East Devon District Council meeting on 25 July 2018
Agenda
Item No 8
Question
1: Procedure Rule 9.2 to the Leader from Councillor Booth
“Can the Leader or CEO please explain why the council were
so willing to drop the mixed use development
for the Port Royal site from the Local Plan, following the consultant's report
in January 2018, which is in stark comparison to how tenaciously the council
has stuck to their plans for sale or development of other sites such as at
Knowle and in Exmouth?”.
Answer:
As
was reported to members of both East Devon District and Sidmouth Town Councils
in February this year, the viability of a more extensive development of Port
Royal was challenged on multiple counts of flood risk, financial viability and
covenant uncertainty. Therefore, both councils agreed that they should focus on
the most pressing and possible opportunities which were the Drill Hall and, for
Sidmouth Town Council, the Fishermen’s shed and fish shop area. To me that
seems like an innovative and, dare I say, tenacious approach.
This
is not to say that other development for Port Royal may not come forward and it
is a cause for optimism to think that a high quality redevelopment of the Drill
Hall site could well generate interest in surrounding improvements at later
dates.
It’s
good that we can agree that this is a tenacious council and one that doesn’t
shy away from making good things happen whether it is the progressive phased
improvement to Exmouth’s seafront or the strategic savings and improved services
that our relocation is bringing about.
Question
2: Procedure Rule 9.2 to the Leader from Councillor Rixson
“Agents
are motivated to sell property based on the nature of their fee or commission
structure. Is JLL going to be paid on a fixed fee, on a percentage basis
related to the final sum achieved for the Drill Hall, or is the contract not
yet finalised?”
Answer:
The
detail of contract is a confidential matter between the council and JLL. A
standard approach would be a combination of fixed fee and percentage but it is
the council that will decide on the best bid from those we receive and we will
consider both price and quality in that decision.
Question
3: Procedure Rule 9.2 to the Leader from Councillor Rixson
“Have
any independent or EDDC surveys on the condition or structural integrity of the
Drill Hall been carried out at all at any point since the council took it over
from Wessex Cadets in 2012 and before it went on the market to community
organisations this June?”
With
the advice of our agents we will make appropriate information available to
interested parties. It is up to any potential bidders to satisfy themselves of
the condition of the building and factor their findings into their plan and
proposals.
Now
that we are in a formal process that is potentially open to challenge, such
questions should be directed to our agents since they are our experts in these
matters and they can ensure that all potential and actual bidders receive the
same information.
Question
4: Procedure Rule 9.2 to the Leader from Councillor Rixson
“Has
a Red Book valuation been obtained for the Drill Hall and will this be used as
the guide price or will the process be by sealed bids, offers over or some
other terms?”
Answer:
I
refer to the answer from the previous question.
Question
5: Procedure Rule 9.2 to the Portfolio Holder for Asset Management from
Councillor Rixson
“What
criteria will be used to determine who the successful bidder for the Drill Hall
will be and will members of the Asset Management Forum set these criteria?”
Answer:
The
core group of East Devon and Sidmouth Town Councils will work with JLL to
ensure a rigorous and even consideration of bids, giving both member, officer
and professional input to the outcome. JLL are advising on criteria and what
information should be made available to bidders the assist their preparations.
The
core group’s work will be supported by professional officers of the council who
will report
to
me as Portfolio Holder and Chair of AMF. I may then ask for the report to be
taken to AMF itself or direct to Cabinet.
Question
6: Procedure Rule 9.2 to the Leader from Councillor Gardner
“EDDC
appointed JLL to sell the Drill Hall, yet their website focuses on their
expertise as property finders for clients, not as sales agents and they do not
quote any experience of selling public assets for local authorities (although
they have of course already sold at least one asset for EDDC). Given that there
are many commercial property agents to choose from with wider sales expertise,
why did JLL make the shortlist for EDDC in the first place and why was no
effort put in to secure an agent that does not have major potential purchasers
of the Drill Hall as clients?”
Answer:
On
their website you may have missed JLL’s advice that they worked with 250 public
sector clients last year. Also, it’s unfortunate that you weren’t able to be at
Overview Committee on 13 March this year where JLL sat with the committee and
explained in detail to your fellow councillors all about their extensive
partnership work with local authorities. The minutes and a link to JLL’s
presentation were sent to you and other members.
