Agenda item

This report presents an updated Property Asset Management Strategy (PAMS) which will help the Council to meet the challenges of the CIPFA Resilience Review January 2024 which amongst other things recommended that the Council should carry out a property review to identify surplus property assets.

Alongside this updated Strategy, this report also presents phase 1 of the resulting property review in relation to those non-operational property assets which have been identified as being suitable for being declared surplus, so that they can potentially be disposed of, following appropriate consultation with stakeholders, including the Council’s Corporate Landlord Board (CLB.).

This report is being presented to this Committee for pre-decision scrutiny prior to consideration by the Cabinet on 29 October 2024.

Discussion:

Officers summarised the background and rationale for the Asset Management Strategy and Property Review for the Committee and explained the methodology for selection of the properties that should be recommended for disposal.

The Committee was informed that this was an early stage of the process and that all properties would be considered on a case-by-case basis by the Director of Place, in consultation with the Council’s Corporate Landlord Board (CLB) before being disposed of.

Members raised the following comments and queries:

• The principle of disposing of properties that yield low income, were derelict, of no economic value or require expensive maintenance makes sense.

• Members queried whether the methodology took into account fluctuating interest rates. Officers advised that going forward any decision to dispose of the properties would be made in liaison with the Council’s CLB and fluctuating interest rates would be taken into consideration. Members suggested providing Cabinet with different scenarios based on different interest rates and officers responded that these would only be “snapshots” and that it would be preferable for CLB to consider, the current values of properties, current income and interest rates prior to the disposals.

• Officers were asked if there was any way to restrict the future use of properties that were disposed of. Officers responded to explain that there were various ways to address this, but this would be a matter for the CLB when looking at disposal as this could impact on values.

• Members asked whether any property disposal should await until the outcome of the Local Plan as some sites could be needed for infrastructure. Officers confirmed that where appropriate the disposal process would be informed by the Local Plan Process and would involve promoting sites for development where it was beneficial to do so.

• In response to a question about maintenance costs and potential savings, officers confirmed that properties in the non-operational property review were mostly unused or let so there were no large maintenance costs for Medway Council. The savings in future maintenance costs would be identified in the forthcoming review of the Council’s operational properties.

• Members questioned why properties had been purchased outside of Medway and were informed that the 10 properties recommended for disposal were the only properties out of areas and that it was unlikely any other properties would be purchased out of area.

• Assets of Community Value were discussed and how Members could support this. The Committee was informed that some of the sites were already leased to community groups and they would be given the opportunity to purchase the sites which they occupy. Officers clarified that in the operational property review that would follow there could be properties that groups want to list as assets of community value and there would be a process to follow for this.

• Confidence levels of officers for raising approximately £20m from the disposal programme were queried and officers confirmed that they were confident that this could be achieved.

• Officers were asked why a heritage asset, Temple Manor, was included in the list and how its future could be protected. Officers explained that Temple Manor was in the guardianship of central government through English Heritage, was rarely open and no Council services were run directly from it. Officers confirmed that whilst English Heritage had no objection to the sale of the property  they would like the public to be able to visit the property still and would work with any new owners to achieve this.

• Members questioned whether planning applications should be made prior to disposal to increase the value of some sites. The Committee were informed that CLB would consider whether applying for a change of use or planning permission for some sites would be beneficial in terms of value and each site would be looked at on a case-by-case basis as part of the disposal process. Officers also stated that some sites had limited scope for this.

• Members questioned whether additional staff to deliver the programme would be required for longer than 3 years and whether they would be specialists. In response officers explained that staffing was currently being progressed with the Head of Property and opportunities for secondment or interim staff were being explored.

• With regards to the Capstone Farm site, Members queried whether any of the let site was being retained. Officers confirmed the site which was recommended for disposal was the full extent of the let site and the tenancy length would be provided outside of the meeting. (The lease of this site expires on 17 September 2030.) 

• Members queried how many other properties the Council owned, and how many were not recommended for disposal as part of this review and officers confirmed that they were happy to provide information outside of the meeting.

• Officers confirmed that tenants in let properties had been contacted and that  they would have the opportunity to purchase the properties which they occupy and that any existing leases would have to be honoured by new owners.

Decision:

The Committee made and submitted comments on the proposals set out in the report to the Cabinet, as set out above, and noted that the Cabinet will be asked to approve the following recommendations on 29 October 2024:

i)               To agree the updated Property Asset Management Strategy (PAMS), as set out in Appendix 1 to this report.

ii)              To agree to declare the following non-operational properties surplus, and to delegate authority to the Director of Place, in consultation with the Corporate Landlord Board (CLB) to agree the method of disposal for each property and to dispose of the properties in order to obtain the best price reasonably obtainable:

·       Land to the South- east of the end of Northdane Way Lordswood.

·       Land at 126-150 Chatham Hill.

·       Warren Wood Social Club, Rochester.

·       Rainham District Shopping Centre.

·       Industrial Estate - Railway Street, Gillingham.

·       Indoor Bowls Club, Prince Arthur Road, Gillingham.

·       Gillingham Business Park.

·       Northbank House, Sir Thomas Longley Road, Rochester.

·       Ground Floor Shop 23-25 High Street Brompton.

·       Britton Farm Shopping Centre, High Street, Gillingham.

·       Former Fire Station and Public Toilets Arches, New Cut, Chatham.

·       Unit 1 Court Farm Industrial Estate, Cwmbran, Gwent Wales.

·       Unit 1 Cherry Trees Court, Hemel Hempstead, Hertfordshire.

·       Vantage Point, Holborough Road, Snodland, Kent.

·       Eldon Road, Aycliffe Industrial Estate, Newton Aycliffe.

·       Saxon Business Park, Bromsgrove, Worcestershire.

·       Suffolk Business Park, Bury St Edmunds, Suffolk.

·       Unit 5 Deans Industrial Estate, Livingstone, Scotland.

·       19 Lords Fold, Rainford, Merseyside.

·       Unit A1 Boothroyds Way, Pontefract, West Yorkshire.

·       Viking Park, Whitehill, Bordon, Hampshire.

·       Temple Manor, Knight Road, Strood, Rochester.

·       Site of 121-129 The Brook, Chatham.

·       Capstone Farm, Capstone Road, Farmland adjacent to Capstone Farm Country Park, Chatham.

·       Eastcourt & Mariners Fields Farmland adjacent to Riverside Country Park, Gillingham.

·       Land and building rear of 70 Maidstone Road, Rochester.

·       Stirling Sports Centre, Maidstone Road, Rochester.

·       Eastgate Cottage, High Street, Rochester.

·       Land at Abbotts Court Farm, Bredhurst, Gillingham.

·       Gillingham Golf Club, Woodlands Road, Gillingham.

iii)            Plans of the above properties which are in Medway are attached to this report in Appendix 3 and further details of all of the properties are set out in Exempt Appendix 1 to this report.

iv)            To recommend that the Chief Executive, using urgency provisions, approves an addition to the Capital Programme for a budget of up to £400,000pa for up to 3 years to fund the cost of additional staff, which will be required to dispose of the surplus properties, this expenditure is to be funded from the resultant capital receipts, under flexibilities granted by the Government.