Agenda item

The Cabinet is requested to consider the agenda report and its three appendices (the second and third of which are confidential Part II exempt* material and are printed on salmon-coloured paper for members and relevant officers only) and to make the resolution set out below:

(1)  That the offer submitted by the preferred bidder for the Grange disposal land be approved in principle, the details of which are set out in the confidential exempt appendix 2 to the agenda report.

(2)  That the Director Growth and Place be authorised, after consultation with the Cabinet Member for Growth and Place, to conclude a freehold sale, initially through a contract subject to planning, at not less than the figure stated in the confidential exempt appendix 2 to the agenda report.

*[Note Paragraph 3 (information relating to the financial or business affairs of any particular person (including the authority holding that information)) of Part I of Schedule 12A to the Local Government Act 1972]

RESOLVED

(1)  That the offer submitted by the preferred bidder for the Grange disposal land be approved in principle, the details of which are set out in the confidential exempt appendix 2 to the agenda report.

(2)  That the Director Growth and Place be authorised, after consultation with the Cabinet Member for Growth and Place, to conclude a freehold sale, initially through a contract subject to planning, at not less than the figure stated in the confidential exempt appendix 2 to the agenda report.

[Note As stated in minute 559, this item was considered at the end of the meeting after agenda item 14 but is recorded here in accordance with the published order of business]

The Cabinet received and considered the agenda report and its three appendices in the agenda supplement, the second and third of which were confidential exempt material and circulated to members and officers only.

This item was presented by Mr Dignum.

Mrs Hotchkiss and Mrs McKay were in attendance for this matter.

Mr Dignum commented as follows:

In 2015 CDC invested over £6.7 m into the new Grange sports facility in Midhurst. At the same time it was hopeful that a well-known retail brand, namely Waitrose, would like to take on the area of land on which the original sports facility stood.  The local community was particularly keen on such an outcome as it would naturally promote Midhurst into a more substantial retail centre.  The current grocery shops were Budgens, Tesco Express, two garages with retail facilities, the Cowdray shop complex and an independent baker and butcher. Clearly the arrival of Waitrose would have increased the range of options for local residents, particularly those with limited transport means.

The site of the former Grange leisure facilities had been marketed three times:

·       In 2015 on the completion of the new Leisure Centre and Library facilities. A proposed purchaser was identified, Kimberley Developments working with Waitrose, but sadly the retail economic climate turned downward very quickly in late 2015 at the wrong moment. As a result Kimberley acting for Waitrose withdrew. Waitrose scrapped plans to open new stores anywhere in the UK in September 2016 and had since then even announced some store closures.

·       The site was remarketed in 2016. However this exercise was terminated by the Cabinet in November 2016 as none of the offers presented was adequate.

·       The site was recently re-marketed extensively yet again and all options considered on an ‘open ended’ basis, including going back to previously interested parties which had expressed an interest in the site.A large retail outlet had always been the preferred option but given the economic challenges facing the food industry CDC had to consider a range of other uses, which included offices, start-up accommodation, non-food retail, residential property, sheltered housing and care home facilities.

Thirteen offers had been received: ten were for residential, of which two were for retirement homes; one was for a food store; and one was for either residential or retail depending on planning. The remaining offer was for a care home. There had been no interest submitted for new office accommodation. This was a strong indicator that there was no current demand. Indeed recently some office accommodation in the town had been converted to residential units. As for retail, the industry was clearly going through a difficult phase for an as yet indeterminate period. In contrast a care home would provide much-needed facilities in the area with an ageing population and increasing demand for care. The over-85s in England needing 24-hour care were increasing every year and were expected to double by 2035. The over-65s needing care would increase by only a little less, by 86%.

Conscious of its need to generate best value for the community as a whole, CDC officers had concluded that a care home was the most viable long-term solution.  There could be no doubt at present that the commercial value to CDC of a modern care home was significantly greater than all the alternatives, would meet a genuine community need and offer good local employment opportunities with the potential for over 60 jobs being created.  

There was general acceptance that care homes needed to be of significant size to be economically viable. There was also a trend towards residents preferring modern purpose-built facilities rather than converted period properties. Officers therefore expected the new accommodation to bring substantial benefit to older residents wishing to live in the centre of Midhurst. The care home would provide wider benefits for local business, as local employees or visitors would shop locally and many care homes also organised visits to their premises by local hairdressers, chiropodists etc for the residents.

