Purpose

This report
recommends the disposal of the freehold interest of 1 Drayton Road,
Croydon, CR0 1XR. The objectives for the disposal were to secure
maximum receipts, achieve offers on an unconditional basis with the
lowest possible transactional risk and to target capital receipts
with the preferred bidder as quickly as possible for the Council to
reduce its outstanding debt. SHW undertook an open market
process.
 
A transparent and
clear process was provided for parties to undertake their due
diligence to ensure considered offers. SHW received three offers.
Details of the offers received and the marketing report are
included within the confidential Part B report, as this is exempt
information as defined in paragraph 3 of Schedule 12A to the Local
Government Act 1972 (as amended), as it relates to the financial or
business affairs of any particular person (including the authority
holding that information) and the public interest in withholding
disclosure outweighs the public interest in disclosure.
 

Content

For the reasons set out in the
Part A and Part B report and appendices, the Corporate Director of
Resources and Section 151 Officer AGREED:
 
to approve the disposal of the
freehold interest of 1 Drayton Road at the value stated in the
confidential Part B report.

Reasons for the decision

No disposal of 1 Drayton Road – the
business case for disposal is set out in the Part B report. As set
out above, the overall aim of the approved Corporate Asset
Management Plan and the Annual Asset Disposals Plan is to reduce
costs of retained corporate assets used for the delivery of
services and to maximise capital receipts. This disposal is
required to meet those aims and enable the Council to achieve the
required asset disposals to help
support the financial requirements in line
with the MTFS.
 
No disposal of 1 Drayton Road – the
Council’s current financial pressures and need to deliver
savings means that not selling 1 Drayton Road at this time would
impact on the opportunity to reduce its debt balance. Reducing the
Council’s debt balance is a requirement from MHCLG, and the
government appointed Improvement and Assurance Panel as part of the
ongoing discussion on options for securing ongoing financial
sustainability for the Council. For 1 Drayton Road, the asset could
be retained as it is revenue producing. However, the financial
benefit of a disposal at the red book valuation is significantly
better than retaining the current income stream. Disposal is
therefore the recommended option.
 

Alternative options considered

No disposal of 1 Drayton Road
– the business case for disposal is set out in the Part B
report. As set out above, the overall aim of the approved Corporate
Asset Management Plan and the Annual Asset Disposals Plan is to
reduce costs of retained corporate assets used for the delivery of
services and to maximise capital receipts. This disposal is
required to meet those aims and enable the Council to achieve the
required asset disposals to help
support the financial
requirements in line with the MTFS.
 
No disposal of 1 Drayton Road
– the Council’s current financial pressures and need to
deliver savings means that not selling 1 Drayton Road at this time
would impact on the opportunity to reduce its debt balance.
Reducing the Council’s debt balance is a requirement from
MHCLG, and the government appointed Improvement and Assurance Panel
as part of the ongoing discussion on options for securing ongoing
financial sustainability for the Council. For 1 Drayton Road, the
asset could be retained as it is revenue producing. However, the
financial benefit of a disposal at the red book valuation is
significantly better than retaining the current income stream.
Disposal is therefore the recommended option.