Request for authority to dispose of new Malden Police Station to operator of licensed premises

Report: 10
Date: 15 June 2006
By: Commissioner

Summary

This report requests authority for the disposal of the former New Malden Police Station to an operator of licensed premises.

A. Recommendations

Members are asked to approve the unconditional sale of the MPA’s interest in this property for the sum of £1,135,000 (one million one hundred and thirty five thousand pounds) to the highest bidder shown in the exempt Appendix 1.

B. Supporting information

1. The former police station has been made surplus to requirements by the opening of a new front office and Safer Neighbourhoods base in the centre of New Malden.

2. The site has been marketed openly by informal tender over the last few months, with advertisements appearing in the national property press. Best bids, unconditional upon the receipt of planning permission, were invited.

3. Prior to marketing, the building was the subject of an assessment for statutory listing by English Heritage. Eight bids were received in the first stage of the tender. These were then short listed to three for the second stage of bidding. At this point notification was received from English Heritage that the decision had been taken not to list the building. As a result a third stage of bidding was called and the final results are shown in the Exempt Appendix 1.

4. Conditional bids were not invited as there are a number of disadvantages to the MPA in accepting an offer which is conditional upon planning:

1. There is no guarantee that the scheme as proposed will be granted planning permission.
2. If planning consent is not granted the purchaser will either seek to renegotiate the purchase price (to a lower figure) at a later stage, or may withdraw from the purchase altogether.
3. Any prolonged downturn in the commercial or residential market will affect a developer’s profit margin and may adversely influence a decision to proceed with the purchase.
4. 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 proposed purchase price.
5. Funds would not be received until receipt of planning permission and no certainty can be placed on the time scales to obtaining planning consent

5. 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 at a price in excess of that paid to the MPA.

6. The proposal to sell the property as outlined herein was originally approved at the PSEG meeting of the 1 March 2005.

7. The purchaser has indicated that the building will be converted into a Public House. Members should note the following key points in relation to this issue:

1. Any such operation would be governed by the current licensing and planning legislation.
2. Since the property is being sold unconditionally, the MPA cannot impose prohibitions upon the future development or use of the site, unless specific restrictive covenants are placed upon the title.
3. Without the provision of a pre-emption clause, it would be impossible to prevent the underbidder from selling on to a licensed operator in the future should they wish to do so. In this eventuality the MPA would lose a substantial proportion of the £135,000 differential between the current purchaser and the underbidder.
4. There is already a public house in operation immediately adjacent to this location.

8. The views of Kingston BOCU were sought in the light of the proposed use, and the Borough Commander has indicated that they do not support the proposed use of the site as a public house. There were primarily two reasons for this stance:

1. Concern over negative publicity from local residents, only recently placated with regard to the sale of the former police station.
2. Concern over an increase in alcohol related disorder in this vicinity.

9. A request was made for statistical data to substantiate the concern raised in 8.ii) above, but none is available. The proposed purchaser has previously indicated their willingness to work with local police to address concerns of this type, and to consider the sponsorship of community policing, a fact which has recently been reported in the press.

C. Legal implications

1. Apart from normal property contract matters there are no specific legal implications to report save as already noted.

2. It is possible that the MPA will be exposed to potential litigation by the current purchaser if it does not sell the site to the highest bidder.

D. Race and equality impact

1. There are considered to be no equality or diversity issues arising as a result of this disposal. The Local Planning Authority is also under a duty to consider such matters when a planning application is being reviewed.

2. In the event of residential redevelopment of the site, 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.

3. It is possible that the MPA will be exposed to accusations of inequality if it does not sell the site to the highest bidder.

E. Financial implications

The proceeds of this transaction have been included in the Property Services’ Capital Receipts’ budget 2006/2007. In line with the MPA/MPS estates’ strategy, Building Towards the Safest City and Property Services’ Interim Operational Plan, receipts will be recycled and reinvested in the estate.

F. Background papers

• Estate Strategy – Building Towards the Safest City

G. Contact details

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

For more information contact:

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

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