CDC was committed to helping Midhurst with its ongoing Vision activities and seeking innovative ways to improve the town’s sense of place and its attractiveness as a visitor destination. CDC welcomed the South Downs National Park headquarters, the growing Cowdray Estate activities and a multitude of smaller projects. It remained committed to the development of Midhurst as a delightful rural town in a beautiful Downs-land setting.

There were four options presented by officers and residents:

(1)  Some residents sought the selection of a food retailer. However after three marketing efforts no financially acceptable retail bid had emerged. CDC was bound by statute in that the disposal of land by CDC had to accord with section 123 of the Local Government Act 1972 (LGA 1972), whereby ‘a Council shall not dispose of land …for a consideration less than the best.’

(2)  Some residents suggested selecting housing for the site. The residential bids CDC had received had all failed the legal best value test.

(3)  The Cabinet could reject all the bids and go through a consultation exercise with residents followed by a remarketing exercise. It had to be questioned whether it would be likely after a consultation that residents would suggest anything other than the ideas they had already submitted ie housing, retail, a swimming pool or an enterprise hub. The result of a fourth marketing exercise undertaken in the future could not be predicted.

(4)  The Cabinet could accept the officers’ recommendation for a care home as offering best value. If it chose this option it would inevitably cause disappointment to some but in laying out the options it was hoped that residents would see that there was no simple solution which could satisfy every consideration.

Mrs Hotchkiss commented on the outcome of the latest marketing exercise, which had attracted more interest than the previous one in 2016, and emphasised that the recommendation reflected the legal duty to obtain best value for the sale of real property. This was a land disposal issue and the development proposal would be subject to obtaining planning consent.

Mrs McKay endorsed Mrs Hotchkiss: the offer by the preferred bidder would be subject to contract and planning permission.

Mr Dignum invited at their prior request four CDC non-Cabinet members to address the Cabinet.

Mr S Morley (Midhurst) asked if the Cabinet believed it was currently in a position to make this decision which concerned the social and economic viability of Midhurst. The town needed a flagship retailer but there was little evidence in the papers that this had been fully researched eg by looking into whether part of the car park which was owned by CDC could be utilised to make the site more attractive to a retailer. Section 8 of the report showed that there were unresolved issues which needed to be addressed and more time should be allowed to do this and consider all the options thoroughly and ensure that the best possible opportunity for Midhurst was not lost. Moreover the site should be included in the Midhurst Vision. An innovative and inspirational approach should be adopted in place of choosing mediocrity. He suggested the formation of a member task and finish group to help achieve the optimal outcome. He had not received a briefing on the latest position and advocated a deferral to arrange a meeting with the people of Midhurst to discuss the best solution for the use of this site.

Mrs Hotchkiss and Mrs McKay responded to Mr Morley’s points. They said that the requisite evidence to make an informed decision was available and had been taken into account.  It had to be borne in mind that the land had been marketed on three occasions since 2014 and the outcome of that process reflected the reality of the market. Officers were well aware of local people’s views but there could be no gainsaying of the results of the latest open-ended marketing exercise. The issue here was land disposal and thereafter there would be work to do with the preferred bidder and it would be subject to contract and planning permission. Regard had to be paid to statute and state aid regulations. The reconfiguration of the car park to alter the layout of the site had been accepted by officers as a possibility. Officer had been working with the Midhurst Vision steering group in recent months on other matters and an action plan would be prepared.

Mr Shaxson (Harting) contended that there was insufficient information in the agenda papers to enable the Cabinet to reach a fully informed decision based on all the relevant facts eg it did not know enough about the scope for changing the shape and size of the development site area to make it more attractive to other types of use. The development of the site should take into account Midhurst’s wide hinterland. Best value should not be only for CDC but also Midhurst and its surrounding area.

In reply, Mrs McKay stated that interested parties had been made aware of the potential to alter the shape and size of the site to accommodate their development aspirations. 

Mr Moss (Fishbourne) said he spoke as a member from the south of Chichester District who wished to look at what was right for the District as a whole. He understood the constraints and rules but nevertheless he had hoped to have seen and wished now to see more work being done in the community to ascertain what it would like to happen and the best long-term solution for Midhurst, its surrounding area and Chichester District as a whole. He felt that there was a clear need for more discreet soundings of the community, the Vision steering group, the CDC local members (who had not been as involved as they should have been) and Midhurst Town Council.

