The Cabinet Member for Regeneration and the Interim Director of Regeneration have been invited to attend.  Report to-follow.

The Vice-Chairman-in-the-Chair welcomed the Cabinet Member for Regeneration, the Deputy Cabinet Member for Regeneration, the Interim Director of Regeneration and the Head of Finance to the meeting.

The Cabinet Member for Regeneration thanked the Scrutiny Committee for their questions on the Sittingbourne Town Centre Regeneration, and explained that much of the information requested had been reported to previous meetings including Cabinet and Council meetings.  Members could view the reports and minutes of those meetings.  He added that work to demolish the old depot site had recently commenced.

The Chairman invited Members to ask questions.

Members sought clarification on the role of Essential Land as a silent partner and how much Swale Borough Council (SBC) could control the project.  The Cabinet Member referred to information contained in historical reports and advised that the project was not managed or controlled by SBC.  The Head of Finance added that U+I and Quinn Estates attended meetings, and he agreed to provide information on the guarantor position of Essential Land.

A discussion ensued which included the following points:

·        Further clarification on partners/consortium and their financial strength required;

·        what was Essential Land’s financial interest?;

·        clarification on the funding agreement and the awarding of the tender;

·        information referred to in historical reports should have been provided;

·        clarification on whether SBC were clients of Spirit of Sittingbourne or  the consortium partners (U+I and Quinn Estates);

·        suggestion that SBC should have an agent to oversee the scheme;

·        lack of financial detail and information in reports;

·        lack of information to hand; and

·        confusing terminology in the response to questions in the report.

In response, the Cabinet Member for Regeneration stressed that information had already been provided in previous reports and this could be provided by Democratic Services. The Council was a strategic partner in the scheme – it was not a Council-managed project in the traditional sense. The Head of Finance advised that Quinn Estates and U+I had financial liability for each other for the rental income as part of the Funding Agreement, and there was a guarantee on unlet restaurants for two years.  He added that the financial interest for Essential Land was a matter for the consortium, and that Quinn Estates and U+I were guarantors on any properties not rented on completion. He pointed out that only approximately 15% of the total rental income had not been signed up, two years in advance.

There was a discussion around the tender objective and the Cabinet Member for Regeneration stated that the purpose of the tender was initially to develop the centre of Sittingbourne, to bring more retail development and included the cinema and restaurants.  He added that 70% of the retail spend of Sittingbourne residents was outside Sittingbourne and the drive was to retain retail spend, create more jobs and a better experience for residents and visitors.  The Head of Finance said that initially SBC were not funding the project, but it was of financial benefit to invest, fund and own some of the retail and leisure assets.  The Interim Director of Regeneration clarified that Spirit of Sittingbourne were the consortium and there was no agent.  The Cabinet Member for Regeneration said that the Council had engaged advisers to assure and challenge decisions, and the Head of Finance added that professional advisors would be used when development commenced. 

It was noted by the Chairman that there had been minimal time, and it was resource intensive, to research responses to questions.  A Member reminded the Cabinet Member for Regeneration that questions were not always given in advance of meetings.

There was a discussion on the Development Agreement and the Cabinet Member for Regeneration advised that SBC did not have the capacity or skills to produce its own.  The Interim Director of Regeneration added that Spirit of Sittingbourne was responsible for delivering the project and tender, and although not part of the tendering process, SBC did make comments after the tender had been awarded.

A Member sought further detail on the response to question six and the Cabinet Member for Regeneration advised that progress on legal, financial and property, due diligence had been made.  The Head of Finance added that the decoupling of decisions on retail and leisure was currently being worked on, retail tenderers had been received, the funding agreement should be finalised by the Council’s advisors, Pinsent Masons, by the end of March 2017 and advisors Turnberry Estates were considering financial risks.

In response to a question from a Member on SBC’s objectives for the project, the Cabinet Member for Regeneration highlighted the following aims:

·        To encourage the 70% of residents that shop outside Sittingbourne to spend within Sittingbourne;

·        to improve retail facilities;

·        to improve leisure facilities;

·        to improve community cohesion and create better opportunities; and

·        to improve resources.

A Member asked if there was ongoing communication with Tesco and in the discussion that followed, the Interim Director of Regeneration confirmed communication in connection with The Forum car park was ongoing. The Cabinet Member for Regeneration advised that there had previously been a Cabinet report regarding the marketing of The Forum and the Head of Finance said he would raise the issue of the sale of The Forum at the next U+I meeting.  The Deputy Cabinet Member for Regeneration clarified the location of the car park.

In response to a question from a Member, the Cabinet Member for Regeneration advised that SBC were working with Kent County Council (KCC) Highways and Transportation and a communications plan should be developed within the next six weeks.  The Interim Director of Regeneration added that SBC were working with U+I to improve communication to residents on highways and utility works.

In response to a question from a Member, the Interim Director of Regeneration advised that, in accordance with the SELAP (South East Local Enterprise Partnership) funding agreement, some elements of the scheme needed to be committed by the end of March 2017, and some utilities work was imminent. She added that the highway design detail for the area in front of the station was being worked on.

There was a discussion on car park capacity, and the response to question ten, and the Cabinet Member for Regeneration referred to a previous Cabinet report.  Whilst information was continually changing, he agreed to provide the most recent figures there were for the estimated number of additional visitors per day expected, the parking agreement with Travel Lodge and Light, and an up-to-date plan of proposed development. The Deputy Cabinet Member for Regeneration advised that some data for car parks was provided within planning applications.

A Member raised concern, and asked for a detailed response, on the risk assessment carried out on the cinema, and highlighted risks which included the impact on surrounding restaurants if the cinema failed.  The Cabinet Member for Regeneration agreed to provide this information.  Another Member requested an updated Risk Register and Critical Path Analysis.  The Head of Finance reminded Members that it was already agreed at the Cabinet Meeting on 7 December 2016 that further due diligence would be carried out.

In response to a question from a Member relating to access to documents within the partnership, Democratic Services agreed to investigate and report back.

There was a discussion relating to the frequency of expected updates on the Sittingbourne Town Centre Regeneration at future Scrutiny Committee meetings, and the Cabinet Member for Regeneration was concerned at the tight deadlines and the burden this would place on officers whose primary role was to expedite the scheme.

The Chairman clarified the issues raised that required further response from the Cabinet Member for Regeneration:

·        The role of each partner in plain English;

·        what was the specific purpose of the silent partners?;

·        glossary of terms used including client partner/development partner;

·        who was expected to deliver the project?;

·        information on Risk Assessment dependencies;

·        footfall and car elements information; and

·        reports, plans and diagrams highlighted in the discussion.

The Chairman thanked the Cabinet Member for Regeneration, Deputy Cabinet Member for Regeneration, Interim Director of Regeneration and Head of Finance for their attendance.