Agenda item

Report of Leader/Portfolio Holder for Strategic Infrastructure and Communications

The Deputy Leader/Portfolio Holder for Resources and Neighbourhood regeneration introduced the report on behalf of the Leader/ Portfolio Holder for Strategic Infrastructure and Communications, seeking approval for No.2 Building, Nottingham Science Park.

RESOLVED to delegate authority to:

(1)  the Deputy Chief Executive/Corporate Director for Development and Growth to accept the Building Foundations for Growth grant funding and subject to legal advice, enter into a funding agreement;

(2)  the Deputy Chief Executive/Corporate Director for Development and Growth, in consultation with the Leader/Portfolio Holder for Strategic Infrastructure and Communications, to approve the final business case for No.2 building;

(3)  the Deputy Chief Executive/Corporate Director for Development and Growth, in consultation with the Leader/Portfolio Holder for Strategic Infrastructure and Communications, to enter into contracts for the works contracts and with the Council’s professional advisers and to commit to any other expenditure required during the preconstruction and construction phases subject to the costs being contained within the parameters of the financial model, and grant being confirmed by the D2N2 Local Enterprise Partnership;

(4)  the Director of Strategic Assets and Property to market No.2 building, appoint a management team to manage the building and conference facility and procure a conference/café operator.

Reasons for Decisions

The development of a new building at Nottingham Science Park is unviable without grant funding. Grant funding is available for this project via the D2N2 Local Enterprise Partnership.

Building No.2 will be submitted for planning permission following Executive Board approval. The final business case will not be available until the completion of the negotiations with the build contractor and the final tender price has been agreed.

The Council will enter into a build contract, the terms of which need to be negotiated through the SCAPE framework and continue to contract with Perfect Circle, via SCAPE to provide services for the preconstruction and construction stages.

The project needs to be funded through Council resources with any viability gaps being met by the grant.

The full scheme is not currently in the capital programme, although there is a small scheme in the capital programme which can be amended.

There is deficit in the first 3 years following completion of construction. The funding of this deficit needs to be found from internal Council resources.

The early marketing and appointment of a conference/café operator will ensure that the internal design of the building meets users’ needs.

Other options considered

Do nothing – the site has been left undeveloped for over 12 years. The site is identified as having strategic importance in supporting the research and develop in the science sector and is part of the D2N2 Enterprise Zone.

Private sector delivery - The private sector by itself will not deliver multi-let workspace as it would not be commercially attractive.  A traditional development appraisal demonstrates that the rental levels that could be achieved coupled with the investment market’s perception of risk (reflected in a high yield) does not result in a viable commercial development. However, it can be demonstrated that there is demand for this space from companies that do want to expand or invest in Nottingham. Therefore, it is evident that there is market failure to provide this type of development.