| Time: | 7.30pm | Place: | Council Chamber, Council Offices, Gernon Road, Letchworth Garden City |
| PRESENT: | Councillor Jane Gray (Chairman), Councillor Mrs A.G. Ashley, Councillor D.J. Barnard, Councillor Faye Barnard, Councillor Clare Billing, Councillor Judi Billing, Councillor John Booth, Councillor Tom Brindley, Councillor P.C.W. Burt, Councillor Paul Clark, Councillor Lisa Courts, Councillor Julian Cunningham, Councillor Bill Davidson, Councillor Jean Green, Councillor Cathryn Henry, Councillor Fiona Hill, Councillor T.W. Hone, Councillor Tony Hunter, Councillor S.K. Jarvis, Councillor Sal Jarvis, Councillor David Kearns, Councillor Lorna Kercher, Councillor Joan Kirby, Councillor David Leal - Bennett, Councillor David Levett, Councillor Ian Mantle, Councillor Alan Millard, Councillor Gerald Morris, Councillor M.R.M. Muir, Councillor Mrs L.A. Needham, Councillor Lawrence Oliver, Councillor Mike Rice, Councillor Deepak Sangha, Councillor Deborah Segalini, Councillor R.L. Shakespeare - Smith, Councillor Mrs C.P.A. Strong, Councillor R.A.C. Thake and Councillor M.E. Weeks. |
| IN ATTENDANCE: | Chief Executive, Strategic Director of Customer Services, Strategic Director of Finance, Policy and Governance, Corporate Legal Manager, Contracts Solicitor, Democratic Services Manager and Committee and Member Services Manager. |
| ALSO PRESENT: | 11 members of the public. |
| Item | Description/Resolution | Status | Action | |
| PART I | ||||
| 39 |
APOLOGIES FOR ABSENCE Apologies for absence were received from Councillors A. Bardett, John Bishop, Dave Chambers, Tricia Cowley (Vice-Chairman), John Harris and Bernard Lovewell. |
Noted | ||
| 40 |
NOTIFICATION OF OTHER BUSINESS No additional business was presented for consideration by the Council. |
Noted | ||
| 41 |
CHAIRMAN'S ANNOUNCEMENTS (1) Declarations of Interest The Chairman reminded Members that, in line with the Code of Conduct, any Declarations of Interest needed to be declared immediately prior to the item in question. (2) Variation of Order of Business The Chairman informed the meeting that she would be varying the order of business so that, at the conclusion of Item 4 - Public Participation, she would be inviting the Strategic Director of Customer Services to provide a number of updates to the Part 1 report on the North Hertfordshire Museum and Community Facility (Item 5). She would then move that the Press and Public be excluded from the meeting so that the Part 2 report on the North Hertfordshire Museum and Community Facility (Item7) could be debated. At the conclusion of the Part 2 item, the Press and Public would be re-admitted to the meeting for the debate upon the Part 1 report (Item 5). (3) Chairman's Charity Garden Party The Chairman reminded Members who were hoping to attend her Charity Garden Party on 7 September 2013 to obtain tickets as soon as possible. |
Noted | ||
| 42 |
PUBLIC PARTICIPATION Council received the following presentations in respect of Item 5 on the agenda - North Hertfordshire Museum and Community Facility: (1) Brian Foreman (Chairman of the Arts Council for North Hertfordshire) Mr Foreman advised that he was speaking as Chairman of the Arts Council for North Hertfordshire and as a Council tax payer living in Hitchin, who had spent his lifetime working in the Arts in a professional capacity. He had also put on events in Hitchin Town Hall and been engaged as a College Lecturer in the History of Architecture. Mr Foreman advised that, before the proposals to re-design the Town Hall were drawn up, none of the community groups had been invited to contribute to them. However they did consider, like the architects, that the design would not be cast in stone. The architects knew that they had to create the floor space for the new Museum that would satisfy officers and councillors. To do this, he considered that these plans had seriously compromised the community project and, indeed, the architectural integrity of the Mountford Hall. Mr Foreman stated that when the Hitchin Town Centre Manager announced to the Hitchin Committee on 8 January 2013 that it would not be necessary to build a wall across the stage because of the proposed acquisition of Nos. 14 and 15 Brand Street, it was greeted with joyous approval by councillors and the public. He added that a senior NHDC planning officer had gone into print in December 2012, and again in January 