Agenda item

(Finance, Performance Management and Corporate Support Services Portfolio Holder)  To consider the attached report (C/012/2007-08).

(1)        That the premises be let to Sprays Bakeries Limited on a lease for a term of up to 12 years for use as a bakers, on the terms reported by the Head of Legal, Administration and Estates;

(2)        That, in the event Sprays Bakeries Limited do not complete the lease, the premises be offered, subject to the receipt of satisfactory references, to Pithers of Barkingside also for use as a bakers; and

(3)        That Contract Standing Order C5 be waived in relation to contracts in excess of £20,000 in view of the special circumstances relating to the proposed letting.

The Finance, Performance Management and Corporate Support Services Portfolio Holder presented a report regarding the re-letting of Shop 15, The Broadway, Loughton. The shop had been let to Messrs Bulkan and Gersch on the terms of a twelve-year lease at a rent of £19,320 for use as a bakery. At Harrow County Court on 19 February 2007, the Council was granted a Possession Order for rent arrears in the sum of £17,198 plus Court costs; the Court Bailiff secured possession on 9 May 2007. The procedure for gaining possession and re-letting had been complicated by a receiver acting for a company called Mothers Kitchen Limited, which was the former tenant’s trading name, who had been seeking to sell the equipment at the premises. He had also approached the then Finance, Performance Management and Corporate Support Services Portfolio Holder to introduce two prospective tenants – Sprays Bakeries Ltd and Pithers of Barkingside – to continue the bakery business and offer a premium payment to the Council to offset part of the former tenant’s rent arrears. The Portfolio Holder had expressed a willingness to co-operate with the Receiver to achieve a re-letting of the premises for continued use as a bakers with minimal delay and secure a premium payment to offset the former tenant’s rent arrears.

The proposed rental of £20,300 per annum was consistent with other rental values at the Broadway Parade, established through open market lettings, negotiated rent reviews and lease renewals. Sprays Bakeries Limited were willing to pay a higher premium to secure the premises, and in support of their application they also drew attention to their good record as a longstanding tenant of a Council owned shop at Borders Lane, Loughton. The proposed letting by way of a restricted invitation to submit rental offers was a departure from the Council’s Contract Standing Orders. The current Portfolio Holder had expressed a preference for proceeding on the restricted invitation basis on this occasion in order to secure re-letting for use as a bakery with minimal delay. To proceed on this basis, Cabinet approval was required to waive Standing Order C5 relating to contracts in excess of £20,000.

            Decision:

(1)            That the premises be let to Sprays Bakeries Limited on a lease for a term of up to 12 years for use as a bakers, on the terms reported by the Head of Legal, Administration and Estates;

(2)            That, in the event Sprays Bakeries Limited do not complete the lease, the premises be offered, subject to the receipt of satisfactory references, to Pithers of Barkingside also for use as a bakers; and

(3)            That Contract Standing Order C5 be waived in relation to contracts in excess of £20,000 in view of the special circumstances relating to the proposed letting.

Reasons for Decision:

Co-operation with the receiver would achieve a re-letting of the premises for continued use as a bakers shop with minimal delay and would secure a premium payment to offset the former tenant’s arrears. As this involved a contract over £20,000, approval to waive the relevant Contract Standing Order was required due to the special circumstances involved.

Other Options Considered and Rejected:

To market the premises in accordance with an open market tendering procedure, providing interested parties with an opportunity to submit rental offers for the Council’s consideration.