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Agenda Item No

 

The Vale of Glamorgan Council

 

Scrutiny Committee (Economy and Environment): 9th October 2012

 

Report of the Director of Development Services

 

LDP Study and Nell's Point, Barry Island

 

Purpose of the Report

1.             To update Members on progress with regard the project and the completion of the two stages of the Collins / LDP report regarding possible investment in leisure uses at Nell's Point, Barry Island

Recommendations

1.             That Committee endorses the report and refers the same to Cabinet.  .

2.             That the views of the Barry Regeneration Area Board be noted.

3.             That officers prepare a Consultancy Brief in order that Stage 3 of the master planning, marketing and investment plan for Nell’s Point can proceed and that the Director of Development Services, following consultation with the Cabinet Member for Regeneration, Innovation, Planning and Transportation, the Director of Resources, and the Leader procures such services.

4.             That following the preparation of the Consultancy Brief, and if considered appropriate, the Council procures the work directly for LDP / Collins with the appropriate exemption from financial regulations

5.             That the costs of such Consultancy Services be financed via the Barry Regeneration fund element of the Council’s Capital Programme.

6.             That officers utilise the recommendations of the report and incorporate such proposals into a draft Barry Island Master Plan.

7.             That officers complete the draft Barry Island Master Plan and report firstly to Scrutiny Committee and then to Cabinet, prior to a formal consultation exercise being undertaken.

8.             That officers report the outcome of the Stage 3 report when available.

Reasons for the Recommendations

1.             In order that the views of the Committee are sought and the report referred to Cabinet for consideration.

2.             To allow consideration of the programme and funding requirements associated with the project.

3.             To allow progression of the third stage of the Consultancy work involving the actual marketing of the land and negotiations with a specific group of investors in accord with an agreed brief.

4.             It may be considered appropriate to request LDP to progress this work given their input into stage 1 and 2.

5.             To finance the work.

6.             To progress the Barry Island Master Plan to a draft stage for Members views via Scrutiny Committee and Cabinet prior to consultation.

7.             To provide a contextual framework for the regeneration of Barry Island.

8.             To provide details of progress to Cabinet.

Background

2.             Members will recall that officers reported to Cabinet on 12th December 2007 regarding Nell's Point and future land uses. That report was agreed and contained a recommendation relating to the appointment of consultancy support.

3.             In accordance with recommendation 4 of that report, and following lengthy discussions with a different consultancy, Humberts Leisure was appointed in June 2009.  Following the completion of the Humberts Report and prior to moving into the marketing stage of the project, officers wished to feed the completed report through to the various stakeholder groups and to general consultation with the intention of reporting comments back to Cabinet for a resolution on marketing in the summer of 2010.  A number of respondents suggested that the discussion of Nell’s Point should be within the wider context of a master plan for Barry Island in order that a wider consolidated approach might be taken. Others suggested that this wider contextual approach should be considered as part of the work of the Barry Regeneration Area as funding might be available from the Welsh Government under that banner for this work.

4.             As a result of these discussions the site remained unmarketed and officers have moved forward with two further pieces of work. Firstly with the initial work required to develop a contextual master plan for the island and, secondly, with consideration of the marketing options available for Nell’s Point.

5.             Following a procurement exercise in August 2011 consultants, LDP / Collins Leisure, were appointed with a remit of providing a further report on Nell’s Point. The remit for Humberts had been to consider the tourism and leisure markets and to suggest a range of end users that might be pursued. The remit for the LDP report was to give such consideration but also provide an in depth business case proposal, considering factors such as site development cost, operational cost and possible income generation for a range of uses to provide the basis for consideration of gap funding requirements and the approach to be taken when interacting with the tourism investment market. Following acceptance of the Stage 1 report in March 2012 LDP have completed their work and the stage 2 report proposes a range of solutions as set out in the final report and summarised in Appendix A

6.             An update report was provided to Cabinet on the 21st July 2012. It was noted that an imminent presentation of the work of LDP / CLC to the Barry Regeneration Area Partnership Board (BRAPB), Cabinet and the relevant Scrutiny Committee would be made and would allow the Council an opportunity to consider the findings of the consultants and whether or not these findings should inform and feed into the Master Plan for the Island as well as to inform the future work of the Barry Regeneration Area Partnership Board and any subsequent regeneration initiatives.

7.             The Cabinet Member informed the meeting that the next meeting of the Board had been brought forward from its original scheduled date later in the year to the beginning of September 2012.  This meeting would receive a presentation from LDP/ CLC and to discuss their draft executive summary report on potential options for the site.

8.             The BRAPB met on the 11th September 2012 to consider the LDP report and following detailed discussions with LDP / Collins concluded that, notwithstanding the funding deadlines imposed upon the BRAPB, it still wished to pursue this strategic project.

Relevant Issues and Options

9.             The Final report from LDP / Collins has been deposited in the Members Room. Given the size of the report as well as its complexity and detail LDP have reviewed its content and summarised the content and conclusions. The background to the report and an executive summary of the LDP report is attached to this report as Appendix A.

10.        The LDP consultancy Stage 1 report sets out an analysis of the factors which the tourism/leisure investment markets would need to consider before considering any marketing option for Nell’s Point put forward by the Council. Their conclusions in the Stage 2 report, based upon their defined methodology, their contacts and knowledge of the tourism industry, are that a mixed use development comprising an aquarium, family activity centre and a centralised hub for related activity, food and supporting facilities is the preferred way forward. A stage 3 process indicating the vehicle for delivery and the process by which the Council, or consultants acting our behalf, might market, review options and negotiate grant and lease terms would follow from the decisions made in respect of this report and have not yet been defined.