Mrs Hotchkiss emphasised in reply the work which had been and would continue to be done with the Midhurst Vision steering group.

Dr K O’Kelly (Rogate) said that the Cabinet was faced with a very important matter and needed more time to make an informed decision. She addressed three points: engagement with the community; exploring all options; and the viability of having a care home in the town. There was significant disappointment across the community at the lack of engagement. The Midhurst Vision steering group was doing considerable work and would be producing a report in spring 2019. It was vital for CDC to bring the community with it. There were many different ideas for how the land could and should be used and all options needed to be explored carefully eg the case for an enterprise hub in view of West Sussex County Council’s (WSCC) decision to locate its Gigabit project in the Grange. The care home option gave rise to real reservations about the setting, space and especially staffing - it was likely that most staff would travel from the coastal strip and the feasibility of that had to be questioned.

In reply, Mrs Hotchkiss pointed out that (a) the Gigabit project was WSCC’s responsibility and local businesses would have the opportunity to link into it and (b) the current evidence was that there was limited business demand in the town with voids in the local commercial sector and the conversion of business sites into residential use, but this could change if Gigabit were available.

Mrs Shepherd acknowledged the views and concerns of the ward and local members, which were fully understood. CDC was required to adhere to its legal obligations. It was always intended that the cost of the redevelopment of the Grange site would be offset by the capital receipt of the disposal of the land the subject of this item. The issue before the Cabinet now was land disposal and not planning considerations. CDC had to comply with state aid regulations and secure best value for the land disposal, acting in CDC’s best interests; public money could not in effect be used to subsidise the private sector acquiring the land to fulfil local expectations or wishes however understandable. There was no evidence to support the use of the site for an enterprise centre. There was a significant risk of CDC losing credibility as a vendor if it delayed further when it had a preferred bidder and sought to remarket later.

Mr Bennett gave the Cabinet legal advice with respect to s 123 LGA 1972 and the terms of a 2003 government circular as to (a) the time of valuation and (b) the need for a direct policy reason (which did not apply in CDC’s case) for departing from the obligation to dispose of surplus land at best value eg a provision in a masterplan. The state aid regulations prohibited CDC from acting in an anti-competitive way.

During the Cabinet’s debate some members acknowledged that this was a challenging decision to make having regard to the views of the local community as expressed in e-mails and during public question time earlier in this meeting and also the representations made by local members. Members had considerable sympathy with those concerns and opinions. However they were ultimately persuaded to support the recommendation because of the legal duty on local authorities to achieve best value and the remarketing exercises which confirmed for example the evidence of the current state of the retail sector. To delay the proposed sale in order to repeat the tender process was likely to result in the same outcome and so could not be justified. The risk of damage to CDC’s credibility by a fourth remarketing exercise could not be ignored. The reality was that there was no viable alternative to the preferred tender. Although the local community might be disappointed about the proposed land disposal, the proceeds of sale could be used by CDC to benefit Chichester District as whole and that important fact should not be overlooked. Although local people contended that there was no need for another care home in the town, it had to be assumed that the bidder had duly considered the economic efficacy of its proposal and concluded that it was viable. The public could make representations during the planning process in due course.

Mr Dignum summarised the foregoing contributions and the debate. He expressed his pleasure at the progress being made with the Visions for Selsey, Petworth, Midhurst and Chichester. He said that the Midhurst community’s aspirations could and (for legal reasons) would have to be met in other ways such as the local Vision project. He intimated therefore his intention to seek an increase in the 2019-2020 budget for the four Visions from the current £50,000 to £150,000.

Decision

The Cabinet voted unanimously on a show of hands to make the resolutions below. 

RESOLVED

(1)  That the offer submitted by the preferred bidder for the Grange disposal land be approved in principle, the details of which are set out in the confidential exempt appendix 2 to the agenda report.

(2)  That the Director Growth and Place be authorised, after consultation with the Cabinet Member for Growth and Place, to conclude a freehold sale, initially through a contract subject to planning, at not less than the figure stated in the confidential exempt appendix 2 to the agenda report.