To receive a written update.

The Committee received a written update.

A Member started the discussion with the following questions:

In terms of the Development Agreement, what information was being awaited from Spirit? 

As the deadline was the end of November 2017, was it getting a bit late?

Was there any movement to the developer option to use the car parks for housing and when did the option run out?

The Chief Financial Officer outlined some key issues.  He stated that the Section 278 and land transfers were difficult to resolve.  He acknowledged that it was getting late, but that this was not unusual for this type of development.  With the housing, he stated that he would find out more information for Members.

Construction - How far behind schedule were the works to St. Michael’s Road, Sittingbourne?

Communications – when was Spirit’s website going to be updated?

What was the potential impact on the whole regeneration of Tesco shutting its Forum store?

The Chief Financial Officer explained that Tesco had been losing money from the Forum store.  Another retailer would be moving in.  He explained that there was no direct effect of this on the regeneration plans, and that Tesco were still looking to sell the Forum.

A Member reported that Spirit’s website had shown that the roadworks (Phase 1) would be completed by 20 November 2017.

Members made further comments which included:  there needed to be analysis of risks on regular updates and a timeline of the critical path; the report attached to the agenda needed to be more detailed; risks were self-evident, this was a major investment, and the income returns might not be sufficient.

The Chief Financial Officer stated that there were wider risks than solely financial risks, and the works were in different phases.  He explained that the retail was a fixed price, and had moved past the speculative stage.  With the leisure project, once this had been signed-up, the risks were there as a complicated build.  There was a fixed price, with long leases.  Performance-wise, the whole development was in ‘amber’, but if the leisure part was signed by the end of the month, this could go to ‘green’.  The risks were transferred risks, to Spirit and their builders.

In response, Members made the following further comments:  needed to recognise that if part of the project was late, it would have a knock-on effect to other parts of the scheme; the risks locked into delivering each phase at a particular sequence; we requested a critical path and risk register and had not received them; confident that the risks were being mitigated at each stage, but the nature of some risks could not be mitigated;  would like to see a list of the risks – mitigated or not, and made aware of the risks that could not be mitigated; we requested a continuous update of the risks and this had not been received.

The Chief Financial Officer explained that there were constant meetings on the regeneration, and it was not possible to replicate these meetings at Scrutiny.  He acknowledged that it was difficult to get the balance right, and the right level of information was needed for the Scrutiny Committee to take assurance of the process.

Was the development all ‘wrapped up’?  Wanted to be satisfied that all cinema, restaurant, hotel chain were all fully signed-up or did they have options of coming into the project in the future?  There was a risk if not fully signed-up because then the project would not get completed.  These latest questions were not answered at the meeting, and it was requested that a report from the Cabinet Member for Regeneration and the Interim Director of Regeneration be submitted to the Scrutiny Committee, including a critical path and risk register.

The Chairman reminded Members that there was a briefing on Phase 2 of the regeneration scheme, prior to the Council meeting on 13 December 2017.

Resolved:

(1)          That a report from the Cabinet Member for Regeneration and the Interim Director of Regeneration be submitted to the Scrutiny Committee, including a critical path and risk register.