2013, stating that by not building the wall it would not change the planning application and that the architectural integrity of the building would be preserved. Mr Foreman explained that this was the largest stage in North Hertfordshire, of which 30 metres would be lost to museum storage. When first built the original stage was too small for stage plays, pantomimes etc., and was increased in size because the original was deemed unworkable. He felt that there should be no return to this situation. Mr Foreman advised that, on 21 February 2013, in the planning application to alter the Town Hall, the Directors of Hitchin Town Hall Ltd wished to make important changes to this application, but apparently NHDC did not want any changes to be included. Mr Foreman was informed of this at a recent community groups meeting, and was advised that the reason for this was to ensure that the application was approved without any problems. The Hitchin Town Hall Ltd proposal was to include an enhanced reading room/research facility, with the stage museum storage being moved into the museum, as a consequence of the acquisition of Nos. 14 and 15 Brand Street. This appeared not to have been investigated. Mr Foreman considered that unless four dressing rooms were included, and not just the one small room with a single toilet as presently proposed, it would not be possible to obtain the entertainment licence necessary to hold performances in the Mountford Hall. Children and adults of the same sex could no longer share dressing, washing and toilet facilities. As suggested, he considered that the placing of outside portacabins at the rear of the hall for additional dressing rooms and storage areas for props, scenery etc. would not be feasible or acceptable, as this was a shared area and would take up staff car parking spaces. Mr Foreman felt that the Council should learn from the lessons of Plinston Hall and other failed community facilities. According to one of Letchworth Garden City Heritage Foundation's accountants, the Plinston Hall was only making a profit on the tribute bands on some Friday evenings. The community facility needed to at least be able to cover its costs. Mr Foreman considered that the loss of 88 original bucket style seats in the gallery was both unwise and economically unsound. Flattening the floor was another architectural blemish. Mr Foreman respectfully urged the Council to re-consider all of the issues raised by him and others. At various Council and group meetings, Keep Hitchin Special and Hitchin Forum, in particular, had constantly voiced their concerns. He considered that the hall needed to be multi-purpose, in order to accommodate the widest range of activities and provide excellent supporting facilities for all stage performances to be given and enjoyed by the residents of North Hertfordshire. The Chairman thanked Mr Foreman for his presentation. (2) Morag Norgan (Hitchin Town Hall Limited) Ms Norgan advised that she was speaking on behalf of the trustees of Hitchin Town Hall Ltd (HTH Ltd), its members, and the community it served. She apologised that Members had been called to attend the meeting, as HTH Ltd had sincerely believed that the outstanding issues could be dealt with by the Lead Officer and Cabinet Portfolio Holder, but due to the perceived additional risk to NHDC, HTH Ltd were advised that they did not have the delegated authority. However, HTH Ltd were grateful to them and the Leader and Deputy Leader of the Council for very swiftly playing "catch up" in order to be fully apprised of the outstanding issues, following which all parties had met to work positively for a solution. Ms Norgan stated that it was largely due to the spirit of openness and understanding that existed between the parties at that meeting that ensured that the vast majority of outstanding issues had been able to be resolved over the past two weeks (including securing an extension of the Adventure Capital Fund loan condition from 16 August 2013 to 5 September 2013). Ms Norgan explained that the issue regarding the increase of the Put Option from £250,000 to £440,000 to take into account the purchase price of 15 Brand Street was simple. All parties missed it as an item that should have been specifically referred to at the Council meeting on 23 April 2013. The exact amount was not known at that stage as the valuation had not been carried out, but