Agenda item

To consider the report of the Cabinet Member for Regeneration and Economy seeking approval for Gloucester City Council to make available to Rokeby Merchant a regeneration enabling loan to assist with the delivery of the Bakers Quay scheme.

PLEASE NOTE: Appendix 1 contains exempt material as defined in paragraph 3 of Part 1 of Schedule 12A to the Local Government Act 1972 (as amended). If Members wish to discuss material contained within Appendix 1 it will be necessary to notify the Chair to enable a resolution to be passed to exclude the press and public.

RESOLVED:

1.    A regeneration enabling loan facility, as detailed in the confidential appendix, that is compliant with Market Economy Investor Principles, be made available through the Regeneration Reserve to Rokeby Merchant for the purposes of contributing towards the delivery of Phase 1 of the Bakers Quay scheme, repayable no later than 24 months after the final payment.

2.    Payments to the developer be made on a staged basis to reflect private sector investment and activity on the ground.

3.    The Head of Finance, in consultation with the Head of Regeneration and Economy and the Cabinet Member for Regeneration & Economy, be delegated authority to agree final loan terms with Rokeby Merchant, along the lines set out in the confidential appendix, and subject to his satisfaction that all necessary due diligence to minimise risk to the Council’s investment has been completed.

Cabinet considered the Cabinet Member for Regeneration and Economy which sought approval for Gloucester City Council to make available to Rokeby Merchant a regeneration enabling loan to assist with the delivery of the Bakers Quay scheme.

Councillor James explained that the Homes and Community Agency had aided in acquisition of the site, noting that there was a requirement to the developer to report on progress regularly. He stated that supporting the scheme through the regeneration fund would prevent any unnecessary delays and allow work on the site to start as soon as possible. He acknowledged that the site had been derelict for long period of time and welcomed the significant investment that the proposals would generate for the City. He concluded by reporting that the due diligence on the proposal had been undertaken, noting that a number of development proposals for the surrounding areas had been granted planning permission.

The Head of Regeneration and Economy reported that the JLL (Jones Lang Lasalle) had been commissioned to undertake due diligence and comment on the security viability against the loan. He reported that they had evaluated the risk and considered the proposals viable but had suggested further due diligence be undertaken before proceeding forward. He stated that the Council had commissioned Trowers and Hamlins to undertake this further due diligence work, noting that an extensive legal agreement with Rokeby Merchant already existed, which required them to provide regular project updates and monitoring reports. He advised that the funds would only be released to the developer on the achievement on key milestones, as outlined in the report. He acknowledged that the proposals contained some risk, as identified by JLL, but stressed the importance of delivering a successful development to aid market confidence and deliver positive outcomes for residents of the City.

In response to Councillor Cook’s query regarding timing of payment of the loan, The Head of Regeneration and Economy advised that responding to the query would result in the disclosure of commercially sensitive information and suggested a written response would be provided.

Councillor Norman reported that following the work undertaken on due diligence some of his earlier reservations has been addressed. He welcomed the staggered payments and questioned whether the developer would continue to look for private funding if the Council chose to provide the funding.

The Managing Director advised that as the Council were offering the loan at market rate, the developer was unlikely to get another loan at a more advantageous rate and were therefore unlikely to look for further funding.

Cabinet Members welcomed the proposals, accepting that that whilst there was some risk attached to the proposals, a successful development would attract further investment to the City and contribute to tourism and retail offer. 

RESOLVED:

1.    A regeneration enabling loan facility, as detailed in the confidential appendix, that is compliant with Market Economy Investor Principles, be made available through the Regeneration Reserve to Rokeby Merchant for the purposes of contributing towards the delivery of Phase 1 of the Bakers Quay scheme, repayable no later than 24 months after the final payment.

2.    Payments to the developer be made on a staged basis to reflect private sector investment and activity on the ground.

3.    The Head of Finance, in consultation with the Head of Regeneration and Economy and the Cabinet Member for Regeneration & Economy, be delegated authority to agree final loan terms with Rokeby Merchant, along the lines set out in the confidential appendix, and subject to his satisfaction that all necessary due diligence to minimise risk to the Council’s investment has been completed.