Agenda item

REPORT OF THE CULTURE AND FACILITIES SERVICE MANAGER AND PRINCIPAL ESTATES SURVEYOR

To consider the proposed acquisition of Unit 1, City Park, Letchworth Garden City on a long leasehold basis at a peppercorn rent (i.e. zero) for the Museum Storage Facility on the terms set out in the Part 1 and Part 2 reports.

RECOMMENDED TO CABINET: That the Overview and Scrutiny Committee recommend: That Cabinet approve the acquisition of Unit 1 City Park, Letchworth Garden City on the terms set out in the Part 2 report and noting the detailed Budget Cost Plan for adapting, fitting out and upgrading the building for museum storage.

REASON FOR RECOMMENDATION: Alimited number of modern buildings of this age and size become available to purchase or lease in Letchworth Garden City and surrounding area, particularly one on a long lease at a peppercorn rent for the full term, with an expiry date in 2150. Unit 1 includes land fronting Works Road and to the side of the unit, plus a large part of the car park with the ability to erect a fence to separate the area from the rest of the car park used by adjoining units. In addition, the Council already owns the long leasehold interest in Unit 3 City Park, Letchworth Garden City, having acquired it in June 2016 with that building being used for general archive storage, IT servers, offsite disaster recovery, careline business continuity and legal department storage.

Audio Recording - 2 hours 22 minutes 13 seconds

Councillor Val Bryant, as Deputy Leader of the Council, presented the report entitled ‘Acquisition of Unit 1 City Park, Letchworth Garden City for the Museum Storage Facility’ and advised that:

·             The storage facility was an open plan, modern warehouse in the main commercial area of Letchworth Garden City.

·             If they acquired the facility, the Council would receive rent from Citysprint (UK) Limited until January 2026 and the tenant would be responsible for repairs, maintenance and business rates, giving officers time to plan the future conversion of the facility.

·             A favourable Pre-Purchase Report from Brown & Lee Property Consultants and a Full Building Survey from Hollis confirming the soundness of the facility had been received. 

·             Significant investment would be required to ensure the environmental sustainability and efficiency of the facility and the preservation of the museum collection.

·             This was an opportunity to acquire a long-term storage space at a decreased cost.

·             The sale of the current storage site at Bury Mead Road in Hitchin would have the potential to raise up to £500,000.

·             The acquisition of Unit 1 would alleviate storage pressures at Broadway Gardens in Letchworth.

Councillor Ian Albert, as Executive Member for Finance and IT, advised that:

·             Due to the nature of the building, extensive fitting would be required to repurpose it for museum storage purposes. However, the total cost of investment would come to £2.5 million which was well within the £4 million earmarked for the acquisition of museum storage space.

·             The leasehold for the facility had 125 years left on it.

·             £64,000 in rent would be received from the existing tenant until January 2026, allowing the Council to collect income until then.

·             Facilities of this size were not on the market very often.

·             The contract procurement rules were followed when investigating alternative options for museum storage.

·             If the purchase did not go through, other options would continue to be explored such as grant funding towards another facility.

·             The time scales for acquiring the building would not allow for the Council to obtain grant funding towards the purchase, however, they would investigate obtaining grants towards project staff and the refitting.

·             A partnership solution was being explored by Letchworth Garden City Heritage Foundation who sought input from the Council towards a feasibility study over Vantage Point in Letchworth. However, the viability of this facility was not guaranteed and the initial cost projections of this were £137,000 higher than the acquisition of Unit 1 over its lifetime.

·             However, if these projections changed, there would be the possibility to re-explore this option. 

The following Members asked questions:

·             Councillor Jon Clayden

·             Councillor Matt Barnes

·             Councillor Ralph Muncer

In response to questions, the Culture and Facilities Service Manager advised that:

·             There was a possibility of exploring income from Unit 1 through the commercialisation of the building, however, this would need further research as the property coming to market was a recent development.

·             Unit 1 came with a great deal of office space and welfare facilities would be built which would allow for the potential of the storage facility being open to the community. The income stream from this would be nominal, but this had been considered as part of the acquisition. 

·             The location of the new facility in Letchworth would allow the museum to have a greater presence across the district as the Museum itself was in Hitchin and it was marketed as a district-wide museum.

·             There would be security concerns over the museum collection if the surplus storage space designed to futureproof the growth of the collection was granted to third parties on a temporary basis.

In response to questions, Councillor Ian Albert advised that:

·             The extensive archives would be available to the general public through behind-the-scenes tours. The Bury Mead Road facility did not have allow for these to be carried out.

·             As this would form part of the Council Delivery Plan, they would need to keep the project under review by setting up a project board to review the project and its progress. 

In response to questions, Councillor Val Bryant advised that:

·             There was social value from moving to Unit 1 as there would be space for a classroom, and there was already a car park large enough to fit approximately 30 vehicles. Therefore, there would be scope for visits from the public and outside organisations.

·             The North Herts Museum collection had many different items with different storage needs and they expected the collection to grow from the archaeology expedition that was taking place in Baldock.

·             The Museum Storage project would have a recognised project manager and project management structure to ensure that it was delivered within the budget and timescales as discussed previously.

In response to questions, the Principal Estates Surveyor advised that additional Council departments and outside voluntary organisations utilising the surplus storage space would be a future possibility, however, ensuring the preservation of the museum collection was the first priority.

In response to questions, the Service Director – Resources advised that if a project board was set up to follow through with the museum storage project, it would go through the project management framework which would have both Executive Member and Member involvement. Given the capital size of the project, this would be the recommended action to take.

The following Members took part in the debate:

·             Councillor Matt Barnes

·             Councillor Ralph Muncer

The following points were raised as part of the debate:

·             It would be prudent to consider the refurbishment work and continue to explore grant funding towards this and the relocation of the project costs.

·             This solution would be cost effective, and the project had been delayed in the past, therefore it was long overdue that it was commenced.

Councillor Matt Barnes proposed and Councillor Claire Winchester seconded and, following a vote it was:

RECOMMENDED TO CABINET: That the Overview and Scrutiny Committee recommend: That Cabinet approve the acquisition of Unit 1 City Park, Letchworth Garden City on the terms set out in the Part 2 report and noting the detailed Budget Cost Plan for adapting, fitting out and upgrading the building for museum storage.

REASON FOR RECOMMENDATION: Alimited number of modern buildings of this age and size become available to purchase or lease in Letchworth Garden City and surrounding area, particularly one on a long lease at a peppercorn rent for the full term, with an expiry date in 2150. Unit 1 includes land fronting Works Road and to the side of the unit, plus a large part of the car park with the ability to erect a fence to separate the area from the rest of the car park used by adjoining units. In addition, the Council already owns the long leasehold interest in Unit 3 City Park, Letchworth Garden City, having acquired it in June 2016 with that building being used for general archive storage, IT servers, offsite disaster recovery, careline business continuity and legal department storage.

The Chair thanked Members and officers for their work on the Museum Storage Project so far.