Request for approval to dispose of Norwood Green former police station, 190 Norwood Road, Southall, UB2 4JT

Report: 7
Date: 17 February 2011
By: Director of Resources on behalf of the Commissioner

Summary

This report requests Members approval to dispose of the freehold interest in Norwood Green Former Police Station at 190 Norwood Road, Southall, UB2 4JT following an open market tender.

A. Recommendations

That members

1. Approve the disposal of the freehold interest in Norwood Green Former Police Station at the value and to the bidder identified in Exempt Appendix 2 following an open market tender;
2. Note that approval is sought for disposal to an alternative bidder to that previously approved by the Committee on 20 January 2011, and
3. Note that in view of the exceptional circumstances in this case, the capital receipt from the disposal of this property will be re-invested as part of the corporate real estate programme in support of policing in Ealing.

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 1890 fronts Norwood Road opposite the intersection with Wimborne Avenue backing on to Wolf Field Park to the south of Southall town centre within the London Borough of Ealing. The premises comprise a self contained building at the front of a 0.3 acre surfaced site with various outbuildings. The premises are locally listed and in a conservation area. The property is surplus, has no front counter and has been vacant and decommissioned since 2008.

3. The property was marketed in a campaign between 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. Simon Williams Commercial Property Consultants 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. Eight bids were received by the deadline for the first stage of the tender. The results of the eight 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) and a shortlist of three were invited to submit their best and final offers by midday on 7th December. The results of the second stage bids are attached in Appendix 2 (Exempt).

6. With external advice from Simon Williams Commercial Property Consultants, Property Services originally recommended Members approve the sale of the property to the highest bidder identified in Appendix 2 (Exempt). Members approved the sale to the highest bidder on 20 January 2011. However subsequent to the Members approval the bid became noncompliant when the bidder confirmed that funding for the purchase was conditional upon Local Authority approval for a change of use and that the sale would proceed only on this basis. With further advice from Simon Williams Commercial Property Consultants, Property Services recommend that the sale proceedings to the original purchaser cease and Members approve the sale to the second highest bidder identified in Appendix 2 (Exempt). The recommended bid is in excess of the opinion of value reported previously to the MPA and 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 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 2010/2011 capital 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. The funds generated will be reinvested in support of policing in Ealing. Further details are provided in exempt Appendix 2.

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 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. In view of the change of circumstances and on the basis of the information contained within this report and discussions held with Property Services, DLS are supportive of the proposed disposal to the recommended bidder.

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 the contents 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 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 the delegated authority to approve the recommendations set out in this report in accordance with the Committees terms of reference.

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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