Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: Yes
The Cabinet received a report of the Director of Planning and Property that sought Cabinet approval to progress proposals to convert the Council owned site at Station Road from its current use as commercial offices to the use of affordable rented housing and potentially ground floor office accommodation.
The Council has key corporate aims to meet housing needs in the Borough and make efficient use of its assets. The property on Station Road is currently vacant and provides an excellent opportunity for conversion to meet housing need. The Council currently retains significant commuted sums that can be used towards providing affordable housing. This proposal is an excellent opportunity to provide such accommodation which the market is not delivering.
The Council would enter into a legal agreement with Methodist Action NW for them to manage the property. Methodist Action NW are a housing charity managing over 300 properties across Lancashire and are keen to develop in the South Ribble area and work with the Council more widely in the future. The organisation does a lot of additional work with its residents like forming residents groups and the Cabinet felt that they would be a good partner to work with.
The property had been recently subject to a flood that had caused extensive damage to the property. A small amount of the refurbishment costs could be attributed to these repairs, however the Council were speaking with their insurers regarding this matter and the Director of Planning and Property explained that the full details of the refurbishment costs could be provided upon request.
In response to a question about tenancy criteria and selection, it was explained that the housing would be Social Rental property and available for people in receipt of benefits. The Cabinet thought that it was important for the Council to distinguish the difference between affordable housing and social rental housing in its reports going forwards.
Decision made (Unanimously)
1. Cabinet approves the Capital expenditure of up to £582,965 to refurbish the property at Station Road and convert flats with office accommodation at ground floor.
2. Approval to invite tenders for the works for the refurbishment and conversion to the property and to subsequently appoint a contractor to undertake the works.
3. Approval to enter into a legal agreement/contract with Methodist Action NW for them to manage the property at a cost of 25% with an initial lease term of seven years, with an option to extend the lease.
Reason(s) for the Decision:
The building on Station Road has been previously rented out as a commercial property, although it has remained vacant since 2016 whilst being actively marketed to let. The property has recently been subject to a flood which has caused extensive damage and rendered it unusable.
Consequently potential options have been explored to ensure the financial and/or social value of the asset is maximised. The preferred option of converting to residential would enable us to meet key corporate aspirations for housing.
Alternative Options Considered and Rejected:
Dispose of the building at auction or open market. This option would realise a capital receipt and eliminate on-going revenue liabilities associated with management and maintenance of an asset which is considered not fit for purpose and does not represent an acceptable return as an investment property. It would however not support delivery of affordable housing nor utilise the commuted sums fund.
Refurbish the existing building and continue to market it as a commercial letting. This option is not recommended as the costs of refurbishment are considered to outweigh the income it would generate.
Report author: Catherine Conroy
Publication date: 18/10/2018
Date of decision: 17/10/2018
Decided at meeting: 17/10/2018 - Cabinet
Effective from: 26/10/2018