it was already a matter referred to by lawyers for both HTH Ltd and NHDC in correspondence in early April 2013 and by the draft deed of variation. It was unfortunate that this was missed at that time, but could be simply and readily put to right at this meeting. Ms Norgan commented that there were minor changes in relation to 15 Brand Street since this was last reported, which were: - A slight increase in HTH Ltd's interest costs of £400 per year; and - A second charge on the lease, with a payment longstop date of December 2013. Ms Norgan stated that HTH Ltd was very fortunate and delighted that they had such a generous donor and benefactor, which was a fantastic deal and for which they were most grateful. In respect of cashflow, Ms Norgan advised that, whilst HTH Ltd was leveraging in £850,000 of cash and two freehold properties into the project, until the deal was signed they were unable to draw down ACF funds, apply for further grant funding, or look to the community for financial support. This was a constant source of frustration to the HTH Ltd Directors/Trustees, but NHDC had been generous in its agreement to loan them £20,000 to assist with legal fees, of which approximately £16,000 had been used. The first repayment of £1,000 was due on 3 June 2013 and the second one was due on 2 September 2013. HTH Ltd was grateful that the wording of the agreement allowed that payments could be made "when funds allow". Ms Norgan explained that funds certainly did not allow the repayments to be paid at present, but that HTH Ltd was trusting that the 5 September 2013 deadline would be met, and therefore that the cashflow issues would be less problematic. They were working with NHDC's Finance Team on this and other finance-related issues. Ms Norgan commented that all parties involved with this visionary project had travelled a long, tiring and often frustrating journey, but that as far as HTH Ltd was concerned it was the prize that drove them on, despite the constant knock backs and irritation caused by negatively written and sometimes, in their opinion, inaccurate reports, including the one before Members at this meeting. However, HTH Ltd appreciated that it was the Strategic Director of Customer Services' role to apprise councillors of his perception of all risks, and that it was the Members' role to vote on whether or not the risks are worth taking. Ms Norgan stated that she had been assured by the Leader of the Council that NHDC was still fully committed to the joint project, and to ensuring that North Hertfordshire had a Town Hall and District Museum facility of which all could be proud. Ms Norgan thanked her for such positive re-assurance and trusted that the Council would vote in favour of taking on the minor risk that would allow this exciting project to come to fruition. Ms Norgan thanked councillors for their time and, she hoped, continued support for the project, and she extended HTH Ltd's thanks to the many officers at NHDC who had worked so hard, sometimes in extremely fraught circumstances, to support the parties in realising a partnership vision. The Chairman thanked Ms Norgan for her presentation. |
Noted | ||
| 43 |
NORTH HERTFORDSHIRE MUSEUM AND COMMUNITY FACILITY AT HITCHIN TOWN HALL Report Addendum Report Annex 1 Annex 1.1 Annex 1.2 Annex 1.3 Annex 1.4 Annex 1.5 [Prior to the consideration of this item, the following interests were declared: (1) Councillor David Leal-Bennett declared a Disclosable Pecuniary Interest, in view of his role as a Director of Hitchin Town Hall Limited. He withdrew from the Chamber for the remainder of the meeting; (2) Councillor Mrs A.G. Ashley made a Declarable Interest as she had publicly stated her support for Hitchin Town Hall Limited, but considered that this was not so significant that she needed to withdraw from the meeting, and she therefore remained for the debate and vote upon this and the subsequent items on this matter; and (3) Councillor David Levett made a Declarable Interest in that he was a Member of the Cabinet Sub-Committee (Hitchin Gymnasium and Workmans Hall Trust). However, as the business to be transacted did not directly affect the Trust, he considered that the interest was not so significant that he needed to withdraw from the meeting, and he therefore remained for the debate and vote upon this and the subsequent items on this matter] The Strategic Director of