations, the risks of ongoing financial liability for the operation and day-to-day costs of running the building will be transferred to the Tenant partner, meaning that there will be no ongoing financial burden to the Council relative to any operating costs. The Council will continue to have responsibility for the structural integrity of the building and associated services, and provision will be made in the lease agreement for a contribution to these costs from the lessee/operator. The freehold of the building will remain with the Council as will the long-term benefit of the Town Deal funding for improvements to the asset.
Alternative Options Considered and Rejected:
The RIBA Stage 2 report lists the alternative options considered in delivering Enterprise Arcade across 8 options differentiated by scale/levels of finish and associated cost.
The Do-Nothing option is rejected on the basis of not meeting the Core Objectives of the Project and output requirement committed within the Town Investment Plan and related Heads of Terms.
The preferred option delivers to the required level of outputs within the available budget and all associated Project Risks for this project at Design Stage 2 are addressed in the Stage 2 Design Feasibility Report.