Construction work for subsidised residential accommodation

Tender description

Crawley Borough Council (the "Council") intends to enter into a conditional sale agreement with Belltone Limited ("Belltone") to include an option for the Council to purchase the freehold interest in land known as 'Central Sussex College North Car Park', to include residential units to be erected thereon as further described below (the "Site"). The arrangement falls outside the remit of the procurement rules and therefore the Council is under no obligation to notify its intention to enter into this transaction, however, has chosen to do so in order to provide full transparency in respect of its decision. Belltone entered into an Option Agreement with Central Sussex College on 26 January 2016 which provided Belltone with the option of purchasing the freehold title of land known as 'Central Sussex College North Car Park' from Central Sussex College on or before 31 January 2018. Belltone intends to exercise this option imminently. Following its acquisition of the freehold title from Central Sussex College, Belltone intends to erect 90 residential units on the Site, together with associated parking, landscaping and frontage service bay on car park land fronting Northgate Avenue. On or around 26 January 2018, the Council intends to enter into a conditional sale agreement which will include an option for the Council to acquire the freehold interest in the Site from Belltone and may be triggered by the Council on the earlier of: i) 10 working days following practical completion; or ii) a date to be agreed between the Council and Belltone, for the purposes of affordable housing to be owned and managed by the Council. The Council will pay 14 % of the purchase price by way of a deposit on execution of the conditional sale agreement (i.e. £ 2 940 000.00), and will submit monthly payments in respect of the build costs associated with the scheme following satisfactory sign off from the Council's Employer's Agent. The Council will reserve the right not to exercise the aforementioned option, together with a full refund of monies paid to date, should the scheme fail to achieve the required specifications and/or should it fail to reach practical completion by 1 June 2020. Alternatively, should the scheme fail to achieve practical completion by 1 June 2020, the Council will reserve the right to acquire the freehold title to the Site based on its then current value. The Council will be granted security by way of a first legal charge over the Site, which will remain in place following execution of the conditional sale agreement until transfer of the freehold title to the Council (or, in the event the Council decides not to exercise the afore-mentioned option in circumstances where the works do not achieve practical completion by 1 June 2020, until such time as all monies paid to Belltone up until such date have been refunded to the Council in full). In the event the Council does exercise the option, it shall pay a balancing payment to Belltone which shall be the difference between the purchase price of the Site (i.e. £ 21 000 000.00 excluding VAT) less the deposit and any monies paid in respect of build costs as at such date. The Council will also pay an additional £ 146 250.00 in respect of each additional residential unit that may be achieved (up to a maximum of 98 units). Belltone shall act as the 'Employer' in respect of the build contract and intends to engage Arcus-pcd ("Arcus") to act as the developer who will appoint Buxton Building Contractors Limited to undertake the construction works. Such works will be carried out in accordance with i) the planning permission already obtained by Belltone and any variation thereto previously approved by the Council in its capacity as local planning authority; ii) specifications which have previously been approved by the Council in its capacity as the purchaser. Belltone will not be subject to any positive legally binding obligation to commence the works and therefore, the transaction shall not constitute a public works contract and is exempt from the application of the Public Contracts Regulations 2015 (the "Regulations") pursuant to regulation 10(1)(a) of the Regulations. The Council is publishing this notice in order to provide full transparency in respect of its decision to enter into this transaction.