Customer Services provided the following amendments/updates to the Part 1 report on the North Hertfordshire Museum and Community Facility at Hitchin Town Hall, as contained in a Part 1 addendum tabled at the meeting: - Paragraph 1.1 - deletion of the word "material" (Explanatory note: The wording of this paragraph left unchanged could leave some ambiguity. Hitchin Town Hall Limited (HTH Ltd) did not consider the change to be "material". The Council was advised, however, that in the context of the decision making history, it was considered the changes were significant, particularly as the changes had financial and risk implications. Removal of the word "material" better reflected these views and the Strategic Director of Customer services was happy to correct any misunderstanding that may have arisen); - Paragraph 2.1 (Recommendation) - deletion of the words "and if so" - referred to in the Part 2 addendum; - Paragraph 2.2 (Recommendation) - deletion of the whole of this recommendation - referred to in the Part 2 addendum; - Paragraph 8.9 - replacement of the date "2013" with "2030"; and - Paragraph 10.2 - deletion of the whole of this paragraph and replacement with "The anticipated funding for the project is shown below, updated for the latest information on HTH Ltd's acquisition funding. The financial model for Hitchin Town Hall Ltd will now need to reflect the repayment of the £140,000 long-term secured loan note following the repayment of the £510,000 loan from Adventure Capital Fund and the £20,000 (max) loan from the Council. Based on previously provided versions of the financial model we are advised by HTH Ltd this repayment should be within the tolerances of the model. However, the repayment of a further loan will delay the ability to reinvest the equivalent amount back into the facility over the period to 2030 unless HTH Ltd are able to achieve surpluses over and above this. |
Noted | ||
| 44 |
EXCLUSION OF PRESS AND PUBLIC RESOLVED: That under Section 100A(4) of the Local Government Act 1972, the public and press be excluded from the meeting for the following item of business on the grounds that it involves the likely disclosure of exempt information as defined in Paragraphs 3 and 5 of Part 1 of Schedule 12A of the said Act (as amended). |
Agreed | ||
| 45 |
NORTH HERTFORDSHIRE MUSEUM AND COMMUNITY FACILITY AT HITCHIN TOWN HALL The Strategic Director of Customer Services provided the following amendment/update to the Part 2 report on the North Hertfordshire Museum and Community Facility at Hitchin Town Hall, as contained in a Part 2 addendum tabled at the meeting: - Deletion of Paragraphs 3.6 and 3.8 in the report in respect of the Put Option, and their replacement with new Paragraphs 3.6, 3.7 and 3.8 as set out in the addendum, and consequent re-numbering of the subsequent paragraphs. The Portfolio Holder for Community Engagement and Rural Affairs (Councillor A.F. Hunter) presented the Part 2 report of the Strategic Director of Customer Services in respect of the North Hertfordshire Museum and Community Facility at Hitchin Town Hall. The following annexes were submitted with the report: Annex 1 - Part 2 Report to Council: 23 April 2013 entitled North Hertfordshire Museum and Community Facility: Proposal for the inclusion of 15 Brand Street; and Annex 2 - HTH Ltd: 15 Brand Street "Acquisition Funding". The Portfolio Holder for Community Engagement and Rural Affairs summarised the following elements set out in the report: - The increased risks of the revised proposals; - The revised Put Option in the Development Agreement; and - HTH Ltd's revised "Acquisition Funding for 15 Brand Street. It was moved by Councillor A.F. Hunter, seconded by Councillor Mrs L.A. Needham and, following debate and upon being put to the vote, it was RESOLVED: That the report be noted, and its contents be taken into consideration prior to voting on the recommendations in the Part 1 report (see Minute 46 below). REASON FOR DECISION: To keep Members informed of Part 2 issues in respect of the redevelopment scheme for the North Hertfordshire Museum and Community Facility at Hitchin Town Hall. [Note: At this point in the proceedings, the press and public were re-admitted to the meeting.] |
Noted | ||
| 46 |
