Decision details

An opportunity has arisen for the council to acquire the freehold interest in a portfolio of properties in the city centre that represent a good commercial opportunity and a way for the council to generate significant additional income to contribute to the increased budget income target set for the council’s commercial portfolio.

The report will seek to establish a commercial investment budget to enable the council to make the acquisition. This budget will need to be agreed by Full Council. The property is on the market now and will be marketed over the summer. In order for the council to make a competitive bid for this property, this item has been added to the Forward Plan as an urgent item to enable the recommendation to be considered at Full Council in July. If the report does not go to July Executive, then the next Full Council is in October which will be too late and the council will have missed the commercial opportunity.

Purpose of report: To set out the business case for a strategic investment in commercial property in York City Centre in order to secure increased income from the council’s commercial portfolio and to meet budget targets.

Members will be asked to recommend to Full Council the establishment of a capital budget to fund the acquisition of freehold interest in some city centre property assets.

Resolved:  That the Executive:

                                i.       Recommends to full Council:-

the establishment of a capital budget of £15m, to be financed initially from borrowing, to fund the acquisition of freehold interest in a portfolio of city centre commercial property assets.

to agree that any future capital receipts not currently assumed in the Capital strategy, be allocated to fund the purchase, thereby reducing in time the associated borrowing related to the investment. This will be updated in capital monitor reports in the future.  

                               ii.       Agrees to bring back to Executive a due diligence report prior to completion of the acquisition.

Reason:    To ensure the ongoing economic vibrancy of the city centre and increase the income from the council’s commercial property portfolio in order to achieve budget targets.