Request for approval to dispose of Penge former police station, 175 High Street, Penge, SE20

Report: 6
Date: 20 January 2011
By: Director of Resources on behalf of the Commissioner

Summary

This report requests Members approval to dispose of the freehold interest in Penge Former Police Station at 175 High Street, Penge, London, SE20 following an open market tender.

A. Recommendations

That members

1. approve the disposal of the freehold interest in Penge Former Police Station at the value and to the bidder identified in Exempt Appendix 1 following an open market tender.

B. Supporting information

1. The Corporate Real Estate (CRE) SIP 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 former police station built in 1872 lies within the London Borough of Bromley. It is situated in a prominent position in Penge Town Centre at the main crossroads where Green Lane and Croydon Road intersects the High Street. The property comprises a detached three storey building with various out buildings and car parking to the rear. Total site area is approximately 0.19 acres. A new front counter has been provided nearby at Copperfield House. The property is surplus, fully vacant and decommissioned.

3. The property was marketed in a campaign during October and November 2010. A marketing board was situated at the property and advertisements were placed in the national property press and relevant local press. Michael Rogers LLP as agents acting on behalf of the MPA hosted details of the property on their website and distributed particulars of the property to interested parties. Bids for the property were invited to be received by the agents no later than midday on 26th November 2010.

4. All bids were to be 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. 12 bids were received by the deadline. The results of the 12 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). In consultation with Michael Rogers LLP it was considered unnecessary to proceed to a second stage bid process and advantageous to the MPA to progress with the highest bidder solely, on the condition that a timetable for completing the disposal was adhered to by the purchaser. All bidders were aware at the time of bidding that that the right to invite second stage bids was reserved by the seller and that second stage bids maybe invited if deemed appropriate.

6. With external advice from Michael Rogers LLP, Property Services recommend Members approve the sale of the property to the party identified in Appendix 1 (Exempt). The recommended bid is in excess of the opinion of value reported previously to the MPA and is considered to be best consideration. 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.

C. Other organisational and 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. There are considered to be limited equality or diversity issues arising as a result of this proposed disposal.

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 report 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 2010/2011Capital Receipts budget is set at £20.4m and the latest forecast is to achieve £22.3m (MPA Finance & Resources Committee meeting 21/10/2010). This forecast 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 2010/2011 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.

Costs to hold the property in the longer term have not been included within Property Services future budgets as approved within the 2010/13 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. Property Services consider the disposal of the freehold to the bidder identified in Exempt Appendix 1 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. On the basis of the information contained within this report and discussions held with Property Services, DLS are supportive of the recommendations contained within this report.

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. The recommended disposal by way of sale of the freehold is considered by Property Services to be compliant with the MPA’s Standing Orders relating to Property disposals, set out in section 10 of Part F.

10. The recommendation is subject to contract, and external lawyers have been instructed through MetLaw (DLS) to complete the conveyance and to ensure the MPA’s interests are protected.

11. 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).

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

Environmental Implications

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 2010/2011 - MPA Finance and Resources - 11 February 2010

E. Contact details

Report authors: Neil Webster, Interim Director of Asset Manager, MPS

For more information contact:

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

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