Agenda item

Nicholsons Quarter Appropriation

Minutes:

Cabinet considered the report regarding approval for the appropriation of council-owned land.

 

The Leader of the Council and Chairman of Cabinet, Business, Economic Development and Property informed Cabinet that He had great pleasure in presenting the report before which marked another key milestone in the delivery of this seismic regeneration project. A project that the Times national newspaper has called a blueprint for the future of town centre regeneration post COVID or others have dubbed the conversion of a shopping centre town centres concept.

Two years ago, we approve the sale of the council's freehold interest in parts of the Nicholsons Shopping Centre following its fall into administration and Central House and to enter into an agreement to relocate the existing carpark as part of the new master plan for the regeneration of that quarter of the town centre. I was very pleased to see resolution by councillors to grant planning consent for that developments, which was approved by the then Borough Wide Planning Committee in March 2021, not February as in the report.  There was unanimous support across all parties present.

 

To deliver any significant regeneration scheme, there are various mechanisms that a local authority can and indeed often should invoke progress, speed delivery of the scheme, but also to provide much needed competence to all parties as part of the process. It has been necessary for us to assist the development to not only invoke our powers of compulsory purchase, but further to that, and the paper before us this evening, the ability or the local authority to interfere with a number of existing third party rights across the site, including rights and servicing, rights of lights, rights of access, etc. We also require these rights for the construction of the new Broadway car park as well as to facilitate the broader delivery of the scheme.  The use of appropriation will not only increased certainty, and deliverability of the scheme, but it will also enable us to continue with pace to make sure that all the benefits are brought about in the shortest reasonable timeframe.

 

The use of powers of appropriation will result in those affected parties being entitled to compensation based upon the reduction of their property and loss of his performance rights. We do have the power and the Housing and Planning Acts 2016 section 203 to use as an appropriation to lawfully interfere with the rights of other parties.

 

To invoke said section of that particular act, we must hold the land for planning purpose.   Council which owns the freehold interest in the shopping centre does not presently hold the land for this purpose. So we need to formally change this process known as appropriation, which we are being asked this evening to approve following the appropriation of land should this report be agreed the council will then enter into a series of transfers to the developer as part of the land transfer agreements.

 

The Cabinet Member for Planning, Environmental Services and Maidenhead informed that Maidenhead is has already started its rebirth.  The new housing that is now being built is the first step. We have the opportunity to turn our town Maidenhead into one of the finest new towns in the whole of the country. This paper is another step in that process of moving from an old fashioned town centre with a vast number of shops to far more varied centre, especially in the new Nicholsons centre which meets the needs of our new and developing population. A place where you can find many cafes and bars and eating places, lots of speciality shops, small traders being allowed to flourish. We will see magic happening in Maidenhead. This paper will enable us to further to get there.

 

Mr Hill addressed Cabinet and said his questions fell into three categories: lease, negotiation and risk.

 

The Council currently own leases for 117 years that entitle us to 15% of net rental income.  That income fluctuates from year to year from zero to around £1m. The leases could therefore potentially generate £100m over their lifetime.

 

According to tonight’s paper we appear to voluntarily handing over for free all the leases and all that income. How much has Denhead S.A.R.L paid the residents of the Royal Borough for the loss of up to potentially £100m lease income over the next 117 years?

 

This paper follows from changes under case law from 2010, when a judge in Leeds said these powers amount to the compulsory purchase of private rights, such as the right to light. And here, those draconian powers are effectively given directly to a developer. In a nutshell, this proposal is akin to a privatised CPO. Doesn’t that make Members feel uneasy?  I do not understand the essential logic of this paper.

 

Paragraph 5.8(6) page 12 states that it is not feasible to enter into private treaty negotiations with all affected owners. However, the purpose of this complex land-swap is to use a super-CPO power, which essentially converts private property rights into money without compensation.

 

There will have to be a process of negotiation with every single affected party identified in the appendices to determine their individual level of compensation. So it is in fact feasible to negotiate, because you actually have to do it anyway.

 

I did not spot any evidence of any party in the appendices of anyone actually threatening an injunction. Can you confirm tonight has anyone actually threatened seeking an injunction?   If not, I ask is it proportional under the human rights act to avoid personal property rights with only hypothetical injunctions being faced?

 

One of the largest comparable sale-and-leaseback deal was that done by Harringey Council with Tottenham Hotspur football club. He had read their minutes, to derive these questions.

