Tintagel House lease renewal approval

Report: 20
Date: 19 July 2001
By: Commissioner

Summary

This report seeks approval to enter into a new 23 year lease of Tintagel House, Albert Embankment from 25 December 2001 in order to accommodate headquarters users which need to be located within central London.

A. Recommendations

Members are asked to consider whether they wish to agree:

1. that the Metropolitan Police Authority (MPA) enter into a new lease of 23 years duration for Tintagel House from 25 December 2001.
2. that the Director of Property Services be authorised to agree a lease on terms which facilitate a programme of refurbishment of the accommodation to meet the requirements of the headquarters estate.

B. Supporting information

The Building and MPA occupation

1. The Metropolitan Police has occupied Tintagel House since its construction in 1960 under two consecutive leases totalling 41 years. The current lease term expires on 24 December 2001.

2. The MPA's immediate landlord is Galaplace Limited who hold the property under a headlease from the Duchy of Cornwall for 125 years from 1960.

3. The building comprises 7,435 sqm (80,000 sq ft) of office accommodation and is located on Albert Embankment, a few minutes walk from Vauxhall rail and underground stations.

4. Headquarters police and civil staff occupy all the accommodation and the building forms part of the Headquarters (HQ) Estate.

MPA lease liabilities

5. Under the lease, the MPA bears a full repairing liability. It is required to return the property in good and substantial repair and decoration at the end of the lease, to remove any alterations carried out during the police occupation and to reinstate the accommodation to its original condition.

6. Consultants Watts and Partners were commissioned to advise on the level of liability at the end of the lease if the building were to be given up.

Building condition

7. The building is over 40 years old and the general condition of the accommodation is poor and the heating, ventilation and power systems need upgrading. It is recognised that a programme of major refurbishment work is essential to support continued police use.

8. Consultants have been commissioned to advise on the options available for upgrading the building whilst keeping it in part occupation.

Headquarters accommodation strategy

9. The current Headquarters Accommodation Strategy states that Tintagel House should be released as part of the overall reduction of the HQ Estate. Since the strategy was agreed, the MPS restructure and centralisation of certain functions has increased demand for central accommodation. In particular the introduction of high profile initiatives including Operation Trident and C3i has also created new demand for central accommodation.

10. As a result of these structural changes, the HQ Accommodation Strategy is currently under review.

Decision to retain Tintagel House

11. On 20 December 2000 Management Board endorsed the proposed retention of Tintagel House for 5 years, due to unprecedented changes in demand on the HQ Estate.

12. The MPA Estate Sub-Group was advised on 11 April 2001 that it would not be possible to release Tintagel House. A full report was due back to this committee in the summer.

Negotiations

13. The Estates Branch of PSD entered negotiations with the landlord for a new lease. The landlord was originally prepared to grant a short lease, but the building has attracted considerable interest from potential purchasers and developers. As a result, the landlord is no longer prepared to grant a lease for five years but is willing to grant a lease for a longer period.

Options

14. There are five options available to the MPA. They are summarised below.

• Option one: do nothing
  If the property is not retained there is no space available on the existing estate in which to accommodate the groups in Tintagel House
• Option two:
  A 23 year lease with an option to break at the end of year 5
• Option three:
  retaining the building for 23 years
  There are three sub-options for consideration.

The net present value for each of these options is assessed in a separate Investment Appraisal. This shows the cheapest net present value option to be Option Three (3) but preferred best value option to be Option Three (2) because it minimises the capital investment to be found by the MPA.

C. Financial implications

In anticipation of a limited extended occupancy of Tintagel House, provision has been made for the current rent until the end of March 2002. A sum has been included in 2002/03 and 2003/04, based on a reduced rent resulting from negotiations. Provision has also been made for business rates until 2003/04.

If Tintagel House is not retained there will be an increased rent requirement which is estimated at £3m per annum. Business rates on alternative accommodation are also expected to be substantially higher.

A growth item is identified in the 2002/03 revenue expenditure budget to cover any dilapidation liability.

D. Background papers

None.

E. Contact details

The author of this report is Trevor Lawrence Director of Property Services.

For information contact:

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

Send an e-mail linking to this page

Feedback