Agenda item

RESOLVED:

1.1.         To approve that the Council enter into a Headlease with Regen Capital or an associated entity for 125 years of 85 units at the RCG development as detailed in this report, with lease payments over 50 years but with a 2 year rent free period at the start of the term of the Headlease and the option to buy the freehold interest for a £1 at the end of the 50th year of the term of the Headlease and to delegate authority to the Corporate Director of Housing in consultation with the Corporate Director of Resources, Lead Member for Finance and Lead Member for Housing to enter into final agreements subject to final financial and legal due diligence.

1.2.         To approve that the Council enter into an Underlease with Mears or one of its subsidiaries for 10 years of 85 units at the RCG development as detailed in Sections 5 and 6 of this report and delegate authority to the Corporate Director of Housing in consultation with Corporate Director of Resources, Lead Member for Finance and Lead Member for Housing to enter into final agreements subject to final legal due  diligence.

1.3.         To note that the proposal set out in this report can only progress once final funding is confirmed by Regen Capital, which is subject to financial funding rates and macroeconomic conditions that will be prevalent on the day of completion.

1.4.         To delegate authority to the Corporate Director of Housing, in consultation with Corporate Director of Resources, the Executive Mayor, Lead Member for Finance and Lead Member for Housing, to renegotiate terms of the Headlease or Underlease, should this be required due to macroeconomic conditions prior to completion, but not to deviate by more than £2.00m from reported benefits of this proposal as set out within this report.

1.5.         To note that the Council will receive 85 affordable housing units subject to the approval by the Council’s Local Planning Authority to a variation of the existing S106 Planning Agreement, to provide much needed affordable homes which are currently being sourced from the private rental market at a premium.

1.6.         To note subject to Recommendation 2.3 that the Council will hold 100% Nomination rights for all 85 affordable units for the period of the lease as (originally) required under the S106 Agreement entered into between the Council’s planning authority and Brick by Brick Croydon Ltd, the developer (BBB).

The Executive Mayor introduced the Lease Acquisition and Underlease Disposal at RedClover Gardens report, which provided details of a proposal to enter into a Headlease with Regen Capital for 85 units and subsequently underlease the units to a Registered Provider (RP) subsidiary of Mears Group to provide effective housing. The report further provided detailed examination of Regen’s Capital’s proposal, including an explanation of the financial benefits and the various options that were available to the Council when selecting an underlease.

This item included additional confidential information.

The Cabinet Member for Finance, Councillor Jason Cummings, shared with Cabinet of the opportunity for ongoing savings and ability to receive capital receipting via brick by brick. With the complications, there were no set up of separate companies, this was a more standard set up to produce a good end result for council and residents in temporary accommodation to being more suitable permanent homes.

The Deputy Mayor and Cabinet Member for Homes, Councillor Lynne Hale, acknowledged the arrangement that the council would receive 85 affordable homes of 1 – 3 bedrooms properties.

The Shadow Cabinet Member for Finance, Councillor Callton Young, welcomed the paper and recommendations which was detailed well.

The Executive Mayor in Cabinet RESOLVED:

1.1.         To approve that the Council enter into a Headlease with Regen Capital or an associated entity for 125 years of 85 units at the RCG development as detailed in this report, with lease payments over 50 years but with a 2 year rent free period at the start of the term of the Headlease and the option to buy the freehold interest for a £1 at the end of the 50th year of the term of the Headlease and to delegate authority to the Corporate Director of Housing in consultation with the Corporate Director of Resources, Lead Member for Finance and Lead Member for Housing to enter into final agreements subject to final financial and legal due diligence.

1.2.         To approve that the Council enter into an Underlease with Mears or one of its subsidiaries for 10 years of 85 units at the RCG development as detailed in Sections 5 and 6 of this report and delegate authority to the Corporate Director of Housing in consultation with Corporate Director of Resources, Lead Member for Finance and Lead Member for Housing to enter into final agreements subject to final legal due diligence.

1.3.         To note that the proposal set out in this report can only progress once final funding is confirmed by Regen Capital, which is subject to financial funding rates and macroeconomic conditions that will be prevalent on the day of completion.

1.4.         To delegate authority to the Corporate Director of Housing, in consultation with Corporate Director of Resources, the Executive Mayor, Lead Member for Finance and Lead Member for Housing, to renegotiate terms of the Headlease or Underlease, should this be required due to macroeconomic conditions prior to completion, but not to deviate by more than £2.00m from reported benefits of this proposal as set out within this report.

1.5.         To note that the Council will receive 85 affordable housing units subject to the approval by the Council’s Local Planning Authority to a variation of the existing S106 Planning Agreement, to provide much needed affordable homes which are currently being sourced from the private rental market at a premium.

1.6.         To note subject to Recommendation 1.3 that the Council will hold 100% Nomination rights for all 85 affordable units for the period of the lease as (originally) required under the S106 Agreement entered into between the Council’s planning authority and Brick by Brick Croydon Ltd, the developer (BBB).