To consider the Cabinet Decision Reference No: 2009.CAB.036 to conclude negotiations and enter into the Edgar Street Grid (ESG) Retail Quarter Development Agreement between Herefordshire Council, ESG Herefordshire Ltd, and Stanhope following an initial European procurement process and subsequent detailed financial and programming negotiations agreed at the Cabinet Meeting on 25 June 2009 that has been called in by three Members of the Committee.

EXCLUSION OF THE PUBLIC AND PRESS

In the opinion of the Proper Officer, the next item will not be, or is likely not to be, open to the public and press at the time it is considered.

RECOMMENDATION:

That the public be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Schedule 12(A) of the Act as indicated below.

ESG RETAIL QUARTER DEVELOPMENT AGREEMENT APPENDICES THREE AND FOUR

Not for Publication: This item discloses information relating to the financial or business affairs of any particular person (including the authority holding that information).

The Committee considered Cabinet’s decision to grant approval to enter into the Edgar Street Grid (ESG) Retail Quarter Development Agreement between Herefordshire Council, ESG Herefordshire Ltd, and Stanhope.

The decision had been called in by three Members of the Committee: Councillors DJ Benjamin, GFM Dawe and MAF Hubbard.

The stated reasons for the call-in were

·      There being no previous indication that a 250 year lease was being considered, and insufficient explanation as to why this was necessary.

·      The ‘Masterplan’ was negotiated before the start of the credit crunch and there has been no public re-negotiation of plans for the Retail Quarter since those events.

·      With due regard to matters of commercial confidentiality, there is insufficient  information about the structure of the financial arrangements in relation to the Retail Quarter itself, and also between the Retail Quarter and other parts of the ESG project.

The Chairman explained how he proposed to conduct the meeting.   He emphasised that the focus of the meeting should be on the merits of the Cabinet decision of 25 June.

A Member proposed that Mr R Clay, a city resident, should be co-opted onto the Committee for the part of the meeting open to the public outlining his qualifications and the support he had provided to those initiating the call-in.

The Committee considered the matter and decided not to co-opt Mr Clay.

A statement was then made on behalf of those initiating the call-in.  The principal points are summarised below:

·         Too little information had been made available about a momentous decision for the City and the County.

·         There were considerable unanswered concerns on the part of the business and related professional community in the City.

·         The recent resignation of Clive Richards as Chair of the ESG Company was unexplained.

·         That the scrutiny process was flawed.

·         That the Community Services Scrutiny Committee had not previously conducted any in-depth or robust examination of the ESG project.

·         A criticism of the role of the Chairman of the Committee and the appropriateness of his chairing the meeting.

·         A concern that Cabinet had taken its decision on the ESG Retail Quarter Development Agreement before planning approval had been given to the new relocated Livestock Market which it was suggested raised the question of predetermination.

·         Criticism that a number of people had not been invited to appear before the Committee as witnesses.

·         That those initiating the call-in had not been granted their wish to have an advisor of their choice co-opted onto the committee to assist them.  This made it difficult for them to challenge the professional representatives attending the meeting on behalf of the Council and ESG Board.

·         That depending on the outcome of the meeting it was intended to pursue the matter including by holding a public meeting where the concerns of the citizens and its business community could be given a full airing.

·         It was suggested that the way in which the call-in had been handled had impaired the attempt to hold the Executive to account and therefore might increase  ...  view the full minutes text for item 17

To seek approval to proceed to conclude negotiations and enter into the Edgar Street Grid (ESG) Retail Quarter Development Agreement between Herefordshire Council, ESG Herefordshire Ltd, and Stanhope following an initial European procurement process and subsequent detailed financial and programming negotiations. 

The Cabinet Member Economic Development and Community Services presented the report on the ESG Retail Quarter Development Agreement.  Members were provided with a summary of the detail provided in the report, of which the following points were highlighted:

• The signing of the Development Agreement would tie both Herefordshire Council and Stanhope into the development process and would provide greater certainty for the progress of the mixed-use scheme within a structured timeframe.
• The current Herefordshire UDP and the ESG SDP identified that the entire Retail Quarter site be considered for re-development as a mixed use site.
• Of the land outlined for the Retail Quarter, the Council’s ownership amounted to approximately four hectares.
• Stanhope had been in negotiations with Herefordshire Council, ESG Herefordshire LTD and AWM with regard to; the final development mix, the designs for the site and over detailed financial considerations.  During this time (15 months), the economy had deteriorated and the terms of the Development Agreement had been amended to reflect the requirements of both principal parties. These amendments included the consideration of a phased approach in order to deliver the retail development part of the project on a staged basis.
• Following negotiations, and subject to Cabinet approval to the recommendations within the report, it was anticipated that the Development Agreement would be in a position to be signed shortly and would comprise the following elements:

·         Development Agreement with around 20 appendices and over 10 schedules;

·         CPO Indemnity Agreement (to be concluded at a later date following agreement of the phased scheme); and

·         250 year Head Lease (this would not be granted to Stanhope until the scheme has been practically completed)

·         The infrastructure for the development programme would consist principally of: off-site flood mitigation, the Link Road, on –site flood alleviation and re-alignment of Widemarsh Brook, and the new livestock market construction.  The major development projects to support the wider ESG programme would include the individual development projects of the Retail Quarter, Urban Village, Transport Hub and New Area.

·         In relation to funding arrangements, the Development Programme identified elements of the redevelopment which were unfinanced by either Herefordshire Council or AWM.  Discussions were being held between the  Council, ESG Herefordshire Ltd, and the Homes and Communities Agency (HCA) regarding the HCA providing appropriate financial contribution.

·         Further benefits of the wider scheme, both economic and social were outlined, these included a multi-screen cinema, restaurants, car parking, high quality pedestrianised streets (together with substantial improvements to current provision) and a department store.  Members were advised that Ben Hamilton Baillie had been retained to ensure that the design would join together both the old and new parts of the city to ensure a single city centre.

·         Members attention was drawn to the legal, financial and risk management considerations as contained in the report.

The Leader advised Members that a recommendation to Cabinet was to approve the Development Agreement as negotiated to date, and that this included recognition of the proposed phased approach whilst retaining the integrity of the overall scheme.  Cabinet were  ...  view the full minutes text for item 8