Agenda item

(Legal & Estates Portfolio Holder) To consider the attached report (C-025-2010/11).

(1)        That the right of pre-emption in respect of the land shown edged thick black on Plan A (attached at Appendix 1 of the report) and edged thick black on Plan C (attached at Appendix 3 of the report), which are part of Epping Forest College, be recommended to the Council for unconditional release; 

(2)        That the full release of the covenant which restricts the use of the land shown edged thick black on Plan A, in return for a side-letter or words in the deed of release with respect to the College providing replacement sports facilities when their funding situation allowed, be recommended to the Council for approval;

(3)        That the delegation of authority to the Director of Corporate Support Services, in consultation with the Portfolio Holder for Legal and Estates, to negotiate any reasonable variation to the covenant restricting the use of the land shown edged thick black on Plan C be recommended to the Council for approval; and

(4)        That the delegation of authority to the Director of Corporate Support Services to agree minor variations to the new covenants, as required, be recommended to the Council for approval.

The Portfolio Holder for Legal & Estates presented a report upon the release of certain restrictive covenants at Epping Forest College in Loughton.

The Portfolio Holder reported that the Council had previously agreed the variation of the restrictive covenants and the release of the right of pre-emption in respect of the Loughton Hall Site, which previously had formed part of the College site. These same provisions affected the land which adjoined the Loughton Hall. The College now wished to sell this land and had requested that the current restrictions on use be changed to allow residential care or nursing home development and/or an education use.  The College had also asked that the Council’s option to purchase the land at full market value (a right of pre?emption) each time the property was sold be released.  The College authorities had stated that they intended to provide sports facilities on a different area of land owned by the College at Borders Lane, and that the local community would have access, when funding became available.

The Portfolio Holder added that the covenant could be released without replacement, or authority could be delegated to the Portfolio Holder, however concerns had previously been expressed by the Members of Area Plans Sub-Committee South about the possible release of the covenant. The report had also suggested the release of the covenant in return for a side-letter or words in the deed of release about the College providing sporting facilities in the future when funding allowed.

Local Ward Members welcomed the suggestion of a side-letter in return for the release of the covenant, and urged the Cabinet to also release the Council’s right of pre-emption. The Portfolio Holder offered a revised recommendation whereby the Covenant would be released in return for a side-letter or words in the deed of release. Authority was also delegated to the Director of Corporate Support Services to agree minor variations to the legal documents so as not to unduly delay the process.

Decision:

(1)        That the right of pre-emption in respect of the land shown edged thick black on Plan A (attached at Appendix 1 of the report) and edged thick black on Plan C (attached at Appendix 3 of the report), which are part of Epping Forest College, be recommended to the Council for unconditional release; 

(2)        That the full release of the covenant which restricts the use of the land shown edged thick black on Plan A, in return for a side-letter or words in the deed of release with respect to the College providing replacement sports facilities when their funding situation allowed, be recommended to the Council for approval;

(3)        That the delegation of authority to the Director of Corporate Support Services, in consultation with the Portfolio Holder for Legal and Estates, to negotiate any reasonable variation to the covenant restricting the use of the land shown edged thick black on Plan C be recommended to the Council for approval; and

(4)        That the delegation of authority to the Director of Corporate Support Services to agree minor variations to the new covenants, as required, be recommended to the Council for approval.

Reasons for Decision:

The Council’s right of pre-emption gave it the option to purchase the land at full market value whenever it was put up for sale.  The covenants for use were very restrictive.  The combination of these provisions made it very difficult for the College to sell and greatly affected the value of the land. If the Council agreed to the release of the restrictive user clauses then it would enable the College to gain a better financial footing, which might facilitate the building of new sports facilities in the future.

Other Options Considered and Rejected:

To not agree to the variation of the restrictive covenant as to use and to not release the right of pre-emption. However, the College could apply to the Lands Tribunal for the restrictive covenants to be released, which was likely, whilst the College could still sell the land if the Council refused to purchase, although this could affect any premium the College could expect to receive for the land.

To agree to the variation of the restrictive covenant as to use and to make the release of the right of pre-emption conditional upon the building of the sports facilities. However, this would again affect the value of the land.

To require the College to enter into a separate agreement that it would construct the alternative sports facilities within a time limit. However, the College would not agree to this.