NORTH HERTFORDSHIRE MUSEUM AND COMMUNITY FACILITY AT HITCHIN TOWN HALL The Strategic Director of Customer Services presented a Part 1 report in respect of the North Hertfordshire Museum and Community Facility at Hitchin Town Hall. The following annex was submitted with the report: Annex 1 - Part 1 report to Council: 23 April 2013 entitled North Hertfordshire Museum and Community Facility: Proposal for the inclusion of 15 Brand Street. The Strategic Director of Customer Services reminded Members of the key changes to the Development Agreement, as reported to Council on 23 April 2013, which were: "8.19.1 The scope of the development would be expanded to include 15 Brand Street in the scheme; 8.19.2 The Council would have until 30th September 2013* to procure the main building contractor. Within 10 working days after this date, HTH Ltd would complete the purchase of 14 Brand Street and the Council would formally award the building contract. Both events would occur simultaneously; 8.19.3 Documents annexed to the Development Agreement such as Leases, option agreements and plans would be updated to include 15 Brand Street; and 8.19.4 The Planning Permission for 15 Brand Street was granted in February 2013 and the Development Agreement would include reference to this planning permission. * Date subsequently varied to 16 August 2013." The Strategic Director of Customer Services explained that the Put Option was a clause introduced at the request of Adventure Capital Fund (ACF), Hitchin Town Hall Ltd's bankers, and was reported to Council when it agreed the Development Agreement, Lease and associated Management and Community Use Agreements on 15 October 2012. At that time Council noted (Paragraph 5.6 of that report): "Grant of Put Option by the Council - this new clause addresses the requested ‘Guarantee' from NHDC to repay to ACF any investment made by them in the event that the project is not completed". ACF have made it a requirement for a new Clause 11 within the Development Agreement, that would require the Council to grant a ‘Put Option' to HTH Limited that, in the event of a Trigger Event, HTH Limited may exercise the Option to require the Council to re-purchase the property at 14 Brand Street from them. The Put Option can only be exercised from the date of the Agreement until completion of the Lease to HTH Limited. The Trigger Events are [in summary] (i) that the Works have not commenced or progressed in a manner likely to achieve the Target Completion Date (ii) HTH Limited terminates the agreement under Clause 8.3 due to a material breach by the Council of its obligations or (iii) the Target Completion Date has not been achieved by 14 November 2016. In the event of any one of the above, trigger events above occur the Council would be required to purchase 14 Brand Street for the sum of £250,000. Other consequential risks to the Council have already been identified, in the event any of the Trigger Events occur. The Agreement has also been amended at Clause 8.4, to take into account the provisions of this proposed Direct Agreement with ACF." The Strategic Director of Customer Services advised that, on 29 July 2013, HTH Ltd confirmed that it was seeking an extension of this Put Option to incorporate 15 Brand Street. The increase in the value of the option required was £190,000 (the purchase price for 15 Brand Street, increased following an independent valuation from the maximum £180,000 envisaged). Notwithstanding the nature of the proposal to incorporate 15 Brand Street, in which the acquisition of the property was envisaged as being without further cost or risk to NHDC when reported, Directors of HTH Ltd had confirmed that they were not willing to accept the risk of not having such an Option. The Strategic Director of Customer Services stated that, although the request to extend the Put Option to cover the new liability on HTH Ltd represented by the new £140,000 "loan" to partly finance the acquisition of 15 Brand Street was understandable, Officers did not believe this new liability was assumed when the Council agreed to the revised scheme, as had been suggested by HTH Ltd. The Strategic Director of Customer Services advised that, in summary, the non-negotiable position of HTH Ltd Directors was that the Council must agree to the terms of the amended Put Option and, in doing so, accept an additional financial risk of up to £190,000. If Council chose not to accept this risk, the project would be unable to proceed in its current form. The financial risks section of the