Agenda item

To approve the transfer of One Leisure Huntingdon and the Medway Centre between Huntingdonshire District Council and Huntingdon Town Council, including a £300k contribution and the provision of an interest free loan to Huntingdon Town Council.

 i.  to transfer the freehold title of the Medway Centre, Medway Road, Huntingdon to Huntingdon Town Council at £1 (if requested);

ii.  to accept the freehold title of One Leisure Huntingdon, St Peters Road, Huntingdon upon transfer from Huntingdon Town Council at £1 (if requested);

iii.  to make a contribution of £300,000 to Huntingdon Town Council, to be restricted to use on capital expenditure (payment being at the point of asset transfer);

iv.  to finance the £300k contribution (ref (iii) above) from the current 2016/17 forecast underspend. If not available at the year-end, then from the Special Earmarked Reserve;

v.  subject to relevant and appropriate security, to grant a concessionary (soft) loan to Huntingdonshire Town Council of £800k for a period of up to 5 years at 0.25% or less (whatever the minimum interest is legally allowed);

vi.  to finance the £800k loan by way of external finance from the Public Works Loan Board; and

vii.  to charge, over the life of the loan (ref (vi) above), the interest to One Leisure (estimated cost over 5 years being £24.2k).

At the commencement of the item Councillor D Brown declared a non-statutory disclosable interest by virtue of being a Member of, and the Mayor of, Huntingdon Town Council.

The Cabinet considered a report (a copy of which is appended in the Minute Book) to consider the transfer of assets being One Leisure Huntingdon and the Medway Centre between the District Council and Huntingdon Town Council, including a £300k contribution to equalise the property valuation difference and the provision of an interest free loan to the Town Council.

It was explained that currently One Leisure Huntingdon was owned by Huntingdon Town Council but leased to, and operated by the District Council.  Whereas the Medway Centre was owned by the District Council but leased to, and operated by the Town Council. The arrangements were preventing the development of each site and therefore the provision of effective services to its customers and residents.

Consequently, over a period of time both the District Council and Town Council had been seeking a mutually acceptable solution to transfer the freehold of the respective assets to which was presented to the Cabinet.  It was reported that Huntingdon Town Council had considered the proposal and had accepted the terms of the agreement.

In response to a question regarding the justification for the recommendations in the report for a £300k cash contribution by the District Council to the Town Council and a loan of £800k to the Town Council for a period of up to 5 years, the Cabinet were referred to Appendix 2 of the report which detailed the financial analysis of the exchange of assets between to two Councils, which explained the reason for the £300k cash contribution.  The figure having been obtained following an independent valuation report, the conclusions being that One Leisure Huntingdon (dry side) was valued at £1.4m and the Medway Centre was valued at £0.665m.

Subject to relevant and appropriate security the Council would provide a £800k loan from the Public Works Loan Board to enable the Town Council to enhance the current community hall provision, the interest for which would be charged to One Leisure.  It was reported that Huntingdon Town Hall was the security levied against the loan.

The Cabinet noted that in order to modernise One Leisure Huntingdon the Council needed to invest approximately £800k capital.  However, was reluctant to commit investment without security over tenure or the freehold of the property. The transfer of the One Leisure Huntingdon and the Medway Centre between the Councils would result in two modernised facilities for the residents of the District.  It was further noted that the transfer of the assets was appropriate as the Councils would now be operating facilities appropriate to their levels of expertise.

In agreeing that the report was fantastic news and congratulating the Members, Officers and the Town Council involved in the long protracted negotiations, the recommendations were put to the vote and the Cabinet (Councillor D Brown having abstained)

RESOLVED

  i.  to transfer the freehold title of the Medway Centre, Medway Road, Huntingdon to Huntingdon Town Council at £1 (if requested);

  ii.  to accept the freehold title of One Leisure Huntingdon, St Peters Road, Huntingdon upon transfer from Huntingdon Town Council at £1 (if requested);

  iii.  to make a contribution of £300,000 to Huntingdon Town Council, to be restricted to use on capital expenditure (payment being at the point of asset transfer);

  iv.  to finance the £300k contribution (ref (iii) above) from the current 2016/17 forecast underspend. If not available at the year-end, then from the Special Earmarked Reserve;

  v.  subject to relevant and appropriate security, to grant a concessionary (soft) loan to Huntingdonshire Town Council of £800k for a period of up to 5 years at 0.25% or less (whatever the minimum interest is legally allowed);

  vi.  to finance the £800k loan by way of external finance from the Public Works Loan Board; and

  vii.  to charge, over the life of the loan (ref (vi) above), the interest to One Leisure (estimated cost over 5 years being £24.2k).