Decision details

Grant of long lease at less than market value under Community asset Transfer policy

The Cabinet Members agree that:

-The Chief Property Officer be authorised to enter into an agreement for lease leading to grant of a lease based on the agreed heads of terms.

-The Council finance a scheme of refurbishment of the existing building to an agreed specification, for a maximum investment of £100,000.

- On completion of the works, Genesis will take the lease and be committed to invest a minimum of £60k capital in fitting out the building to operate their charitable organisation.

 -The lease reserves a market rent, which is abated to nil subject to the tenant satisfying the landlord that it uses the property only for appropriate purposes in line with its constitution and charitable aims and with the Council having an option for the return of the asset at nil consideration should this use not continue.

- The lease imposes restrictions ensuring that the premises can only be used for the charitable purposes set out in the tenant’s constitution.

 -Prior to the lease being granted, Council officers are satisfied that the tenant has in place a constitution that is robust and sufficient.

 -The tenant has a break option every 5 years. If this option is exercised there will be no reimbursement of costs to Genesis for the value of their investment.

At its meeting of 19th February 2013 Council resolved to note the approach to Community Assets as set out and support the progression of transfers to the organisations identified. It was agreed that a number of potential organisations be identified to be taken forward and Genesis Trust was one of those listed.

The application of this policy is in line with guidance to Local Authorities on asset transfers. The idea is to help secure community benefits in line with Council priorities and objectives by transferring property at a peppercorn rental, in exchange for arrangements designed to secure community benefits in line with Council objectives.

As there are no current delegations in place to officers it is necessary to give specific authority to enter into this transaction.

The proposals give a structure which can demonstrate the audit trail that led to the grant of a leasehold disposal at less than market value.

None. This proposal is in accordance with the approved policy of community asset transfers in relation to one of the subject organisations identified as a “Quick Win”.