Issue - meetings

To consider a confidential report by Councillor Hugh Evans, Leader and Lead Member for the Economy (copy enclosed) on the funding model.

RESOLVED that Cabinet approve in principle, subject to final negotiation and legal agreement, the proposal set out to enter into lease agreements to support the development of a 73 bedroom hotel, pub and restaurant as part of the Rhyl Waterfront regeneration scheme.  Specifically to approve in principle –

-       that the council undertake back to back leasing agreements for 25 years to support the development of a 73 bedroom hotel, family pub and restaurant on the Rhyl Waterfront, subject to final agreement and receipt thereafter of a profit rent rising with RPI inflation every five years

-       to delegate authority to complete the final negotiations to the Section 151 Officer and Monitoring Officer, with the final agreement to be approved by the Leader of the Council (as portfolio holder), assuming that the final agreement is not materially worse than the terms set out in this report

-       to agree to the transfer of the freehold site at no cost and for the developer to offset the estimated value of the capital receipt resulting from the sale of the pub/restaurant against the cost of developing the entire site and the hotel

-       to agree to the establishment of a reserve into which the profit rent will initially be placed.  This will accrue funds that could be used to mitigate the council’s future financial risk.  The reserve will be reviewed periodically by the S.151 Officer who will make recommendations about its future use.

Councillor Hugh Evans presented the confidential report regarding the proposed funding model for Phase 1b of the Rhyl Waterfront Development.

Cabinet was advised of the intensive and ongoing discussions regarding the development and the reasoning behind changes to the original proposals in light of the loss of confidence in property investment following the EU referendum result.  It was not a risk free approach and the risks had been clearly set out in the report together with measures to mitigate those risks.  However the proposal was considered the only viable option open to the council to take forward that phase of the development.  Cabinet raised questions regarding both the legalities of the proposal and financial risks in order to satisfy themselves that the proposal represented the best way forward in this case given the extent of risk to the authority and suggested measures to offset those risks.  During consideration of the recommendations it was agreed to remove the reference to the profit rent figure.

RESOLVED that Cabinet approve in principle, subject to final negotiation and legal agreement, the proposal set out to enter into lease agreements to support the development of a 73 bedroom hotel, pub and restaurant as part of the Rhyl Waterfront regeneration scheme.  Specifically to approve in principle –

-       that the council undertake back to back leasing agreements for 25 years to support the development of a 73 bedroom hotel, family pub and restaurant on the Rhyl Waterfront, subject to final agreement and receipt thereafter of a profit rent rising with RPI inflation every five years

-       to delegate authority to complete the final negotiations to the Section 151 Officer and Monitoring Officer, with the final agreement to be approved by the Leader of the Council (as portfolio holder), assuming that the final agreement is not materially worse than the terms set out in this report

-       to agree to the transfer of the freehold site at no cost and for the developer to offset the estimated value of the capital receipt resulting from the sale of the pub/restaurant against the cost of developing the entire site and the hotel

-       to agree to the establishment of a reserve into which the profit rent will initially be placed.  This will accrue funds that could be used to mitigate the council’s future financial risk.  The reserve will be reviewed periodically by the S.151 Officer who will make recommendations about its future use.

The meeting concluded at 1.15 p.m.