Decision details
New lease arrangements for leisure facilities
PDF 117 KBDecision Maker: Cabinet member contracts and assets
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
Purpose:
To approve the assignment of new longer term lease/s with revised conditions for 7 of the council’s leisure facilities to Halo Leisure Ltd.
Decision:
|
THAT: (a) the leases Halo Leisure Services Limited (Halo) hold for Hereford Leisure Centre, Hereford Leisure Pool, Leominster Sports Hall, Leominster Leisure Pool, Ross on Wye Swimming Pool, Bromyard Leisure Centre, Ledbury Leisure Pool, and the car parks adjoining Leominster Leisure Pool and Hereford Leisure Centre be terminated by agreement and new 75 year full repairing leases be issued; (b) a 10 year rent free period be granted following which a minimum rent of circa £50K per annum will be charged followed by regular rent reviews: and, (c) authority be delegated to the Director for economy, communities and corporate to finalise lease terms and implement the recommendations above
|
Reasons for the decision:
A lease period of 75 years would enable Halo to make more concrete longer term business decisions which would help to ensure a sustainable leisure offer across the county.
Revised lease conditions would transfer the considerable buildings/grounds maintenance liability to Halo resulting in a significant annual saving for the council.
In time Halo would pay an appropriate market rent for the facilities providing the council with a minimum income stream of £50k per annum.
Alternative options considered:
Shorter term leases including the terms/conditions currently in place could continue. Halo would ideally prefer a 99 year lease but it has been agreed that 75 years would be an appropriate length of time to deal with the backlog of maintenance and successfully compete for outside work. Revised longer term lease conditions would include Halo taking on full repair and maintenance liability for the facilities, which will result in significant savings for the council.
When the current leases expire the council could offer for sale the freehold or a leasehold interest in the buildings. Provided that we can illustrate that the best value requirement is met i.e. by adequate marketing, and independent valuation. Selling the freehold would of course result in a one off capital receipt however, even with the inclusion of covenants, if the centres were to underperform the new owner could choose to close one or all of them.
Reason Key: Expenditure and strategic nature / impact on communities;
Wards Affected: (All Wards);
Contact: Penny Jones, Growth Programmes Projects Manager Email: le1@herefordshire.gov.uk Tel: 01432 260613.
Publication date: 19/07/2017
Date of decision: 19/07/2017
Effective from: 27/07/2017
Accompanying Documents: