Agenda item

To consider the report of the Cabinet Member for Regeneration and Economy and Cabinet Member for Performance and Resources seeking approval for the  implementation of a strategy to enable further investment in property assets.

18.1    Council considered the report of the Cabinet Member for Regeneration and Economy and Cabinet Member for Performance and Resources seeking approval for the implementation of a strategy to enable further investment in property assets.

18.2    Councillor Norman highlighted key areas of the report and emphasised that the Council would not invest in any property unless there was a business case to do so. He noted that all local authorities were facing reduced funding from central government and the City had to transform itself into becoming more entrepreneurial. He concluded by reporting that a number of other local authorities had also diversified into similar areas.

18.3    Councillor Watkins advised that whilst the preference would be to invest locally, if deemed prudent the Council would look to make investments further afield to ensure a diverse portfolio.

18.4    Councillor Hilton expressed concern with the riskiness of the strategy. He stated that the Council were already experiencing difficulties in letting retail units in the City Centre and such a venture required board members with the relevant expertise. He reported that a slight drop in the predicted yield as outlined in the report would put the enterprise into a deficit and expressed disappointment that Group Leaders and all Members of the Council had not been consulted on the proposals earlier.

18.5    Councillor Coole expressed concern that heavy investment from numerous local authorities would distort the market and was not sustainable.

18.6    Councillor Pullen also expressed concern at the level of risk the Council was exposing itself to. He commented that property deals tended to be complex in nature, noting the difficulties the City Council had faced with the sale of Kings Walk Shopping Centre and the continued market uncertainties regarding Brexit.

18.7    Councillor Smith queried the likelihood of the Council being able to achieve the optimum financial position as outlined in the report and went on further to question why detailed cost analysis and forecast projections had not been included within the report.

18.8    Councillor Hawthorne welcomed the proposals reporting that they would have a very positive impact on regeneration. He challenged the asset based community development statement contained within the report, stating that this was a key opportunity for the City Council to progress its aims in developing this further.

18.9    Councillor Norman assured Members that the Council would consider any investment carefully before making a final decision and were not intending to invest up to the maximum borrowing limit immediately.

18.10  Councillor Pullen, supported by a further four members of the Labour Group, requested a recorded vote, results of which were as follows:

For                                             Against

          Councillor Morgan                       Councillor Pullen     

          Councillor Toleman                      Councillor Hilton

          Councillor Watkins                       Councillor Lugg

          Councillor Cook                           Councillor Bhaimia

          Councillor Noakes                       Councillor D. Brown

          Councillor D. Norman                  Councillor Hansdot

          Councillor Organ                         Councillor Hampson

          Councillor Gravells                      Councillor Brazil

          Councillor Tracey                        Councillor J. Brown

          Councillor Hanman                      Councillor Coole

          Councillor Lewis                          Councillor Fearn

          Councillor Williams                      Councillor Hyman   

          Councillor Dee                             Councillor Ryall

          Councillor Taylor                         Councillor Smith

          Councillor Patel                          

          Councillor H. Norman

          Councillor Pearsall

          Councillor Finnegan

          Councillor Hawthorne

          Councillor Melvin

          Councillor Walford

                    (21)                                            (14)

18.11 RESOLVED that:

(1)        Authority be delegated to the S151 Officer in consultation with the Cabinet  Member for Performance and Resources to:

a)   amend the capital programme to create a  Property Investment fund of £80m in order to acquire new investment property;

b)   borrow as required to fund property purchases in accordance with the prudential code ; and

c)   Amend the Treasury Management Strategy and Prudential Indicators as necessary to reflect the Council’s borrowing requirement.

(2)        Subject to the approval of recommendation 1,  the following delegations be approved to proceed with the acquisition of assets, subject to the acquisitions meeting the parameters of the  Property Investment Strategy:

a)    Asset purchases of up to £15m to be approved by the S151 Officer in consultation with the Property Investment Board.

b)    Asset purchases in excess of £15m be referred to the Cabinet.