Decision details
Enterprise Zone capital interventions phase 3
Decision Maker: Cabinet member corporate strategy and budget
Decision status: Recommendations approved
Is Key decision?: Yes
Is subject to call in?: Yes
Purpose:
To agree the next phase of capital interventions to make zone land ready for investment.
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Decision:
THAT (a) funding from the EZ capital budget be invested on infrastructure at the Hereford enterprise zone as follows:
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(b) Economic development manager be authorised to take all necessary operational decisions to implement the above projects.
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Reasons for the decision:
This investment is to ensure the continued build out of the EZ.
The regulations relating to EZs mean that the Local Enterprise Partnership (LEP) will benefit from retaining 100% of the business rates on units built on the Zone for 25 years starting in 2013. These can be re-invested in economic growth in the LEP area. The LEP have signed up to a series of capital interventions being made to maximise uptake and business rates generation. The council will make the interventions, and will be paid back in full, including the costs of making these interventions, from business rates generated.
A total budget for these interventions for the period up to 2019/20 has been approved by the council, draw down to be confirmed by decisions on cases submitted.
Without this investment historical and recent market experience demonstrates that sales would either slow markedly or stop entirely, meaning the business investment will halt and the job creation and business rates income targets will not be met. These works will lead to 15 acres of land being sold, at an expected receipt value of £3.1m.
Alternative options considered:
Option 1 – no forward expenditure on the enterprise zone (EZ).
Advantages
There would be no further capital outlay by the council.
Disadvantages
This would result in applying a brake on or even end further sales
of land on the zone, with consequent impact on sales receipts,
business rate returns and the reputation of the
council. Clients are expecting
service-ready plots and the sale price reflects this.
Option 2 – agree a reduced amount of expenditure
Advantages
This would reduce the capital outlay by the council.
Disadvantages
A lower capital outlay would serve to reduce the volume of sales,
which would be confined to those plots which are made ready for
development. This would change the
nature of the zone’s approach which has been business like
and responsive to the speed of client interest. Some clients would be turned away or asked to
wait. This option would not be in the
council’s interest as it would reduce the capital receipts
received and severely reduce the total business rate retention
figures over the 25 years life time of the EZ
programme. Again it would impact
negatively on the reputation of the zone – turning away a
prospective client on lack of readiness grounds would become widely
known.
Reason Key: Expenditure;
Wards Affected: Dinedor Hill;
Publication date: 23/06/2017
Date of decision: 23/06/2017
Effective from: 01/07/2017
Accompanying Documents: