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Report 15 of the 21 July 2011 meeting of the Finance and Resources Committee, requests approval to dispose of the freehold interest in Wallington Former Police Station, 84 Stafford Road, Wallington, Sutton following an open market tender.

Warning: This is archived material and may be out of date. The Metropolitan Police Authority has been replaced by the Mayor's Office for Policing and Crime (MOPC).

See the MOPC website for further information.

Request for approval to dispose of Wallington Former Police Station, 84 Stafford Road, Wallington, Sutton, SM6 9AY

Report: 15
Date: 21 July 2011
By: Director of Resources on behalf of the Commissioner

Summary

This report requests Members approval to dispose of the freehold interest in Wallington Former Police Station, 84 Stafford Road, Wallington, Sutton following an open market tender.

A. Recommendations

That members

  1. Approve the disposal of the freehold interest in Wallington Former Police Station at the value and to the bidder identified in Exempt Appendix 2 following an open market tender;
  2. Note the disposal is consistent with the approval in principle decision made by the Committee on 16 December 2010, and
  3. Note that the capital receipts from the disposal will support the 2011/12 Capital Programme.

B. Supporting information

1. The Corporate Real Estate (CRE) Programme aims to i) ensure the MPS estate is fit for purpose and to enable high quality policing in London, ii) optimise the efficiency of the MPS estate, making best use of accommodation and disposing of assets where appropriate and iii) achieve cashable savings to ensure officer/staff roles are protected.

2. The property is situated in the London Borough of Sutton circa one mile from both Sutton town centre and South Croydon. The site is located on Stafford Road which connects Sutton and Croydon. The site extends to approximately 0.31 acres and comprises a period red brick former police station with a courtyard to the rear together with more recently constructed ancillary accommodation. Internally the building comprises a mixture of office accommodation, locker rooms, training rooms and WCs. The premises are temporarily accommodating one Themis team which pending completion of minor works will move to Sutton Police Station. A new replacement front counter has been provided nearby at Crosspoint House. The property will be fully vacant and decommissioned prior to completion of the proposed disposal.

3. The property was marketed in a campaign between April and June 2011. Knight Frank as agents acting on behalf of the MPA placed advertisements in the national property press, relevant local press and also contacted local businesses directly with details of the opportunity. Knight Frank also hosted details of the property on their website and distributed particulars of the property to interested parties. There was very little interest in the property with only two parties requesting a viewing. Bids for the property were invited to be received by the agents no later than midday on 10 June 2011.

4. All bids were invited on an unconditional basis and subject to a standard five year forward-sale clawback clause, to enable the MPA to take benefit in the event that the purchaser subsequently sells the property on at a price in excess of that originally paid to the MPA. Bidders were also advised to consider including provision for additional sales overage or planning clawback in their bids.

5. Two bids were received by the deadline. The results of the two bids are shown in Appendix 1 (Exempt). The bids were then evaluated to determine which bids offered the highest value (taking into account any additional sales overage or planning clawback) from a credible purchaser (taking into account the availability of funding). Best and final bids were invited to be submitted by 12.00pm on 16 June. The detail and results of the second stage bids are attached in Appendix 2 (Exempt).

6. With external advice from Knight Frank, Property Services recommend Members approve the sale of the property to the party identified in Appendix 2 (Exempt). Should approval be granted Property Services will proceed with the completion of this matter and report the transaction in the next quarterly Estate Update Paper.

7. Property Services consider the disposal of the freehold to the bidder identified in Exempt Appendix 2 achieves best consideration that can reasonably be obtained in all of the circumstances, having followed an open and transparent marketing and tendering exercise, and having sought professional advice from independent Property Agents. It should be noted that, in this instance, the recommended bid is below the estimated market value previously reported.

C. Other organisational & community implications

Equality and Diversity Impact

1. In line with corporate real estate principles; maximising the use of space and minimising costs, it is essential that those buildings provided for longer-term use (enabling the release of surplus assets) are fit for use, compliant and provide suitable accessibility. Following an Equality Impact Assessment (EIA) completed at a strategic level and screenings undertaken on each property selected for disposal, looking at Equality and Diversity issues from both a community and MPS staff perspective for this site there are considered to be limited equality or diversity issues arising as a result of this proposed disposal. Any issues that do arise will be dealt with at a local level with the learning reflected within the EIA.

2. Private treaty disposals are open market sales making the properties available to all members of the public.

3. In the event of residential redevelopment of the operational sites, the provision of key worker or social housing accommodation at a site will need to meet the requirements of the Local Planning Authority, as and when granting planning consent for development.

Consideration of MET Forward

4. This paper aligns with the strategic intent of Met Forward section 7, Met Support - in particular the Estates Programme. The recommendation is to dispose of surplus properties to meet the Capital Programme budget and also deliver revenue savings.

Financial Implications

5. The 2011/2012 Capital Receipts budget is set at £40m. This budget is to be achieved through the disposal of operational and residential properties that are surplus to requirements.

If approved, the receipts generated from the disposal of the freehold will be allocated to 2011/2012 capital programme.

6. The revenue costs related to the maintenance of this property based on 2010/11 costs are detailed below. Maintenance/repair works have been kept to a minimum.

Category £/per year – based on 2010/11 costs
Planned Maintenance Costs (security/repairs/insurance) 30,874
Reactive maintenance (security call out/damage repair) 16,600
Rates 26,172
Utilities 13,859
Total 87,505

Costs to hold the property in the longer term have not been included within Property Services future budgets as approved within the 2011/14 Business Plan; a longer term hold will require funding to be provided through future business planning processes.

Legal Implications

7. The MPA powers to dispose of the freehold by way of sale are contained in s123 of the Local Government Act 1972.

8. On the basis of the information contained within this report and discussions with Property Services, DLS are supportive of the proposed recommendations.

9. The MPA, in exercising its discretion to dispose of the property, must have regard to its obligation to do so fairly having regard to established policy and procedure. On the basis of this report, the recommended disposal by way of sale of the freehold is considered by DLS to be compliant with the MPA’s Standing Orders relating to Property disposals, set out in section 10 of Part E.

10. The appendices are considered to contain exempt information in accordance with paragraph 3 of the Local Government (Access to Information) (Variation) Order 2006, as it relates to information relating to the financial or business affairs of any particular person (including the authority holding that information).

11. Members have delegated authority to approve the recommendations contained within this report under the terms of reference of this committee.

Environmental Implications

12.

  Higher Lower No impact Mitigation/ management of any higher impact
Level of energy use and associated carbon dioxide emissions   Tick   Based on 09/10 figures disposal of the property will reduce MPS CO2 emissions by 85 tonnes per annum. A future occupier will however use energy.
Level of water consumption   Tick   The building referred to herein is surplus to requirements. Whilst there is a reduction in MPS emissions, a future occupier will use water.
Level of waste generation/waste requiring disposal   Tick   The building referred to herein is surplus to requirements. Whilst there is a reduction in MPS waste, a future occupier will generate waste.
Level of travel and transport and associated emissions   Tick   The building is being disposed of. All MPS visits to the property will cease.
Raw material use and finite resources (use of recycled materials and sustainable alternatives)     Tick Property will be disposed of.

Risk Implications

13. With continued general financial uncertainty and on-going difficulties in obtaining funding for both commercial re-developments and residential mortgages there is a risk that the sale will fail to complete and / or the purchaser will look to renegotiate the purchase price.

D. Background papers

  • Request for Authority to Dispose of Surplus Properties in 2011/2012 - MPA Finance and Resources - 16 December 2010

E. Contact details

Report authors: Jane Bond, Director Property Services, MPS

For more information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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