Meeting documents

1 THE ISSUE

1.1 This report sets out the latest position regarding the future of the Recreation Ground following the submission of the Strategic Review Report to the Commission in June 2007. It deals with the application by the Trust Board for approval from the Commission to extend the lease for the temporary stand for one year.

2 RECOMMENDATION

2.1 The Trust Board to note the contents of this report.

3 FINANCIAL IMPLICATIONS

3.1 Rental income will be received from Bath Rugby.

4 THE REPORT

4.1 In a letter to the Chairman of the Board dated 25 June 2008 the Charity Commission has confirmed that it is willing to authorise the Trustees to enter into the proposed temporary lease with the Rugby Club for 2008/09 on the terms of the draft tenancy agreement submitted to the Commission by the Board as agreed at the Board meeting held on 9 April 2008. This decision has been made by the Commission on the basis that this lease is expedient in the interests of the Charity for the following reasons

a) Granting of the temporary lease is in the best interests of the Charity because a final resolution of the problem posed by the occupation of the Rec by the Rugby Club cannot realistically be achieved before the commencement of the next playing season;

b) The temporary stand represents the Charity's largest source of income accounting for some 75% of its total income. Without this income the Charity will effectively be insolvent and notwithstanding the moral obligations of the local authority, there are no financial ones to provide an alternative income stream;

c) Granting the lease has no adverse impact on implementing the Strategic Review outcome, whichever option is agreed with the Commission. At the time the decision was taken by the Trust Board it was expedient not only financially, but also strategically to ensure that none of the options considered within the Strategic Review were prejudicially affected. Not granting the lease would in effect remove 2 of 3 options as realistic outcomes from the Strategic Review;

d) Not granting the lease will make it far more difficult in negotiating a new lease on significantly more favourable terms to the Charity with the Rugby Club, particularly if the Charity's financial position is significantly weakened by the loss of income arising from the lease. As the Rugby Club have strongly indicated no intention of relinquishing the remaining 61 years of their main lease it seems tactically prudent to ensure that no obstacles prevent the Charity from implementing its preferred outcome from the Strategic Review;

e) A valuation assessment undertaken in April 2008 by an independent professional valuer stated that, "I consider the rent agreed to be the best rent achievable in the market place. Granting this new lease to Bath Rugby Club is in the best interests of the Trust."

has been provided by way of and subject to an order under s.26 of the Charities Act 1993 as amended by the Charities Act 2006. The making of this Order should not be taken as a confirmation or, indeed, an indication that the Commission is satisfied that `option two' is expedient in the interests of the charity. The Trustees (BANES) have identified the option in the strategic review to grant a lease of further additional land to Bath Rugby Club as the proposed final solution to the Rugby Club's continuing occupation of the Rec. The Commission has confirmed that it is not yet satisfied that the Charity had put forward any specific proposal that passes the legal test which would allow the Commission to make a legal Scheme to allow the lease. Consequently as was the case with the terms of the order dated 20 July 2007, this Order sets out a number of directions that the Commission will require the Trustees to comply with in order to ensure that a long term solution is reached to the current issues relating to the use of the Rec. This will include Banes' agreement to a timetable of any action the Commission considers is necessary from time to time to attain the final outcome, whenever this is decided.

4.3 In particular the Commission directs that:

• BANES provide to the Commission within a reasonable time-frame or such time-frame as the Commission shall direct from time to time such further explanations and further details of its proposals as the Commission shall require.
  
• In particular, BANES satisfy the Commission that it has acted in accordance with the following requirements in reaching such a decision:

i. To act within the powers conferred upon BANES and the established rules and procedures for dealing with issues of the kind under consideration

iv. Not to take into consideration any factors which it was not proper for it to take into account

vi. To act reasonably (i.e. the decision should be within the range of decisions which a reasonable body of trustees could have made)

8. BANES shall ensure that it will take no steps that will cause it or the Charity to create any legal obligations or responsibilities to any individual or entity without the prior consent of the Commission.

9. BANES will provide to the Commission the proposal for the future occupation and use of the Rec by 1 August 2008.

5 RISK MANAGEMENT

5.1 This report is for information. There are therefore no new or additional risks arising from it.

6 RATIONALE

6.1 This report is for information

7 OTHER OPTIONS CONSIDERED

7.1 None

8 ADVICE SOUGHT

8.1 The Trust's Independent Adviser, Senior Counsel (legal adviser) and Drivers Jonas (property advisers)