JLL were appointed to the Drill Hall commission
by a group made up of councillors from East Devon and Sidmouth Town Councils
with advice from EDDC officers and the Sidmouth Town Clerk. JLL are an
experienced and multi-skilled company well versed in marketing and managing
land and property sales and are also locally based so understand the local
market. It is entirely reasonable and appropriate that they were among the
companies invited to pitch for the role.
Furthermore,
we would expect property agents worth their while to have good contacts among
relevant investors. That may include having specific clients who the agent, in
this case JLL, are open and transparent about. An agent that did not have links
to potential investors wouldn’t be a very good agent.
Question
7: Procedure Rule 9.2 to the Leader from Councillor Gardner
“Did
you consider the impression it would make to the public to select JLL as the
sales agent for the Drill Hall, given that they act for Whitbread, handled the
sale of Elizabeth Hall in Exmouth for EDDC to their client Whitbread for
Premier Inn and were also involved in the selection of Morai (now dropped) as
preferred developer for Queens Drive for EDDC?”
Answer:
The
Premier Inn in Exmouth created 40 local jobs where there were none before and a
60 bed hotel that is hugely popular with visitors who then spend their time and
money in our fair town of Exmouth. We reinvested receipts from that land sale
back into Exmouth through the new Mamhead Slipway to re-establish Exmouth as a
centre of maritime leisure. This is regeneration at work.
It
is only a part of the story to pick on the development proposed by Morai Capital
which the Council subsequently brought to an end. Perhaps we should be more
positive and celebrate JLL and their marketing of the Exmouth Queens Drive site
that has succeeded in bringing a unique and much anticipated Watersports Centre
to Exmouth seafront. The Centre will be a community owned asset and able to
reinvest in community benefits for the town. JLL did well. The Watersports
Centre is the investment that will be delivered and that will be the impression
that lasts.
Question
8: Procedure Rule 9.2 to the Leader from Councillor Gardner
“Those
responsible for appointing JLL to sell the Drill Hall are aware that JLL has
Whitbread as a client and that John Kinsey, the person liaising with potential
bidders, is the same person who, according to JLLs website, actively searches
for sites for Premier Inn. This surely represents a serious conflict of
interest. Did you not consider it would be more prudent to prevent the
possibility for sharing of highly sensitive information, both from this Council
to a potential bidder and from other bidders to Whitbread via JLL?”
Answer:
This
question seems to be premised on a fundamental misunderstanding of the
relationship of agent and client. JLL’s commitment is to seek out and bring
forward the best proposals they can for the councils to consider whether those
bids are community or commercial. JLL has a client base that it seeks sites for
and they are open about that. Their marketing work reaches a broad range of
potential investors and developers.
JLL
are also professional and scrupulous in their protection of privileged
information in the process. I would hope that this question is not suggesting
otherwise since that would cast aspersions toward our agents which they might
reasonably take issue with.
Question 9: Procedure Rule 9.2 to the Leader from Councillor
Gardner
“The
press release announcing the commencement of the marketing of the Drill Hall
was issued about one month before any sales materials are apparently going to
be made available to potential community bidders. With no guide price, terms of
sale, access for a survey or written materials of any kind, the initiation of ‘marketing’
was surely an illusion. Will the three-month exclusivity period for community
bids be restarted and the closing date extended once all the essential
information is available?”
Answer:
Advising
Sidmouth and its community that agents had been appointed and encouraging bid
preparation at the earliest opportunity is a good thing bearing in mind the
importance of the Drill Hall site and local interest in its successful
redevelopment.
I
understand that at least one surveyor has already been given access to the
building on behalf of a community interest and our agents are arranging another
opportunity. JLL advise that this week there will be guidance given by them for
any parties thinking about a community based bid and they are in correspondence
with some interests already. The three month period will start with the issue
of guidance. I think it is also important to point out that bidders, community
and then commercial, will be expected to carry out work themselves in the
preparation of their bids according to the guidance from JLL. We will take our
advice from our professional advisers as to what we should reasonably expect
the council to provide and what work bidders should be doing on their own
behalf.
