Consideration was given to a report which sought approval to restructure the lease for Riverside House and to delegate the final details and future lease arrangements for Riverside House to the Strategic Director for Regeneration and Environment, in consultation with the Strategic Director for Finance and Customer Services and the Assistant Director for Legal Services.
In September 2011 the Council entered into a 35 year lease for Riverside House and this was a commercial full repairing and insuring lease with fixed rate five year rent reviews and no break clause.
There were restrictions within the lease, the main restriction being the use to which the building could be utilised, with further restrictions on subletting parts of the building. There was also a requirement to obtain Landlord’s permission to modify or make any additions or alterations to the building.
The lease had 28 years of the 35 year term remaining. An opportunity had arisen via the Landlord to restructure the lease. The basis of the restructure would be that the existing lease be extended by a further seven years, though the rent payable and rent review clause, along with user clause, would be revised. The restructured lease would also contain the provision that at the end of the 35 year term the ownership of the building and site would revert to the Council for £1.
Under the current lease at the end of the 35 year term the Council would have to return the building to the Landlord in a state of repair and at an agreed specification, which could include the payment of any dilapidations claim. There would also be the need to either negotiate a further lease with the Landlord or seek alternative premises.
Under the terms of the existing lease and the terms of the proposed restructure the Council was responsible for all the property running costs including repairs, maintenance and insurance.
The lease restructure would allow the Council more freedoms and flexibilities in the use of the building, along with full flexibility on sub-lease arrangements which would offer future income generation opportunities. The proposal would also deliver annual revenue savings to the Council.
Cabinet Members welcomed this significant opportunity to review the costs associated with Riverside House and the securing of a long term deal.
This report had been considered by the Overview and Scrutiny Management Board as part of the pre-scrutiny process who were in support of the recommendations, that an “in principle” decision be made to approve the restructure of the lease arrangement for Riverside House and delegate authority as outlined in the published officer recommendations and that efforts to co-locate more public services within Riverside House be supported.
Resolved:- (1) That a lease restructure be entered into for Riverside House and the final terms of the agreement be delegated to the Strategic Director for Regeneration and Environment, in consultation with the Cabinet Member for Jobs and the Local Economy, the Strategic Director for Finance and Customer Services and the Assistant Director for Legal Services be approved.
(2) That the Assistant Director of Legal Services be authorised to negotiate and complete the necessary legal agreements.