Royal Sands Development on the Pleasurama site Ramsgate, update.

Thanet District Council have now published the minutes of the overview and scrutiny meeting about the development, here they are:  

'Call-In' of Cabinet Decision in relation to Ramsgate Royal Sands

• Meeting of Extraordinary, Overview and Scrutiny Panel, Thursday, 16th August, 2012 7.00 pm (Item 282.)
• View the background to item 282.

Minutes:

Mr Harvey Patterson, Corporate & Regulatory Services Manager introduced the report. He said that the after Cabinet had made a decision on the matter, the Chairman of the Overview & Scrutiny Panel formally call-in the decision as it was felt that some Members had some concerns and queries they wanted addressed before implementation of the decision. There had been some substantial changes made to the proposed development agreement at the request of the developer because of the current market conditions made it difficult for most developers to acquire funding. It was hoped that such changes would enable the developer to complete the project.

As part of creating an enabling environment for the developer, Council had proposed and Cabinet had agreed to release freehold to the developer subject to the fulfilment of the conditions of the agreement that included evidence of the availability of project funding and a hotelier signed up to rent the building.

Members said that it would be difficult to engage in discussion without making reference to the exempt Cabinet Report on ‘Royal Sands – Development Agreement.’

Councillor Campbell proposed, Councillor Bayford seconded and Members agreed the following:

1.  That the public and press be excluded from the meeting on agenda item 5 as it contains exempt information as defined in Paragraph 3 of Schedule 12A of the Local Government Act 1972 (as amended).

Members of the public left the Chamber.

Members of the Panel said that almost all the decisions regarding this issue had been made by Full Council and would have preferred that any re-considerations of the matter be undertaken by Full Council rather than be delegated to the executive. They were particularly concerned that the due diligence report on the developer was still outstanding; citing that the report should have been brought before Cabinet as per the Cabinet decision on 5 April 2012. There was a need for the Section 151 Officer to be satisfied that the developer was a viable company with funders to back the project implementation.

Other Members said that discussions on this issue had gone for too long and it was now time to implement the project. Some Members were concerned the Council was not taking advantage presented by the re-negotiation to ensure that a fair deal for the Council and that transfer of freehold would only be done once completion had been achieved. They said that the piece of land in question is prime land on the coastline and what Council was going to get in the deal should reflect that value. Mr Patterson said that there will be Cabinet report going to Cabinet on Due Diligence in due course.

Members suggested that a risk assessment should be carried out, whilst other Members said that the risk of a flood is rare; one in two hundred years. There was a concern that Council was giving away freehold too early leaving Council without a leverage for enforcing completion of the project. They said that the Council should rely on itself rather than the Banks for successful completion of the project. Mr Patterson said that Council had a number of approaches to enforce completion of the project. These included enforcing positive governance and Section 106 agreement.

Members requested that Officers’ responses to queries that were raised as detailed below to be done through a report to the Overview and Scrutiny Panel:

1.  CEx was asked at the Cabinet Meeting on 05 April 2012 to come back to Cabinet with a report on Due Diligence – It appears there has been no further reference to this issue;

The Cabinet Decision on 05 April 2012 was as detailed below:

“Councillor Poole moved, Councillor C. Hart seconded and Members agreed the following:

i  That the heads of terms as set out in Annex.1 form the basis of the draft of a new development agreement for the Royal Sands site;

ii  The new development agreement and updated due diligence report on the developer to come back to Cabinet for final approval.”

2.  S151 Officer should be satisfied that the developer is a viable company that has secured enough funding for the project; there is a need to for Members to know the source of the funds;

3.  Free-Hold is being proposed to change hands between TDC and the Developer at the payment of the overage levels. What leverage does TDC have to ensure project completion after surrender of free-hold;

4.  Although everything else in the original development agreement was potentially up for change, for some reason the overage payments were sacrosanct. Why was this?

5.  Members would like to review the detailed proposed Development Agreement prior to a Cabinet Decision;

6.  Members were concerned that as proposed in the new development agreement, TDC would be relying on Banks for successful completion of the project;

7.  Where are the milestones for the project implementation process?

8.  What is the potential profit for the developer; - is TDC getting a fair deal in view of the potential profit for the developer?

9.  There was no mention on whether TDC has attempted to negotiate for better overage levels. Can Members be availed with the details of the negotiations?

10.  What are the options for Developer’s Disposal Clauses?Is there any disposal clause in the agreement which limits the developer's option to sell on the lease or freehold?

11.  Are there any other developers who can pay more? This would help Members conclude whether this proposed agreement was the best deal for Council;

12.  Could there be a clause in the new development agreement that could include “If the developer was to sell-on; TDC would get 50% (of sale value)....”

13.  What assurances does Council have that the developer would complete the project under the proposed agreement?

1.  Is there a possibility for including in the agreement a clause on ‘windfall profit’ in the event that sales prices are higher than was envisaged in 2006, when the original agreement was signed?

2.  Flood Risk: - Why is a flood risk assessment not being suggested in the proposed development agreement, as this is an opportunity to conduct one? There is a need for a moral decision to be made on this issue;

3.  CEx and Director of Operational Services to be attendance at a future Overview & Scrutiny Panel meeting to consider these queries raised by Members.

Councillor Harrison proposed, Councillor Bayford seconded and Members AGREED the following:

1.  That before any final decision is made, external due diligence be undertaken and the report brought back to the Overview & Scrutiny Panel;

2.  That the final decision is made by the Cabinet Member (for Commercial Services), Leader of Council and Officers;

3.  That points (i.e all unanswered Questions/Queries) raised by Members of the Panel be responded to and report authors be present (when such issues would be considered next).

Supporting documents:

• Scrutiny call In - Royal Sands Report, item 282.  PDF 87 KB View as HTML (282./1)43 KB
• Decision Notice - Royal Sands Development Agreement - Annex 1, item 282.  PDF 42 KB View as HTML (282./2)17 KB

The net results of this was that the issue went back before the council’s cabinet on 23^rd August, so here is what the cabinet minutes have to say: 

Agenda and draft minutes

Cabinet
Thursday, 23rd August, 2012 7.00 pm

24.

Report Back - 'Call-In' of Cabinet decision in relation to Ramsgate Royal Sands - Overview & Scrutiny Panel - 16 August 2012 View the reasons why item 24. is restricted Minutes: Councillor Bayford and Councillor W. Scobie spoke under Council Procedure Rule 24.1: Members discussed the call in of the Cabinet decision and Councillor Poole moved, Councillor Fenner seconded and Members AGREED that: 1.  As all the concerns expressed by the Overview & Scrutiny Panel have now been addressed, Cabinet confirms its decision taken on 26 July 2012. Ed. My initial reaction to reading this is that some of the councillors are beginning to voice a degree of disquiet about this development. This doesn’t seem to be in any way curtailing the desire of the present cabinet or previous cabinets to bend over backwards to accommodate the developer’s desires. Living and working in Ramsgate I am made aware of local people’s concerns about the towns main leisure site being a mostly deserted and always unsightly piece of waste ground. To read my previous posts about this development click on this link http://thanetonline.blogspot.co.uk/search/label/Pleasurama%20development when you get to the bottom of a page you need to click on the link that says “Older Posts”