Agenda item

This report proposes to dispose of the council’s freehold interest in Stonebow House and 10 and 11 Redeness Street, which are low income generating assets.  Members are also asked to consider whether to use the capital receipts from these disposals to reinvest in the purchase of the head leasehold interests in two industrial sites at Hospital Fields Road in order to increase revenue income, or to use the capital receipts to reduce council debt and therefore borrowing costs.

Resolved: That Executive agree to:

(i)           Dispose of the freehold interest of Stonebow House and grant a long leasehold to Oakgate PLC on the small area of land identified in Annex 1 for a total price of £750,000; 

(ii)          Dispose of the freehold interest of 10 and 11 Redeness Street to Maple Grove Developments for £256,500;

(iii)        The purchase of the leasehold of sites 36 and 23  Hospital Fields Road for sums set out in the Confidential Annex 1, with delegated authority to the Director of Place to make the final purchase decision based on the outcome of surveys.

Reason:     (i)      To allow the redevelopment of Stonebow House to proceed, bringing back in to use and renovating a vacant run down building whilst achieving a significant capital receipt from a poorly performing commercial asset.

          (ii)      To dispose of a poorly performing asset.

(iii)     To increase the revenue income of the  commercial portfolio and create potential future development opportunities.

[See also Part B minutes]

Members considered a report which set out proposals to dispose of the Council’s freehold interest in two low income generating assets at Stonebow House and 10/11 Redeness Street. The report also considered whether to use the capital receipts from the disposals to reinvest in the purchase of the head leasehold interests in two industrial sites at Hospital Fields Road in order to increase revenue income.

Officers outlined the background to and negotiations undertaken with the Oakgate Group relating to the disposal of Stonebow House.  They also confirmed the Group’s recent receipt of planning approval to improve the building. Officers also reported on the offer by Maple Grove Developments for the freehold of the Redeness Street sites for student housing and on commercially confidential negotiations for the Hospital Fields Road sites which could provide the Council with development opportunities at a later date.

In answer to Members’ questions, Officers confirmed their recent contact with Edible York regarding proposals for the land in front of the former Heron Foods property and suggestions for alternative sites.

Members welcomed the proposed disposals and reinvestment of funds in order to increase revenue income and reinvigorate the Stonebow area.

Consideration was given to the following options:

Option 1 – Approve the disposal of the freehold of Stonebow House and 10 and 11 Redeness Street and use the proceeds to purchase the leasehold of sites 36 and 23 Hospital Fields Road.

Option 2 – Approve the disposal of the freehold of Stonebow House and 10 and 11 Redeness Street and use the proceeds to repay council debt. 

Resolved: That Executive agree to:

(i)           Dispose of the freehold interest of Stonebow House and grant a long leasehold to Oakgate PLC on the small area of land identified in Annex 1 for a total price of £750,000; 

(ii)          Dispose of the freehold interest of 10 and 11 Redeness Street to Maple Grove Developments for £256,500;

(iii)        The purchase of the leasehold of sites 36 and 23  Hospital Fields Road for sums set out in the Confidential Annex 1, with delegated authority to the Director of Place to make the final purchase decision based on the outcome of surveys. ^1.

Reason:     (i)      To allow the redevelopment of Stonebow House to proceed, bringing back in to use and renovating a vacant run down building whilst achieving a significant capital receipt from a poorly performing commercial asset.

          (ii)      To dispose of a poorly performing asset.

(iii)     To increase the revenue income of the  commercial portfolio and create potential future development opportunities.