Decision Maker: Cabinet
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: Yes
The Cabinet considered a report of the Deputy Chief Executive and Executive Director (Finance and Resources) proposing a financial and commercial structure to enable the delivery of the Seaway Leisure development whilst also providing greater ownership and an improved, long-term sustainable commercial return for the Council.
1. That the significant economic benefits that the proposed Seaway Leisure development will bring as outlined in the approved 25 February 2020 Cabinet report and that the project is a clear Council commitment and a Southend 2050 Roadmap project, be noted.
2. That it be noted that the Council has commissioned CBRE to undertake a review of the development, specifically in relation to the elements at a) to c) below:
a) Undertake financial due diligence on Turnstone Estates Ltd (and its company structure, including Turnstone Southend Ltd, the subsidiary special purpose vehicle for Seaway Leisure) and to advise on their suitability as a partner for the Council;
b) Review the proposed Seaway development and its appropriateness including reviewing the anticipated economic benefits; and
c) Look at the most suitable and deliverable funding models for the development and consider the risks and benefits associated with them.
3. That officers proceed with the final negotiations of terms with Turnstone Southend Limited (TSL), and Turnstone Estates Ltd (as parent company guarantor as appropriate) to enable the proposition to be presented to the funding market on the basis set out in sections 7.12 to 7.15 of the submitted report and at the same time proceed to secure the necessary legal and financial advice on those terms to robustly protect the Council’s position.
4. That it be noted that officers will update terms with Homes England in relation to the grant funding associated with the Rossi Factory, 1-3 and 29 Herbert Grove, having regard to the proposed revisions.
5. That it be noted that officers will look to identify grant funding opportunities which enable the Council’s proposed equity investment to be reduced and/or replaced with grant funding.
6. That authority be delegated to the Executive Director (Finance and Resources), in consultation with the Leader of the Council and the Cabinet Member for Corporate Services and Performance Delivery, to:
a) approach the market for funding at the relevant time;
b) finalise and agree (with independent advice as required) any final terms following responses to the proposition from the funding market; and
c) authorise any relevant actions including the execution of all necessary documentation including that arising from the decisions in 2 to 5 above and recommendation 8 below.
Reasons for decisions:
1. The benefits of the proposed development have been clearly stated in preceding papers to Cabinet. Cabinet has clearly articulated its wish to see more leisure, culture, and tourism in the Town and to actively support the economic recovery of the Town, particularly the town centre.
2. The approach set out in the report enables the Council to apply a small proportion of its capital reserves to de-risk this major development and give it the required support to enable delivery of the project with a fully balanced risk and reward approach.
As set out in the submitted report.
Note: This is an Executive Function save that the recommendation in 8 above constitutes a Council Function.
Eligible for call-in to: Policy and Resources Scrutiny Committee
Cabinet Members: Cllr Gilbert and Cllr Collins
Report author: Alan Richards
Publication date: 05/11/2021
Date of decision: 02/11/2021
Decided at meeting: 02/11/2021 - Cabinet
Effective from: 13/11/2021
This decision has been called in by:
- Councillor Tony Cox who writes for consideration by Policy & Resources Scrutiny Committee"
- Councillor Meg Davidson who writes for consideration by Policy & Resources Scrutiny Committee"
- Report of Deputy CEx and Exec Director (Finance and Resources) PDF 693 KB
- Appendix 1 - Review of Turnstone Estates as a counterparty PDF 820 KB
- Appendix 2 - Review of Seaway Leisure and Economic Benefits PDF 792 KB
- Appendix 3 - Financial Risks PDF 818 KB
- Appendix 4- Statements from Anchor Tenants PDF 609 KB
- Appendix 5 - Comparable Schemes PDF 1 MB