To consider the above report

Members considered sale of the council’s freehold interest in Nicholson’s Shopping Centre and the freehold of the Central House office.

Councillor Dudley introduced the report. He explained that Nicholson’s shopping centre covered 4.5 acres in the middle of Maidenhead and had originally opened in 1964. In February 2019 Tikehau Capital, in partnership with Areli Real Estate, had acquired the shopping centre from the administrators. In March 2019 they had undertaken extensive public consultation on their proposals. In April 2019 Cabinet gave approval for Heads of Terms with Tikehau and Areli to form the basis of a development agreement including the re-provision of the town centre car park and redevelopment of the shopping centre. At the time the Cabinet report included a delegation to officers and himself as Leader of the Council to finalise the development agreement and commercial terms. However there had been some concern from Members about the breadth of that delegation therefore he had agreed to bring it to full Council. Extensive negotiations had been undertaken between the architect and the RBWM Property Company as detailed in the Part II appendices.

The Part I report detailed three elements relating to the transaction. The council owned 55% of the freehold of the shopping centre on a very long term lease. Over time the financial return to the council had reduced significantly. The projected income in the Medium Term Financial Plan was zero given the challenging nature of the retail environment.

Councillor Dudley explained that the second element related to Central House, which the council had acquired a few years previously. The building had a structural life of 40 years therefore it could not be refurbished as an office building. It was therefore proposed that it also be sold to Areli. Areli would then bring forward a comprehensive planning application. The transfer of title and freehold would be dependent on a successful planning application including long-stop dates for submission.

The third element concerned the redevelopment of the car park. The council had approved a budget of £35m for a new car park. However the proposal was now for a land swap for an equivalent footprint of land for the building of a new car park at a significantly lower cost. The cost would be greater on the current site because of linked buildings.

Councillor Werner stated that all welcomed the excellent proposals for Nicholson’s Walk. He noted there would be no sale until planning permission had been agreed. He welcomed the change of plan ensuring the current car park would not be knocked down until a new one was built.  However the problem he had identified was that the council would no longer had a freehold interest in the enterprise. Strategic oversight of the sites meant the council was in the game and could ensure commitments made in the consultation would be met. He referred to the Landing development which was given a number of planning permissions with increasing heights of building and less of a community hub element. The council needed to be careful in monitoring its strategic ownership. When the waterway under the Colonnade needed to be increased to allow larger boats the council had had to go to the developer with cap in hand. If the council had been part of the partnership the process would have been much easier. The detail would be in the contract yet the contract was not due to come back to full Council but was to be decided by the Leader and Councillor Johnson.

Councillor Jones commented that the Opposition were not as close to the detail or the conversations as the administration but the feeling was that the proposals would be a good thing for the town. However, there were concerns that there was no detail as to how the proposals fitted with the wider strategy and vision for Maidenhead.  She wanted to understand how the changes would impact on the original vision and needed reassurance that it fitted into Maidenhead as whole.

Councillor C. Da Costa highlighted the need for adequate disabled parking given the change in location of the car park.

Councillor Hilton commented that it was a sad fact that the shopping centre had been forced into receivership in October 2018 but this was a golden opportunity to remodel a significant part of the town centre and move the regeneration forward. A consequence of the changing retail environment meant the proposal was for mixed use. Councillor Hilton explained that he had been involved in the Ascot regeneration project since 2012. In Ascot the proposal was for new retail with a double–sided high street and was predicated on new development on an adjacent site. The viability of the retail element was to a great extent dependent on the footfall from the new developments. In a similar way, the success of the Nicholson’s centre would to some extent be dependent on those living in the area. Councillor Werner had spoken of a lack of control; in Ascot the council had no levers, just the borough local plan and a development brief. In comparison in Maidenhead there would be contractual arrangements and relationships had been built.

Councillor Reynolds stated that he was concerned that the proposal was selling off both the council’s rights and the opportunity for its voice to be heard. It should not be about an income for the council but about having a seat at the table and a voice in the debate about the future of Maidenhead.

Councillor Knowles commented that his concerns were with the tendering process as it looked like a closed situation with the developer getting a free run at building. A councillor who was absent had asked him to raise the suggestions that increased parking capacity could be included to reduce the need for Vicus Way car park.