report illustrated the effect on the Council's overall risk value should it wish to accept this change. Further consideration of the risk implications was provided in the Part 2 report. The Council was informed that, during the course of negotiations to agree a revised Agreement, Hitchin Town Hall Ltd had advised that their funding structure was being modified and would no longer be funded by donations (albeit ‘donations' which could be repaid and pay interest at Hitchin Town Hall Ltd's choice), but instead would rely on a long term unsecured loan and one donation. The new funding arrangements were set out in Annex 1 of the Part 2 report, but for ease of comparison the key features of both were set out in a table at paragraph 8.8 of the report. The Strategic Director of Customer Services advised that the changes illustrated in the table reflected a significant change in the structure of HTH Ltd's acquisition funding. Whilst HTH were confident that their overall financial model was capable of accommodating repayments of both the £140,000 loan by 2013 and 2% annual interest payments until that time, this would mean a proportion of the projected surplus during this period would not be available to invest in HTH Ltd's charitable objectives - primarily the operation and management of the Town Hall itself. In summary, the Council noted that the change in acquisition funding represented a potential risk to HTH Ltd, as it would be required to repay a "loan" and be required to pay interest, unlike the original arrangements where it could choose to do either at its discretion. Should HTH Ltd be unable to meet these payments, a degree of risk would in turn fall on NHDC. Further commentary on the risks arising from this were provided in Section 10 of the report and in the Part 2 report. The Strategic Director of Customer Services referred to the current project timetable, as set out at Paragraph 8.12 of the report. Conclusion of negotiations with the preferred contractor were due to be concluded by 16 August 2013, but it was now envisaged that this would conclude by the end of August 2013 and, subject to ACF's agreement, would entail formal award of contract by 5 September 2013. The Portfolio Holder for Community Engagement and Rural Affairs (Councillor A.F. Hunter) thanked all those involved for their time and effort in reaching the current position. He commented that this was a very complex project, involving investment of £4Million. The hard work would continue, but he considered that the project was now at a stage where some visible progress would soon become apparent. It was therefore moved by Councillor A.F. Hunter, and seconded by Councillor Judi Billing, that Recommendation 2.1 in the report be approved, namely: "That the request for the inclusion of a revised Put Option in favour of Hitchin Town Hall Ltd detailed in Paragraphs 8.5 and 8.7 of the report be agreed, and the revised funding structure detailed in Paragraphs 8.8 - 8.11 of the report, with the associated risks attached to both, be accepted. A number of Members expressed their support to the above proposal. The general view was that, although the quantum of the risk to the Council had changed, the nature of the risk remained similar to that which had already been accepted. Following further debate, and upon the motion being put to the vote, it was RESOLVED: That the request for the inclusion of a revised Put Option in favour of Hitchin Town Hall Ltd detailed in Paragraphs 8.5 and 8.7 of the report be agreed, and the revised funding structure detailed in Paragraphs 8.8 - 8.11 of the report, with the associated risks attached to both, be accepted. REASON FOR DECISION: To reflect the significant changes in the proposals already agreed by the Council, and to proceed with development on the amended terms required by Hitchin Town Hall Ltd. |
Agreed | ||
| PART II | ||||
| 47 |
REPORT AND APPENDICES TO THE PART 2 ITEM (MINUTE 45 ABOVE) ON THE NORTH HERTFORDSHIRE MUSEUM AND COMMUNITY FACILITY AT HITCHIN TOWN HALL Data/Council/201308081930/Agenda/Report Data/Council/201308081930/Agenda/Addendum Report Data/Council/201308081930/Agenda/Annex 1 Data/Council/201308081930/Agenda/Annex 1 1.1 Data/Council/201308081930/Agenda/Annex 2 The report and appendices relating to the Part 2 item (Minute 45 above) on the North Hertfordshire Museum and Community facility, are attached. |
Noted | ||