 

Under section 6 of the report you state that “There is limited risk for the Council as all associated costs will be indemnified by Denhead S.A.R.L”.

 

How can be there by any risks at all, if RBWM is indemnified against all associated costs?

 

1)         DENHEAD SARL is a Luxembourg based company. If that company folds for any reason what happens to this indemnity, is the indemnity backed by an independent INSURANCE from Lloyds of London or similar?

 

2)         Harringey Council had its costs covered for any tax liabilities that arise. Has RBWM received in writing the same tax indemnity? In particular Stamp Duty Land Tax, Land registry fees and VAT?

 

3)         In Harringey, the developer offered all affected parties free independent legal advice. Is Denhead proposing to do the same for here for affected businesses and residents?

 

The Chairman thanked Mr Hill but said that his first question was not part of the report.  But the rest of the questions he passed to Barbara Richardson, Managing Director of the RBWM Property Company.

 

Cabinet were informed that in terms of the council giving rights to the developer for appropriation, those rights are still with the Council, the same as the CPO rights are the council's rights, we don't give them away to the developer. They're there to make sure that the scheme goes forward. In terms of negotiations with various parties and businesses, and also private individuals, those negotiations had already started, and were well underway as part of the land referencing process that started once we had the CPO had approval.  In terms of tax advice for both stamp duty and various other corporation tax advice had been obtained for both the developer and both the council by both of our independent legal advisors.

 

Cllr Jones mentioned that removal of rights seemed quite a significant step and she was concerned about the impact to residents and businesses affected by the appropriation.  Those affected were not detailed within the report and this was a concern as it was important to know the impact of the decision.  It does seem to be quite a brutal measure and usually used once negotiations had broken down.  She asked what negotiation has taken place and how long have those negotiations been taking place?

 

Cabinet were informed that compulsory purchasing was a physical asset. If a CPO was awarded, then a compensation figure was awarded and the compulsory removal of someone's actual asset takes place, appropriation did not actually remove somebody's actual asset. It removed the right from the asset that they own that they have enjoyed in the past that they may not enjoy in the future. So for instance a rite of light or if you were taking away a public right of access.  Appropriation was similar to a CPO, but it's not actually as brutal if you'd like in law as a CPO and compensation was still awarded.  It was used to stop someone hindering the development.  It was not anything unusual or uncommon for a local authority to do on a large scale scheme. It absolutely does not remove the need to negotiate with any residents or any businesses. And it does not in terms of appropriation, take somebodies property away from them.

 

Cllr Singh informed Cabinet that in March 2021 Cabinet agreed to a compulsory purchase order to seize land from residents and businesses, for private developers who will make millions.  He said it was developer who were running the Council.  He said Councillor Johnson avoided a question at full council on wherever the administration considered a joint venture of this important site giving away great value.   RBWM would only b receiving £1 million by giving away the freehold.  You are giving away the right to light, the right to drainage, access rights with just 14 days notice.

 

This was supposed to be a conservative cabinet. This is not what a one nation conservatism is all about. These developments are supposed to benefit ordinary people not strip their land.  We need to start engaging with residents and force these developers to consult with residents.

 

The Chairman replied that when he mentioned the March meeting he was going to talk about the planning meeting were bot ward members were in favour of the application.  He recalled Cllr Singh’s supportive comments at the meeting and his support to the regeneration project under the previous leader.  He agreed that developers should not ride rough shot and should consult with residents when it affected their day to day lives. 

Resolved unanimously:  that Cabinet notes the report and:

 

Approves the appropriation of all Council freehold land that will form part of the Nicholsons Quarter Regeneration Scheme.

 

ii) Authorises officers to exercise the Council's powers under Section 122 of the Local Government Act 1972 (LGA 1972) to appropriate the Land for planning purposes to facilitate the carrying out of the Scheme in accordance with section 226 of the Town and Country Planning Act 1990 once planning permission has been granted for the Development and the Land is required to deliver the Scheme and so is no longer required for the current purposes.

 

iii) Approve the acquisition of Denhead S.A.R.L.’s existing freehold interest in the Nicholsons Shopping Centre for nil consideration and simultaneously grant a new 999-year lease back to Denhead S.A.R.L.at a peppercorn rent with the right for Denhead S.A.R.L. to acquire the freehold for nil consideration at a future date.

 

iv) Delegates authority to the Chief Executive in consultation with the Cabinet Member for Business, Economic Development & Property to negotiate the legal contracts required to complete the transactions.

 

 

Supporting documents: