Agenda item

Report of Director (Bicester)

Purpose of report

To update on the negotiations with MOD on the potential acquisition of Graven Hill and the options for developing the site.

Recommendations

The meeting is recommended:

1.1         To approve the business case for the acquisition of Graven Hill (subject to due diligence being completed) in order to enable the development of the UKs first large scale self build housing scheme (Appendix 2).

1.2         To note the synergies between the Eco Bicester One Shared Vision and the vision for a Graven Hill community that includes a low carbon energy strategy, improved health and wellbeing outcomes, and community led leisure outcomes that include public access to properly managed 38.5 hectare community woodland.

1.3         To note the potential of delivering the Graven Hill vision to create 2000 new jobs including apprenticeships.

1.4         To approve the acquisition of Graven Hill (Appendix 1) at the agreed purchase price detailed in Appendix 2 and add the scheme to the Council`s capital programme.

1.5         To approve the use of internal capital resources to meet the payments due at exchange and completion of contract.

1.6         To approve the use of borrowing to fund the phased payments for Phase 1 and Phase 2 of the site acquisition as detailed in Appendix 1 and 4.

1.7         To endorse the setup of a “Graven Hill Equalisation reserve” to minimise the borrowing impact on the Council`s net revenue budget as stated in Appendix 4.

1.8         To request a further report at the June 2014 meeting of the Executive , setting out the business case for the governance model for the delivery of the site and proposed legal structure to facilitate  the Council`s role as “strategic developer”

1.9         To approve the appointment of EC Harris as lead consultant (supported by sub consultants) to continue to provide technical support with the pre-development work necessary to support the acquisition which is wholly funded through the capacity grant as set out in Para 3.8.

Resolved

(1)          That the business case for the acquisition of Graven Hill (subject to due diligence being completed) in order to enable the development of the UKs first large scale self build housing scheme (exempt annex to the minutes as set out in the Minute Book) be approved.

(2)          That the synergies between the Eco Bicester One Shared Vision and the vision for a Graven Hill community that includes a low carbon energy strategy, improved health and wellbeing outcomes, and community led leisure outcomes that include public access to properly managed 38.5 hectare community woodland be noted.

(3)          That the potential of delivering the Graven Hill vision to create 2000 new jobs including apprenticeships be noted.

(4)          That the acquisition of Graven Hill (annex to the minutes as set out in the Minute Book) at the agreed purchase price detailed in the exempt annex to the minutes (as set out in the Minute Book) be approved and that the scheme be added to the Council`s capital programme.

(5)          That the use of internal capital resources to meet the payments due at exchange and completion of contract be approved.

(6)          That the use of borrowing to fund the phased payments for Phase 1 and Phase 2 of the site acquisition as detailed in the exempt annex to the minutes (as set out in the Minute Book) be approved.

(7)          That the setup of a “Graven Hill Equalisation reserve” to minimise the borrowing impact on the Council`s net revenue budget as stated in exempt annex to the minutes (as set out in the Minute Book) be endorsed.

(8)          That officers be requested to submit a further report to the June 2014 meeting of the Executive, setting out the business case for the governance model for the delivery of the site and proposed legal structure to facilitate  the Council`s role as “strategic developer”

(9)          That the appointment of EC Harris as lead consultant (supported by sub consultants) to continue to provide technical support with the pre-development work necessary to support the acquisition which is wholly funded through the CLG capacity grant be approved.

(10)       That officers be requested to arrange a site visit for Executive members and Group Leaders to the Graven Hill site.  

The Director (Bicester) submitted a report which provided an update on the negotiations with the MOD on the potential acquisition of Graven Hill and the options for developing the site.

The Executive thanked officers for their hard work and the DCLG for their support for their project.

In response to Members’ comments, the Leader confirmed that committing to this project would not prevent CDC committing to other projects across the district

Resolved

(1)          That the business case for the acquisition of Graven Hill (subject to due diligence being completed) in order to enable the development of the UKs first large scale self build housing scheme (exempt annex to the minutes as set out in the Minute Book) be approved.

(2)          That the synergies between the Eco Bicester One Shared Vision and the vision for a Graven Hill community that includes a low carbon energy strategy, improved health and wellbeing outcomes, and community led leisure outcomes that include public access to properly managed 38.5 hectare community woodland be noted.

(3)          That the potential of delivering the Graven Hill vision to create 2000 new jobs including apprenticeships be noted.

(4)          That the acquisition of Graven Hill (annex to the minutes as set out in the Minute Book) at the agreed purchase price detailed in the exempt annex to the minutes (as set out in the Minute Book) be approved and that the scheme be added to the Council`s capital programme.

(5)          That the use of internal capital resources to meet the payments due at exchange and completion of contract be approved.

(6)          That the use of borrowing to fund the phased payments for Phase 1 and Phase 2 of the site acquisition as detailed in the exempt annex to the minutes (as set out in the Minute Book) be approved.

(7)          That the setup of a “Graven Hill Equalisation reserve” to minimise the borrowing impact on the Council`s net revenue budget as stated in exempt annex to the minutes (as set out in the Minute Book) be endorsed.

(8)          That officers be requested to submit a further report to the June 2014 meeting of the Executive, setting out the business case for the governance model for the delivery of the site and proposed legal structure to facilitate  the Council`s role as “strategic developer”

(9)          That the appointment of EC Harris as lead consultant (supported by sub consultants) to continue to provide technical support with the pre-development work necessary to support the acquisition which is wholly funded through the CLG capacity grant be approved.

(10)       That officers be requested to arrange a site visit for Executive members and Group Leaders to the Graven Hill site. 

Reasons

The business case sets out why officers are recommending that the Council acquires Graven Hill. It is likely that this is a ‘once in a lifetime’ opportunity for the Council to make an investment with this level of financial return and deliver such far reaching social and economic outcomes for local people. All development carries risk and this proposal brings with it the requirement for significant investment from the council. The financial return on investment speaks for itself in the business case. This financial return on investment will put the council in a much stronger position in the future and the return can be invested into other opportunities across the district. The return on investment is of course more than just financial. The vision for Graven Hill has an opportunity to deliver far reaching social and economic outcomes that are unlikely to be delivered to the same extent or within the same timescales if led by a private sector developer.

Therefore the recommendation of this report is for the Council to acquire Graven Hill in order to gain control of the land to realise the full potential this vision has to offer.

Options

Due to the Statement of Intent, there are really only two options available to the Council: to acquire the site or not to acquire the site. A ‘compromise’ of say the council acquiring with another organisation would require the site to be advertised on the open market which would trigger an updated valuation. This is because the Statement of Intent signed in 2013 related to an off-market sale to Cherwell District Council, further reinforced by Crichel Down rules mean that this can only be to the Council as it has Compulsory Purchase Powers.

Option 1: The recommended option is for the council to acquire Graven Hill.

Option 2: The alternative option is that the Council can choose to not acquire Graven Hill. As set out in section 6.1 this is possible but not recommended as this will be a missed opportunity and risks yet another site securing planning permission with a long time before homes are actually built.