Decision details

Proposed purchase of Head Lease.

The Portfolio Holder for Asset Management & Economic Development presented a report on the purchase of the leasehold interest in 2-8 Torrington Drive in Debden.

The Portfolio Holder reported that the site at Torrington Drive in Debden had been monitored for some time by the Asset Management Coordinating Group as the Council was the freehold owner. Torrington Drive Ltd, a subsidiary of Stobart Properties owned the Head Lease of 125 years from 31 May 1988 with an unexpired term of 99 years. An opportunity had arisen for the Council to purchase the Head Lease for £3.35million, plus Stamp Duty at 4% - £134,000. The Portfolio Holder outlined the detailed negotiations and the expert opinion of the Council’s external consultants, Bidwells LLP. The benefits to the Council of acquiring the asset was set out and it was considered that this deal would represent very good value for the Council.

Decision:

(1)        That a supplementary capital estimate in the sum of £3.484million, including stamp duty land tax, for the purchase of the long leasehold Head Lease interest of 2 - 8 Torrington Drive, Debden including the Sainsbury store, car park and 0.121 acre car park in Burton Road, be recommended to the Council for approval.

Reasons for Decision:

The acquisition of the Head Lease would provide the Council with a valuable addition to its property portfolio and provide additional income.

As freehold owners of the site and freehold owners of the adjoining petrol station site the Council would be able to consider redevelopment of both sites in the future in accordance with the regeneration Design Brief approved by the Council in 2008 - subject to the sub-lease agreed with Sainsbury and the terms of the lease of the petrol station.

Other Options Considered and Rejected:

To not purchase the site and future redevelopment would therefore have to be agreed with the Head Lease owner at an appropriate time in the future. This would not give the Council the control of the site and it would adversely impact on the likelihood of securing and influencing the regeneration of the larger site.