Former Bromley Police Station site – approval of sale

Report: 13
Date: 7 December 2004
By: Commissioner

Summary

The MPA has previously authorised the sale of the former Bromley police station on 15 October 2002, made redundant by the opening of the new Private Finance Initiative (PFI) police station in Bromley High Street. This report seeks members’ approval to the sale of the MPA’s interest in this property for the sum outlined and to the named party in the exempt report.

A. Recommendation

That members agree the unconditional sale of the MPA’s interest in the former Bromley police station house to the highest named bidder as shown in the linked exempt report.

B. Supporting information

1. This property has been marketed openly by informal tender over the last few months, with advertisements appearing in both the local and property press. Best unconditional bids were invited, on the basis of a sitting tenant in occupation and with 100% vacant possession.

2. Twenty seven bids were received, with values reflecting the sale of the freehold with a sitting tenant. After final bid negotiations, the top 13 bidders were invited to make “best and final bids”. The results are attached in the exempt report.

3. Although conditional bids were not invited three such bids were made.

4. There are a number of disadvantages in the MPA accepting an offer for this property, which is conditional. These are:

1. There is no guarantee that a scheme will be granted planning permission. Indeed, the MPA’s professional advisors do not believe planning consent will be granted on the basis of the proposed scheme and the Director of Property Services supports this.
2. If planning consent is not granted the purchase will either seek to renegotiate the purchase price (at a lower figure) at a later stage, or may walk away from the purchase altogether.
3. Market conditions continue to weaken; the three leading house price indices all show falls in October from the preceding month, and it is very possible that this trend will continue.
4. Any prolonged downturn in the residential market will affect a developer’s profit margin and may adversely influence a decision to proceed with the purchase. No certainty can be placed on the time scales to obtaining planning consent.
5. There is a high degree of risk in accepting a conditional bid in this type of market, where there is no certainty of realising the purchase price quoted.
6. Funds would not be received until receipt of planning permission.

5. In this instance, the Director of Property Services does not support the highest conditional offer. The recommended offer is the highest unconditional offer that has been made.

6. The recommended unconditional bid, represents certain income receivable now. A forward-sale clawback clause has been agreed, to enable the MPA to benefit in the event that the purchaser sells on at a price in excess of that paid to the MPA.

7. Sales and planning overage clauses have also been agreed, allowing for additional receipts linked to future gross sales and the level of planning permission obtained.

C. Race and equality impact

1. There are considered to be no equality or diversity issues arising as a result of this disposal and the local planning authority is also under a duty to consider these matters.

2. The provision of key worker or social housing accommodation at this site will need to meet the requirements of the Local Planning Authority, as and when granting planning consent for development.

D. Financial implications

1. The proceeds of this transaction have been included in the Property Services’ Capital Receipts’ budget 2004/2005.

E. Legal implications

1. Apart from normal property contract matters there are no specific legal implications to report. Appropriate overage and clawback provisions are in place to protect the Authority.

2. The purchaser will need to comply with current statutory requirements and legislation.

F. Background papers

None

G. Contact details

Report author: Alan Croney, Director of Property Services, MPS

For information contact:

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

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