11.        The LDP report concluded that a mixed development including a family activity centre linked to a destination attraction such as an aquarium and a “blackbox” or support accommodation (toilets, eateries, etc.) is the solution that would most marketable given the analysis.

12.        The analysis provided by the full report considered financial requirements for each of the proposals and provided sets of figures relating to both the operational set up costs related to the options and 15 year projections for cashflow and profit and loss accounts (based upon benchmarking and their methodology). This approach resulted in an indication of fairly significant gap funding being suggested to be provided in 2013-14.  Members should note that this figure is not based upon any specific, costed or designed development scheme but on the baseline data provided via the LDP model as can be seen in the detailed report in the Members' Room.

From the funding perspective Members will be aware that the Capital Programme and Medium Term Financial Plan make no provision for the provision of what may be significant gap funding for a Nell’s Point development. The recommendation to proceed is based upon the need to define what the level of gap funding might be and to allow a discussion as to what financial vehicle might be required to take forward the proposal given the need to consider both Section 123 requirements and state aid rules. With respect to funding the LDP report makes no reference to the two specific factors which might impinge upon the gap funding requirement.

13.        With reference to parking provision the LDP report suggests a car park to accommodate 254 vehicles on site might be required but does not provide for the capital construction costs of the car park within the gap funding suggested. Any negotiations with end users will need to consider parking provision, procurement and delivery.

14.        The other element to consider is the value of the landholding to be considered under any lease terms and how its value might offset the level of grant required as public sector grant funding. Land valuation in this respect might follow an outline approval for the preferred option being put forward by LDP but, in the end, the value will be as perceived by developers and will consider both standard and any abnormal development costs. Members will recall that the clearance of the site was at surface levels and below ground services might still remain.

15.        In order to progress matters Members need to be satisfied with the principle of the proposals included within the LDP report. If satisfied, officers would feed the proposed uses and likely programme for Nell’s Point into the master plan document being prepared for the wider Barry Island and the Council would go out to consultation on that plan.

16.        To progress the Nell’s Point scheme as advised by LDP the Council would need to consider the appointment of consultants to take forward the Stage 3 element of the programme as indicated above. Consideration needs to be given in this respect to the conclusion date associated with the Barry Regeneration Area which is currently March 2014.

17.        To progress the Nell’s Point scheme as advised by LDP the Council would need to consider the appointment of consultants to take forward the Stage 3 element of the programme as indicated above. Consideration needs to be given in this respect to the conclusion date associated with the Barry Regeneration Area which is currently March 2014.

Resource Implications (Financial and Employment)

18.        It is assumed that the Project Management Unit will continue to lead on the co-ordination of this project and that PMU fees will be met via the Barry regeneration budget. It is assumed that the Stage 3 Consultancy costs will be met from the same budget. An agreement to exempt the process from the standard procurement process and financial regulations would be required, if following the drafting of the consultancy brief, it is considered that LDP / Collins are best placed to take forward the process, given the work undertaken to date.

19.        It is estimated that the consultancy fees for stage 3 would amount to a sum in the region of £20k for the detailed master planning and concept planning.  Fees of no more than a total of £10k would be applicable for subsequent detailed negotiations and related work.  All the work expected of the successful consultant would be detailed in the Consultancy Brief.

Sustainability and Climate Change Implications

20.        The beneficial re-use of the Nell's Point site for leisure purposes will constitute a sustainable use of a vacant site with wide ranging benefits, including adding to the leisure offer of Barry island, thereby assisting in sustaining local businesses’. The site is also well placed in relation to the adjacent railway station, resulting in the site being accessible by public transport.  The relationship to the existing facilities also results in the potential for mixed trips throughout the year.  The sustainability credentials of any future development proposal would be evaluated through the development and planning processes.

Legal Implications (to Include Human Rights Implications)

21.        Procurement of the services referred to at recommendation 4 without an open competition could lead to (albeit a minor risk) a challenge by others who might have bid for that work. 

22.        Any ultimate disposal of land would have to comply with the provisions of S123 of the Local Government Act 1972 in relation to best consideration.  

23.        Depending on the nature of the ultimate arrangement entered into there may be State Aid considerations to be resolved.

Crime and Disorder Implications

24.        There are no specific Crime and Disorder implications relating to this report, although the provision of family based attractions can contribute positively to reducing crime and disorder.

Equal Opportunities Implications (to include Welsh Language issues)

25.        There are no Equal Opportunity Implications directly relevant to this report, although the provision of new facilities can reach out top all sectors of the community in due course.

Corporate/Service Objectives

26.        The development would contribute to an objective in the Corporate Plan under R12 which seeks the implementation of a strategy for Tourism, marketing and events to encourage visitors to the vale and job creation.  The beneficial re-use of the site will also link positively to regeneration.

Policy Framework and Budget

27.        This report is a matter for Executive decision by the Cabinet.

Consultation (including Ward Member Consultation)

28.        Local ward members have been notified of the report and any comments will be reported in due course.

Relevant Scrutiny Committee

29.        Economy and Environment.

Background Papers

None

 

Contact Officer

John Dent - Major Projects Manager. Project Management Unit - Tel: 01446 704673.

 

Officers Consulted

Director of Finance, ICT and Property

Operational Manager, Legal Services

Operational Manager of Countryside and Economic Projects

 

Responsible Officer:

Rob Thomas, Director of Development Services

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