Purpose

Update to the financial and
commercial position to the Red Clover Gardens report presented to
Cabinet in July 2023. This report will request entering into
contracts with the various Counterparts as the legal due diligence
concludes.
 

Content

The Executive Mayor
resolved:
 

1.1           
To approve that the Council, in its
capacity as Shareholder and Lender, agrees for Brick By Brick
(Croydon) Ltd (BBB) to defer the capital receipt for the sale of
the three affordable blocks (B, D and E) at Red Clover Gardens; and
allow the Council to take a direct charge over the freehold of the
three blocks as financial security and set-off the loan balance
with BBB by the amount of the deferred capital receipt (detailed in
the Part B report).
 

1.2           
To agree that the Council enter
into a Headlease with Regen Capital or any related
associate, funder or investor, for 125 years of 85 units at the Red
Clover Gardens development, but also not pay any headlease payment
until the deferred capital receipt has been paid.
 

1.3           
To agree the initial
Peppercorn Headlease with Regen Capital or their associate entity
and subsequent surrender and regrant of a Full Rent Headlease once
the Council has entered into the
Underlease (final terms yet to be agreed). Further details in the
confidential Part B report.
 

1.4           
To delegate to the
Corporate Director of Housing, in consultation with Director of Commercial Investment and Capital, to enter into the final agreed Underlease with Plexus
(First Project) RP and to agree amendments to commercial terms
upto a total value of
£1m.
 

1.5           
To approve that the
Council enter into the following
additional agreements/ documents with their respective
counterparties; Nomination Agreement with Plexus RP (Subsidiary of
Mears), Pre-emption agreement with RCG Coulsdon Ltd (Subsidiary and
Associate of Regen Capital), Building Warranties with development
contractor and any relevant deed of covenant in relation to Estate
Management arrangements.
 

1.6           
To delegate authority
to the Corporate Director of Resources and S151 Officer to enter
into a Representation Letter with a prospective funder/Lessor to
the Headlease, should one be requested
 

1.7           
To delegate authority
to the Corporate Director of Resources and S151 Officer to enter
into any documents/ agreements required to give effect to the
recommendations regarding the deferred payment and direct charge,
as Shareholder and/ or Lender of BBB, including but not limited to variation of the
BBB facility agreement, registration and discharge of the
property charge at the relevant time.

 

1.8           
To note that the
revised offer from Regen Capital and updated financial implications
as indicated in the confidential Part B report.
 

1.9           
To note the legal
summary reports to the Headlease and Draft Underlease in
Confidential Appendix 1a and 1b of the confidential Part B
report.