The Forum, King's Quarter, Gloucester

Concepts

• gloucester
• non-residential real estate
• limited and reef estates
• market parade gloucester city centre
• king
• gloucester city centre
• reef estates limited
• dfa
• development funding agreement
• residential real estate

Location

Gloucester

Description

The Council will enter into a development funding agreement (DFA) with RG17 Limited and Reef Estates Limited (which are connected organisations) for a mixed use, urban campus known as King’s Quarter. The Council and Reef Estates Limited both have land interests in the site. They will deliver retail, leisure and office space, dwellings and a hotel together with a multi-storey car park. On completion of the development Reef Estates Limited will transfer its land interest to the Council. The development will be undertaken in 2 phases. Works required to deliver the development (and a number of consultancy services) will be procured in accordance with an OJEU or UK Find a Tender procedures or under Frameworks. Reef/RG17 will also provide management and maintenance services for 5 years. RG17 and Reef (or a group member) will take a 5 year lease of incubator offices and provide a guarantee to the Council in connection with rent from the hotel.

Total Quantity or Scope

The Council, RG17 Limited and Reef Estates Limited consider their arrangement to be a joint endeavour to work together to revitalise an area of the City Centre. An element of the arrangements includes an obligation on RG17Limited / Reef Estates Limited to lease the proposed incubator office space for 5 years and further to provide a guarantee to the Council in relation to rental income from the proposed hotel. In order to be transparent the Council has listed the total value at £94,000,000 (Indexed) – some 86% of that value will be subject to public procurement. OJEU procurement or Frameworks (for Phase 1) and after 31st December 2020 under the UK's 'Find a Tender Procedure' or existing OJEU Frameworks which the Council has access to. The development will be delivered in two Phases. Phase 1 is a site in Market Parade Gloucester City Centre and has a value of approximately £8 million (Indexed).This will deliver retail and residential space. Phase 2 will be centred at the Forum, King's Quarter site Gloucester City Centre and has a value of approximately £86 million (indexed). This phase will deliver office, hotel and leisure space, together with a multi-storey car park. Phase 2 will be subject to a viability test which may result in changes to the uses and size of buildings delivered or even that Phase 2 does not proceed. The medium and long term economic impact of Covid19 on urban spaces is still uncertain. The parties may enter into ancillary agreements with each other and/or with those third parties which they procure to provide development services/works. The parties also contemplate entering into lease and guarantee agreements with each other in order to give effect to RG17 Limited/Reef Estates Limited's commitment to lease the proposed incubator office space and provide a guarantee to the Council in relation to rental income from the proposed hotel. RG17 Limited and Reef Estates Limited are part of the same group of companies and it is possible (though not expected) that another of their group companies could be involved in these arrangements. As part of the arrangements RG17 Limited/Reef Estates Limited will also provide general management and maintenance services for a period of 5 years.

Award Detail

CPV Codes

• 70112000 - Development of non-residential real estate
• 70111000 - Development of residential real estate
• 70130000 - Letting services of own property
• 70220000 - Non-residential property renting or leasing services
• 70332000 - Non-residential property services

Indicators

Legal Justification

Award of a contract without prior publication of a call for competition in the Official Journal of the European Union in the cases listed below • The procurement falls outside the scope of application of the directive Explanation: The Council relies on the ground provided in Article 32(2)(b)(iii) of Directive 2014/24/EU and Regulation 32(2)(b)(iii) of the Public Contracts Regulations 2015 as this contract concerns assets which are subject to exclusive rights. Reef Estates Limited have an option over part of the land whereupon the development will take place. Accordingly, the agreement between the Council and Reef Estates Limited cannot be entered into with anyone else. The rights held by Reef Estates Limited/RG17 Limited are exclusive in nature. The Council would not be entering into an agreement to undertake this development but for the opportunity brought to it by RG17 Limited / Reef Estates Limited.