Councillor Davey explained that he had read the previous minutes of Cabinet and full Council and had a few concerns. He understood if a local company wanted to undertake the works they would need three years’ accounts, a positive track record and could only bid for the project up to 30% of turnover. Areli had only been incorporated in 2018 therefore it had not been around that long even if its Directors had. He asked if the council was happy to give a line of credit on borrowing? He understood that in the corporate property world no entity wanted to lose its asset base and therefore set up a brand new company to minimise any potential financial risk, It was however a shame that SME businesses in the borough would not have the same breaks and were prevented from potentially life changing contracts such as this by bureaucracy and red tape. The cost of building the Broadway car park had originally been £8.51m but was later revised to £35m. Areli could reduce costs by 10% because of the individual build. Vicus Way was showing on the website as a tender of approximately £10m for 500 spaces. The new Broadway car park was estimated to cost £31m for 1333 spaces, or 1035 which was the figure in an earlier set of minutes. He therefore questioned if the value should be dropped by 22% to £24m? Could the new car park have 1500 spaces thereby negating the need for Vicus Way?

Councillor Targowski commented that the nature of the retail environment was constantly changing. The council could not expect to be an expert at retail but could use its assets to enable experts to come in. He was happy the council could manage the contractual relationship. It would be important for good lawyers to draw up the contracts rather than Members at full Council.

Councillor McWilliams commented that this was a huge opportunity to rebuild a key part of the town centre. The architect’s plans were very exciting. The key was control over the planning application. He referred to the Joint Venture sites which represented high quality development with affordable housing. He asked what the consequences would be if there were a downturn in the economy and the developer did not deliver a planning application.

Councillor Coppinger commented that the council had the opportunity to be at the birth of a new Maidenhead. The problem was that most councillors did not know what it should look like. The younger generation had a better idea. At one of the workshops recently held he had sat next to a young lady who commented that the group did not understand what younger residents wanted. They did not want a house with two parking spaces; instead they wanted a flat within walking distance of restaurants and entertainment venues.

Councillor Dudley responded to questions raised during the debate. He explained:

·         A change of control consent mechanism would be included in the contract to deal with a situation where the developer wanted to sell on the development in the event of an economic downturn.

·         The counterparty form a credit perspective for the developer’s financial obligations was Tikehau capital, which had assets under management of 22bn Euros.

·         Car park building costs were affected by factors such as ground conditions therefore there was not a uniform per parking space cost.

·         The current figure in the capital programme was based on a very complex site therefore a different location would be more straightforward.

·         The council would retain complete control of the new car park, which would supplement what was being provided at Vicus Way. The approximate size was 1030 spaces; the council would ensure it was the right size.

·         More blue badge spaces would be available in the new car park. The location would be closer to civic facilities such as the Town Hall.

·         The developer had successfully brought about the redevelopment of the Battersea power station site. The council was in a fortunate position that there were people who wanted to invest in Maidenhead and would bring their expertise.  There was a commercial imperative to create a beautiful place.

·         A piece of work was being undertaken on ensuring the new proposals fitted with the wider vision for the town centre. Areli had been instrumental in this.

·         The council retained control as the Local Planning Authority. Pre-application advice was being provided by skilled planning officers.

At this point the debate moved into Part II, to enable Members to debate the Part II information before making any decisions.

During the Part II debate, Members agreed to minute the resolutions relating to the Part I report in Part I:

It was proposed by Councillor Dudley, seconded by Councillor Coppinger, and:

RESOLVED: That Council notes the report and:

i)          Approves the sale of the freehold interest in the Nicholson’s Walk Shopping Centre for £1,000,000

ii)         Approves the sale of the freehold interest of Central House, Maidenhead for a total consideration of £5,000,000.

iii)       Delegates’ authority to the Executive Director – Place in consultation with the Leader of the Council and Cabinet Member for Maidenhead Regeneration and Maidenhead to negotiate and agree a contract with Tikehau Capital and Areli for sale of the Council’s assets above.

iv)     Agrees to minute recommendations i-iii in Part I.

A named vote was taken as at least five councillors made such a request, as per Part 2 C17.3.3 of the constitution. 31 Councillors voted for the motion: Councillors Bateson, Bhangra, Bowden, Cannon, Carroll, Clark, Coppinger, C. Da Costa, W. Da Costa, Davey, Dudley, Haseler, Hilton, Hunt, Johnson, Jones, Knowles, Luxton, McWilliams, Muir, Price, Rayner, Reynolds, Sharpe, Shelim, Singh, Stimson, Story, Targowski, Taylor and Walters

2 Councillors voted against the motion: Councillors Bond and Brar.

6 Councillors abstained: Councillors Baskerville, Davies, Del Campo, Larcombe, Tisi, and Werner