Agenda item

To consider a report by the Head of Communication, Marketing and Leisure (copy enclosed) which considers the proposals for the redevelopment of the Prestatyn Nova Centre.

 

A copy of a report by the Head of Communication, Marketing and Leisure (HCML), which sought a decision by Council to approve the recommendation of the Strategic Investment Group to proceed with the redevelopment of the Nova Centre, Prestatyn, had been circulated prior to the meeting.  The Chair welcomed representatives of Alliance Leisure Services (ALS) to the meeting.

         

With the aid of a PowerPoint presentation the HCML introduced the report.  He explained that Cabinet had in January, 2014 considered the findings of a due diligence review into Clwyd Leisure Ltd (CLL), and concluded that it would be too great a risk to take over the company.  It was decided to cease funding CLL from the 1^st April, 2014, due to concerns over the quality and level of service provision, and CLL subsequently ceased trading with immediate effect.

 

A report to Cabinet in March, 2014 outlined the recommendations arising from a detailed appraisal of the building conditions and the cost benefit analysis in respect of the different interim management options for the facilities, whilst the business case for a much improved leisure offer on the coast was developed further.  Cabinet agreed to recommend that the Nova Centre remained closed pending agreement of the ALS redevelopment proposals in May, 2014.

 

A feasibility exercise and outline business case for the proposed redevelopment of the Centre had been commissioned for consideration by the Strategic Investment Group (SIG), and details of the process had been provided.  A feasibility and outline business case was presented to the SIG and Cabinet in June, 2014 to secure funding to take the project forward to detailed design.  Progression to the next stage, and the awarding of 108k for the detailed design stages in order to establish cost certainty for the project, had been approved.  ALS in partnership with Denbighshire completed all detailed surveys and provided the SIG with detailed costs based on a mix of facilities, as agreed in the original feasibility brief, Appendix 1.  Members were informed that the facility would be self-sufficient by servicing its own energy costs.

 

Detailed surveys identified issues which needed to be resolved to ensure the long term sustainability of the building for the term of the business case, based on known income potential, and the Councils financial commitment.  Mechanical and electrical plant required replacing, and a roofing survey identified a host of issues.  The increase in costs from outline to detail design stage represented a 15% increase in overall development costs.  This would be containable within the overall envelope of affordability over the business case term.

 

It was explained that the development was a major strand of the Council’s vision for an improved leisure and tourism offer along the coast, as set out in the Economic Ambition Strategy.  The BIG Plan 2011–2014 aimed to achieve a number of outcomes, particularly the desire for people in Denbighshire to have healthy lifestyles.

 

The costs pre-detailed design had been approximately £3.6 million.  The revised costs, due to the roofing and M&E requirements, had increased to £4,217,001.  Officers and the AL project team had been through a vigorous ‘value engineering process’ reviewing the costs and specification to reduce the costs without compromising the whole development.  The original business case identified a total of £256,311 to service the overall borrowing required for the development.  Due to an increase in capital required for the development, the prudential borrowing costs had increased to an annualised payment of £284,680, representing a total increase of £28,369 per annum.  This was confined within the affordability of the project and been fully considered and scrutinised by both the SIG and Coastal Facilities Board.  The HCML confirmed that the project was now at cost certainty and pending any requested changes to the scheme risks would be borne by ALS.

 

A budget forecast had been included in Appendix 2, with a financial commentary in Appendix 3, and a full financial statement from our Finance and Assurance Manager in Appendix 4.  The budget forecast indicated an operating loss in year 1 of £68,223, a loss of £6,447in year 2, and by year 3 a surplus of £11,785.  The Centre would have made a £23,440 operational loss over a five year period, over and above the resources available for the running of the facility, however this assumed only realising just over 70% of the overall latent demand.

 

In the event of the development not proceeding the building was likely to remain in its current condition until further options were explored, and the Centre would cost approximately £71,000 per year to maintain whilst closed.  This would take into account NNDR, security, repairs and maintenance, as set out in the options in Appendix 5, page 6 of the business case.   If the property was left in this condition permanently it would cost approximately £355,000 over the next five years.  Demolition costs were estimated at approximately £1M, and a detailed summary had been included.

