Decision Maker:

Outcome: Recommendations Approved

Is Key Decision?: No

Is Callable In?: No

Date of Decision: April 10, 2025

Purpose:

Content: (1)  That confirmation of the award of £20m in Government funding to deliver the Skills and Education Campus and the ongoing discussions with the Ministry of Housing, Communities and Local Government (MHCLG) to monitor progress be noted.   (2)  That the confirmation of the award of £6m by the Combined County Authority (CCA) towards two Council capital projects including £4m towards the refurbishment of St. John’s for a new Digital and Cyber Hub and £2m towards the Skills and Education Campus be noted.   (3)  That the provisional agreement of terms with the University of Central Lancashire (UCLAN) to occupy a new building (Building 1) as indicated on the site masterplan drawings attached to the report as Annex 1 (existing site plan) and Annex 2 (proposed site plan) be noted.   (4)  That it be noted the appointment of building contractors to construct Building 1 and the external public realm works would be presented to a future Executive Board meeting following the conclusion of a competitive tender process to finalise costs and programme.   (5)  That the site masterplan drawing attached to the report as Annex 2 illustrating outline plans for Building 2 with the Council in discussions with various parties to determine levels of interest with the delivery of Building 2, a follow-on phase be noted.  It was also noted Maple Grove Development was granted a non-exclusive land option by the Executive Board in November 2024 for Building 2 to bring forward a speculative development should the opportunity arise.   (6)  That it be noted the estimated development costs for the Project were £45m which comprised £32m for Building 1 and £13m for external works which included highway realignment, service diversions, flood basins, landscaping and public realm.   (7)  That a capital budget of £45m (excluding VAT) be approved for the Project which included £20m of Government funding and £2m of CCA funding with the remaining £23m funded by the Council.   (8)  That £23m of capital funding, with £13m reallocated from the existing capital programme, together with £10m of supplementary capital (borrowings) which would be secured by way of a property lease to UCLAN with rental income covering the additional borrowing costs be approved.  The lease agreement also included an option for UCLAN to pay an upfront premium to the Council in lieu of future rents and to acquire the freehold.  Either way the Council would be covered for the additional borrowings.   (9)  That it be noted the Project would drawdown funding from the Government and CCA before using Council funding, thereby reducing costs to the Council by delaying borrowing costs.   (10)        That it be noted an updated planning application would be submitted under Section 73 of the Town and Country Planning Act 1990 to reduce the building height to reflect the latest requirements of UCLAN and to reduce capital costs.   (11)        That delegated authority be granted to the Strategic Director Finance and Resources and the Deputy Director of Legal and Governance to conclude the necessary legal formalities to satisfy compliance with the Subsidy Control Act.   (12)        That the granting of a long lease to UCLAN on commercial terms with no break clauses and contracted within the Landlord and Tenant Act 1954, be agreed in principle, including the principle of an option to pay a premium to acquire the freehold.   (13)        That the risks profile of the agreement for lease and the obligations to cover future adverse cost fluctuations caused by interest rate movements or unexpected inflationary pressures, together with developer risk be acknowledged and accepted, and it be noted an appropriate level of development contingency had been included in the capital funding.   (14)        That delegated authority be granted to the Growth Programme Director and the Deputy Director of Legal and Governance to finalise lease terms with UCLAN with the final commercial agreement to be subject to a future report to the Executive Board.   (15)        That the appointment of Turner and Townsend and BDP Architects for Project and Cost Management with Multi-Discipline Design Services for the Project be approved following a competitive tender process using the Crown Commercial Services Framework.   (16)        That the appointment of Casey Construction as the Civil Engineering Contractor for the highways and enabling works be approved following a competitive tender process using the Council’s Growth Framework.   (17)        That the appointment of United Utilities to progress the design and construction works for the sewer diversions in Ainsworth Street, required to enable Building 1 to commence on site be approved, and delegated authority be granted to the Growth Programme Director and the Deputy Director of Legal and Governance to finalise cost and terms and complete the necessary legal formalities for the United Utilities Agreement.   (18)        That delegated authority be granted to the Growth Programme Director and the Deputy Director of Legal and Governance to finalise and complete the necessary legal formalities for the Consultancy Agreement with Turner and Townsend and the Civil Engineering contract with Casey Construction.   (19)        For the reasons set out in the report, the waiver to the requirements of the Council’s Contract Procedure Rules be endorsed and the appointment of Blake Morgan solicitors be approved to prepare contracts for the appointment of Turner and Townsend as lead consultant for the Project and to commence work on preparing the Agreement for Lease, Building Lease and Building Contract for the Project which would all be subject to a future report to the Executive Board.   (20)        That the Growth Programme Director be authorised to commence the procurement of a building contractor using either the North West Construction Framework (managed by Manchester City Council) or the Council’s own Growth Framework and the successful contractor be appointed under a Pre-Construction Service Agreement with the appointment of the construction work subject to a future report to the Executive Board, once design, costs, programme and risk had been finalised.   (21)        That delegated authority be granted to the Growth Programme Director and the Deputy Director of Legal and Governance to finalise cost and terms and complete the necessary legal formalities for the Pre-Construction Services Agreement.