Issue - meetings

The Corporate Director of Economy and Place to present a report which sets out the latest position on the development of the Guildhall complex, specifically the procurement process to appoint a construction partner and the rationale for the officer decision not to proceed into the construction phase, and asks Executive to consider options for the way forward.

Resolved:  (i)      That the scope for the regeneration of the Guildhall, as set out in the ‘Future Options’ section of the report, be confirmed.

                   (ii)      That approval be given to procure a construction contractor for the Guildhall project, based upon Option 2 in paragraphs 29 to 31 of the report.

Reason:     To minimise delay and ensure that the value of the Early Contractor Involvement (ECI) phase work is realised for the project in re-tendering the delivery of the works in the most effective way, at less cost to the council than the other options and without committing the future budget.

                   (iii)     That, in view of the complexity of the project, a further report with proposals for the appointment of a contractor and determination of the final budget be brought to Executive in the Autumn; that report to include an updated business case, a risk assessment, and details of how the preferred supplier will promote economic growth.

                   (iv)    That the council enter into further discussions with Leeds City Region Local Enterprise Partnership, to seek to increase the level of grant funding to deliver the Guildhall scheme.

Reason:     To ensure the future viability and effective re-use of the Guildhall, as one of the city’s most significant buildings.

The Assistant Director of Regeneration and Asset Management presented a report which set out the latest position on the development of the Guildhall complex; specifically, the procurement process to appoint a construction partner and the rationale for the officer decision not to proceed into the construction phase, and options for the way forward.

On 16 March 2017, Executive had approved a detailed business case for regeneration of the Guildhall and plans to procure a contractor (Minute 136 of that meeting refers).  Contractors Interserve had since been appointed but failed to submit a suitable proposal at Stage1, and their contract had now been terminated. 

Three options were presented, as set out in paragraphs 27-37 of the report and summarised below :

Option 1 – proceed with the scheme as currently scoped.  This would increase the cost of the project by £5m-£6m, resulting in additional borrowing costs of £260k-£310k per year.

Option 2 – adjust the scope to reduce the cost.  Removing the proposed upper floor to the south range and servicing via the river would reduce the budget increase to £4m-£5m and borrowing costs to £210k-£260k, while maintaining key project outcomes. This was the recommended option.

Option 3 – undertake essential repairs and maintenance work only.  This would mean the council covering the full costs of borrowing (£3m-£5m) and repaying LCR grant funding.

In response to matters raised under Public Participation, Officers confirmed that alternative uses for the Guildhall had been considered and the Executive had decided to proceed in a way that was commensurate with the civic importance of the site.  In terms of expertise, the council already operated two of the largest and most successful office spaces in the city.

Resolved:  (i)      That the scope for the regeneration of the Guildhall, as set out in the ‘Future Options’ section of the report, be confirmed.

                   (ii)      That approval be given to procure a construction contractor for the Guildhall project, based upon Option 2 in paragraphs 29 to 31 of the report.

Reason:     To minimise delay and ensure that the value of the Early Contractor Involvement (ECI) phase work is realised for the project in re-tendering the delivery of the works in the most effective way, at less cost to the council than the other options and without committing the future budget.

                   (iii)     That, in view of the complexity of the project, a further report with proposals for the appointment of a contractor and determination of the final budget be brought to Executive in the Autumn; that report to include an updated business case, a risk assessment, and details of how the preferred supplier will promote economic growth.

                   (iv)    That the council enter into further discussions with Leeds City Region Local Enterprise Partnership, to seek to increase the level of grant funding to deliver the Guildhall scheme.

Reason:     To ensure the future viability and effective re-use of the Guildhall, as one of the city’s most significant buildings.