Waverley Borough Council Committee System - Committee Document
Meeting of the Executive held on 04/04/2006
Site at Kings Road Industrial Estate, Haslemere
Waverley Borough Council
Executive – 4th april 2006
SITE AT KINGS ROAD INDUSTRIAL ESTATE, HASLEMERE
[Ward Affected: Haslemere Critchmere and Shottermill]
Summary and purpose:
The purpose of this report is to seek members’ approval for a change of policy concerning the use of the site from the provision of start up units to general industrial use.
There are no environmental implications in this report.
Social / community implications:
The report considers improving the provision of land for local job creation.
There are no e-government implications in this report.
Resource and legal implications:
The redevelopment of the site will involve the use of insurance monies set aside for this purpose. There may be either a capital receipt or income from a lease of the site. Legal resources will be required in connection with the leases.
1. Waverley is the freeholder of the Kings Road Industrial Estate. The whole estate is let on a long lease that expires in 2037. In 1998, Waverley took a lease of part of the estate, shown outlined on the attached plan, from the head lessees for the purposes of providing small start-up units for new businesses in Haslemere when the original site designated for this purpose, Top Yard, proved to be commercially profitable. The rent from the site is in line with the rent charged for the Top Yard, making this site, in effect, cost neutral for Waverley. However, the lease for the site expires 12 days before the head lease, which has affected interest in the site. Those approached as partners for start up units have stated that the length of the lease prevents the development of an effective scheme. The location of the site is shown at
2. At the time Waverley took the lease, the site consisted of a builders yard with minimal, somewhat dilapidated ancillary buildings. In 1999 the buildings were destroyed by fire and subsequently demolished. Insurance monies of £90,000 were obtained by Waverley on the basis that the monies were to be ring-fenced for reconstruction of the site. The head lessees have claimed they should share in the insurance monies, a claim disputed by the Council.
3. After preparing a draft scheme for start up units, Waverley entered into discussions with the Blackwater Valley Enterprise Trust for them to undertake, or find a developer to undertake, the construction and management of these units. These negotiations began enthusiastically, but became protracted and finally ceased. Attempts to revive them in 2005 failed. Further attempts to obtain interest from other parties, notably SEEDA, were made in 2004 and 2005. No other organisation has expressed any interest in constructing and managing the units on the basis that Waverley provides the site and the insurance monies and they provide the building and the expertise to assist new companies.
Problems of the Site
4. There are two main problems, as indicated above, that have affected interest in the site:
i. The lease:- The lease has only 30 years to run. There is then a twelve day hiatus between the expiry of this lease and of the head lease. Any development of the site must, therefore, be funded in what is a very short period for industrial developments. Most investors would expect at least 99 years, if not 125 years, in which to recover their initial investment. A lease of only 30 years is therefore highly unattractive and has been cited as one of the main reasons, by potential partners for start up units, for not considering this site.
ii. The insurance monies:- There is at present no agreement between Waverley and the head lessees with regard to the deployment of the insurance monies. It is possible that significant delays could occur should there be litigation on the matter.
Interest in the Site
5. Despite extensive trawling for external interest in the start-up units, no organisation or company has been prepared to take on the construction and running of the proposed start up units for the reasons set out above. It is therefore clear that the site is not suitable for providing small start up units for new businesses in Haslemere. The site should now be considered for alternative job creation uses.
6. Waverley has had a number of enquiries for the site for commercial or industrial use. Information concerning the problems of the site was not disseminated to the interested parties while the development of start up units was considered possible. The problems of the site may deter some of them: however, it is considered that the commercial sector
is in a better position to assess and overcome the risks involved in the site than the public sector. By accepting a general commercial or industrial use for the site, Waverley will then receive an income and the site will be put back into productive use, thereby generating jobs in the locality.
7. The only alternative use considered feasible
for the site is that of open storage land. This has been valued at £16,666 pa, somewhat higher than the existing rent of £15,412 pa. However, under the terms of the sub-lease, the primary use of the land should be for planning Use Class B1 (c). Use for open storage would therefore be in breach of Waverley’s obligations under the sub-lease and could lead to a legal challenge from the head lessees.
8. Waverley holds a lease of land within the Kings Road Industrial Estate, Haslemere, for the purposes of developing start up units for new businesses in Haslemere. Over the last seven years approaches to various public sector
and commercial organisations have failed to find a partner willing to take on the construction and management of such a development, despite Waverley offering to contribute the land and the insurance monies. This has been largely because of the nature of the basis on which Waverley is holding the land.
9. Rather than leaving the land vacant and derelict, it is proposed that Waverley accepts the non-viability of start up units on this site and seeks either a commercial or industrial tenant for it.
It is recommended that:-
1. the principle of providing start up units on the area leased by Waverley Borough Council at Kings Road Industrial Estate, Haslemere, be changed to providing either industrial or commercial use; and
2. the Property and Development Manager be authorised to seek a tenant for the site and agree terms and conditions for a sublease.
There are no background papers (as defined by Section 100D(5) of the Local Government Act 1972) relating to this report.