 

In reply to questions from Members, it was explained that the business case, Appendix 5, had been scrutinised and approved by the SIG investment group and they had sufficient confidence to recommend to Council that the development of the Nova Centre proceed.  Prestatyn Town Council, the Coastal Board and Prestatyn Member Area Group had been consulted throughout the development stages.  Members expressed their appreciation regarding the depth of the consultation process undertaken.  The Equality Impact Assessment had been attached as Appendix 6. 

 

If approved the construction cost of the scheme would be fixed, as set out in the development partner framework.  Any deviations from the agreed capital sum would be borne by ALS, unless costs were as a consequence of any additional request that was over and above the agreed scope of works.  It was confirmed that options had been discussed with the SIG, and on the basis of how the risk would be managed, they had agreed to recommend for development, pending Council approval.

 

Councillor H.Ll. Jones complimented the work undertaken with ALS.  He explained that the Nova Centre project would be the second of three projects which included the recently completed Bowls Centre, Prestatyn, and the Sun Centre, Rhyl.  Councillor H.H. Evans referred to the in depth scrutiny process undertaken in progressing the project, which had considered every possible aspect of the scheme.  He felt that Denbighshire had led the way in Wales by promoting the provision of leisure services, which in turn could relieve pressure on the Health Service.

 

Reference was made by Councillor C.H. Williams to the possible loss of the school playing field at Ysgol Gynradd Llandrillo.  The HCML informed Members that in terms of small villages and rural areas benefiting from investment, the leisure strategy had been clear.  He explained that due to population figures and the difficulty of increasing commercial viability, some areas of the County would need to be funded by areas of the service where expectations had been exceeded.     

 

During the ensuing discussion the HCML provided the following responses to questions submitted, and issues raised by Members:-

 

-                  The Ffrith Beach Fun Park lease holder would be included in the discussions relating to the development of the Nova Centre, and the future development of the land between the Ffrith and the Bowls Centre.

-                  Reference was made to the potential increase in employment in the area, and the boost to the local economy and tourism industry across the coastal area.

-                  Details were provided regarding the construction timescales.

-                  The importance of leisure services to the Social Care Agenda was highlight

-                  With regard to the provision of a water slide at the Nova Centre, it was explained that during the appraisal of the leisure offer and consideration of the mix of facilities along the coastal area, it had been agreed that the fun aquatics element in terms of leisure waters would be better located in Rhyl, with the facility in Prestatyn focusing more on formal waters. 

-                  The HCML provided details of the framework and contract with ALS.  He confirmed that Denbighshire had benefited from a professional framework of services which inform the Council of the services available and market demands.

-                  An outline of the proposed concessions relating to the retail units was provided by the HCML.  He explained that the aim had been to market the Nova Centre as a destination for visitors to Prestatyn and the coastal area.  It was confirmed that determining the best possible option in respect of the food and beverage offer, through the restaurant facility, would be critical to the success of the Centre.

-                  A bilingual service had not previously been provided as the facility had been operated by an arms-length independent company. However, future provision had been addressed.  The HCML confirmed that where possible Welsh speaking staff would be employed, but the requirement to appoint accredited staff did provide restrictions.

-                  In response to a request from Members, the HCML confirmed that an annual evaluation on the progress of the Nova Centre, against the Improvement Plan set for the Leisure Strategy, could be provided.

-                  Members were informed that it had been set within the framework of the contract  that ALS utilise local labour and suppliers where possible.

-                  The HCML provided details of the flood and storm protection measures for the building, which included improvements to the promenade and sea defense wall.

 

The Chair and Members thanked the HCML, his staff and ALS for the excellent work undertaken in respect of the project during the limited timescales.

 

Following further discussion, and on being put to the vote the recommendation in the report was agreed:-

 

38 votes for and 1 abstention.

 

RESOLVED – that Council approves the £4.217M refurbishment of the Prestatyn Nova Centre.