Underground car park construction work

Tender description

The Council (part landowner of Grafton Gate and Silsbury Boulevard) is intending to surrender a lease and grant a 125-year lease to the purchaser (Santander UK plc). Part of the land is used as a car-park generating income for the Council (currently leased to The Parks Trust). The purchaser is paying the Council GBP 1 331 771 for the lease. The purchaser may develop the property but is not required to. If the purchaser develops the property: — it must do so in accordance with planning conditions and building regulations imposed by the Council as planning authority — none imposed as a contracting authority; — it will result in a digital hub being built on the purchaser's land and a reinstatement of the Council's car-park on its land; — the Council will grant an investment lease to the purchaser and have the benefit of a car-park lease granted to it by the purchaser. The Council has an option to require the purchaser to surrender the lease in specific circumstances/within certain timeframes. The Council as landowner of the property at (Grafton Gate and Silbury Boulevard) is intending to surrender an existing lease and dispose of its interest in land by granting a 125-year lease of the property to the purchaser for the purchase price of GBP 1 331 771. The Council intends to enter into an agreement for lease (AfL) through which on the unconditional date (once a number of conditions are satisfied or waived as set out in the AfL and the development agreement (DA), although the Council is not a party to the DA and does not have any enforceable rights under the DA), the Council agrees to surrender a lease with The Park Trust and grants the purchaser a 125-year lease in respect of the land (incl. the land used a car park). Under the terms of the lease, the purchaser is granting an option to the Council for GBP 1 (non-refundable) the right to require the purchaser to surrender the lease to the Council in specific circumstances and within certain timeframes. The terms of the lease permit the purchaser to develop the land but do not impose any obligation on the purchaser to develop it. If the purchaser carries out the development: — it is required to do so in accordance with certain requirements which relate to planning conditions, building regulations and other requirements to comply with law imposed by the Council (as a planning authority but not any enforceable obligations as a contracting authority); — the Council will grant the purchaser an investment lease for GBP 1 and the purchaser will grant the Council a car park lease for GBP 1; — the car park will be resurfaced but there will be a reduced number of car parking spaces. The resurfacing work will be carried out by the purchaser or on its behalf; — the value of the resurfacing is estimated to be GBP 438 941 and is expected to be carried out through a works contract between the purchaser and a third party contractor identified by the purchaser’s development partner and approved by the purchaser. Part of the Council’s land that is affected is used as a car park of 94 spaces and used by the Council to generate income. If the purchaser determines to carry out the development (with no obligation to do so), the number of car parking spaces that the Council will receive through the car park lease will reduce to 80 car parking spaces. The purchase price of GBP 1 331 771 is based on an independent valuation taking into consideration the temporary suspension of car parking for the time that it is not available for use (e.g. whilst any development works are being undertaken), as well as the loss of some car parking spaces if the relevant land is developed. The valuation also confirms that the consideration represents best consideration under section 123 of the Local Government Act 1972. The Council's view is that the arrangement it is intending to enter into constitutes a land disposal and falls outside the scope of the Public Contracts Regulations 2015 (PCRs 2015) and thus does not require prior publication of a procurement process. The Council has carefully considered the overall transaction, the terms of the contractual documentation and the obligations of the parties. In particular, the purchaser is not under an obligation to develop the property. Certain conditions only apply if the purchaser decides to develop and even those relate to planning, building regulations and compliance with law. None are imposed by the Council in its capacity as a contracting authority. The interest that the Council is receiving consists of a premium which has been determined based on car parking income. Whilst the Council would benefit from the resurfacing works if the development is carried out (with the purchaser not being under an obligation to carry it out), the value of those works falls below the threshold of the PCRs 2015. Continued at II.2.14) Additional information.