West Marina Land Disposal and Development

Concepts

• west marina
• construction work
• hastings
• west marina land disposal
• development agreement
• residential development of land
• west marina land disposal and development
• west marina st leonards ltd
• development of the site
• high quality development

Location

West Marina, Seaside Road, St Leonards on sea

Description

A development agreement for commercial and residential development of land at West Marina, Seaside Road, St Leonards-on-sea, and associated grant of leases and transfers of freehold properties.

Total Quantity or Scope

Hastings Borough Council (the Council) is entering into an agreement with West Marina St Leonards Ltd (WMSLL) for the development and disposal of land at West Marina, Seaside Road, St Leonards on Sea (West Marina). West Marina has been largely vacant for over 30 years following the closure of the former lido. The site represents an opportunity for land to be developed to create a high quality development which can help regenerate the area. Development of the site will include a mix of residential units (including some affordable housing) as well as commercial units, beach huts and ‘glamping spaces’. The arrangements will entail a minimum of 1 500 m2 of buildings comprising workshops/live work spaces within sui generis use class, 50 beach huts and 12 glamping huts as well as a minimum of 125 residential buildings and a car park. The Council invited proposals from two bidders, from which it's preferred partner has been selected.

Award Detail

CPV Codes

• 45000000 - Construction work

Indicators

• Award on basis of price and quality.

Legal Justification

The Council considers that the contract between the Council and WMSLL for the West Marina Development and Land Disposal falls outside the scope of Public Contract Regulations 2015 (PCR) as the main object of the transaction is a land transaction and not a public works contract. Therefore the Council relies on Regulation 10(1)(a) PCR, alternatively that the definition of a public works contract is not met. The Council considers that the contractual arrangements with WMSSL do not fall within the definition of a public works contract for the following reasons: 1) In respect of the land intended for residential use, the freehold will be transferred to WMSLL for a nominal value. Whilst the Council has stipulated the minimum number of residential units (125) and will be able to request variations to the plans and specifications for the construction of the residential units, WMSLL retain the absolute discretion to approve such variations. In relation to the land intended for the commercial use, the Council will dispose of this by way of a 250 year lease. The Council has specified a minimum number of 1 500 m2 of buildings comprising workshops/live works space within sui generis use class, 50 beach huts and 12 glamping huts. The Council has the right to approve the planning application in so far as it relates to the commercial development. The Council may (before the development commences) request variations to the plans and specifications for the construction of the commercial developments and WSMLL must not unreasonably withhold its approval of any such variation (although it may do so if the variation would, in WSMLL’s reasonable opinion, have a significant adverse financial consequence to WSMLL). There is no absolute obligation on WMSLL to carry out the works as it has a right to issue a notice of unsatisfactory survey and subsequently terminate the agreement. 2) In terms of economic benefit, as said above the freehold of the residential units will be transferred to WMSLL following completion of the development albeit that the Council will have pre-emption rights over fifteen residential units for purchase at market value with a 5 % discount if the Council purchases six or more units. The Council will not retain nomination rights in relation to the affordable housing units. For the commercial units, in consideration of the grant of the 250-year lease the Council will derive a rent. The rent is fixed at a minimum amount. There is an additional rent paid in the form of 50 % of the profits generated by the commercial units once the commercial development has been completed. Given the length of the lease, the Council does not anticipate to obtain an economic benefit from the development itself as by the time the land reverts back to the Council the works are likely to no longer exist. The Council therefore considers that the contract is outside the scope of the PCR.

Other Information

The Council has decided to award a contract to WMSLL which is wholly owned by County Gate Properties Holdings Ltd (‘County Gate’). County Gate's bid is guaranteed by the Generator Group Ltd who replaced County Gate's original proposed guarantor Sunley Holdings Ltd. Contract award value: the total value encapsulates the potential redevelopment of the West Marina site based on it's capacity for both commercial and residential redevelopment and represents the gross development value prior to any redevelopment costs. Contract award date: The Council agreed initial heads of terms with WMSLL at a Cabinet meeting on 4 March 2019. Subsequent negotiation were held, resulting in confirmation of heads of terms in July 2019 by Cabinet.