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To approve as a correct record the minutes of the meeting held on 23 February 2022.
The Minutes (copies of which had been circulated) of the meeting held on 21 March 2022 were approved as a correct record.
Declarations of Interest
Councillors and officers to declare any interests which they have in any of the items on the agenda for the meeting.
Councillors and Officers were invited to declare any interests which they had in any of the agenda items for the meeting.
The following interest was declared:-
To consider a report of the Strategic Head of Estate & Asset Management.
The report outlines the extent of the Councils Commercial portfolio, the performance and suitability of the significant assets to support council objectives for the next five years.
The Panel is requested to note the content of the report and recommend further areas for review.
Contact Officer James Kington on 07815 997564 or firstname.lastname@example.org
A representative of the Corporate Director (Corporate & Support Services) & Deputy Chief Executive submitted a report (copies of which had been circulated) that aimed to outline to the Panel the extent of the Councils commercial portfolio.
The Panel were advised that the Council’s commercial portfolio were arranged in two main portfolios, the tenanted non-residential properties and the investment and development account and was considered through three key lenses as follows: -
· Commercial suitability;
· Capital and revenue costs; and
· Climate Action NOW (CAN) objectives.
James Kington (Strategic Head of Estate & Asset Management, Stockport Council) attended the meeting to respond to Members’ questions.
The following comments were made/issues raised:
· The existing tenanted non-residential property portfolio was explained together with the capital asset value and the current rental income.
· It was clarified that the portfolio included assets which provided a stable and relatively secure income in comparison to others that were more sensitive to economic forces and requiring greater management by the Council as the landlord.
Commercial Ground Leases
· Commercial ground leases were of significant duration, commonly 125 years with older agreements being of shorter and many reaching a life where tenants were seeking an extension or renewal.
· Clarification was sought regarding the number of years left on a lease and the charges incurred. In response, it was noted that the rentals were static and it would be dependent on the lease terms.
· The Panel enquired about the 204 units generating just under £300m in rental income and whether it was the right thing for the Council to be doing. In response, it was commented that the units were held for historic reasons and would be low intensive to manage and on a day to day basis would not require much work. More work would be required where leases are being renewed, but it was really good to have these assets as a Council.
· The Council has two main estates of ‘nursery’ units occupied by a variety of small businesses who require smaller units.
· The nature of the tenants can require significant management and the rent arrears has increased due to the recent economic situation.
· The two estates are now approaching 50 years old with a lack of investment.
· The units do offer valuable space to businesses seeking to get established in the borough providing employment opportunities and additional non-domestic rating revenue.
· The Panel enquired about repairs insurance on these units. In response, it was stated that full repair insurance would be sought in most cases but dependent on the leasing arrangements.
· Clarification was sought on the location of the nursery units. It was commented that one of the nursery units was in Enterprise Centre Two, just off Chester Gate and the other was in Heaton Norris.
· Retail units were located across the borough in a mixture of small parades and a single precinct.
· The units have residential space on floors above which were managed separately by Stockport Homes Limited.
· The retail units were largely occupied by local retailers rather than national or regional businesses and required significant management to address issue such as rental arrears.
· The Panel sought clarification on the estates policies being aligned with other policies e.g. Climate Change and Active Travel policy. In response, it was noted that policy alignment was already being progressed and would be looked at further with Stockport Homes.
· It was commented that consideration would be given to encouraging the district centre work that was currently ongoing with the new district centre managers to bring together the estates and asset management to link in with the vibrant local centres and the active travel policies.
· Clarification was sought regarding the fairness of the rent and income being generated. In response, it was stated that it was fair for the areas and types of units and that the rents were market tested and were based upon what people could afford.
Miscellaneous Commercial Premises
· These ... view the full minutes text for item 3.
Dates for future meetings
To agree the dates for future meetings and the timescales for undertaking the review
The Panel was invited to consider a date for the next meeting of the review.
RESOLVED - That the Strategic Head of Service & Monitoring Officer (Legal and Democratic Governance) be authorised to determine the date for the next meeting of the Review Panel in consultation with the Chair.