Forge Island Redevelopment

Concepts

• forge island
• rotherham
• building construction
• forge island redevelopment
• respect of the regeneration of forge island
• forge island development opportunity
• rotherham metropolitan borough council
• cost of the enabling contract
• development partner
• construction work

Location

Barnsley, Doncaster and Rotherham: Forge Island, Rotherham

Description

Rotherham Metropolitan Borough Council (Council) intends to enter into further agreements with its development partner, Muse Developments Limited (Developer) in respect of the regeneration of Forge Island, Rotherham through the development of a new anchor leisure development. This project forms a key part of the Council's town centre regeneration masterplan.

Total Quantity or Scope

The Council intends to enter into further contractual arrangements with its Developer to take the Forge Island development opportunity forward and realise the Council's aspirations for the site, within the context of challenging market and financing conditions. Additional information: For transparency, the total value of this procurement stated at II.1.7 (£46,805,664) is made up of 2 contract sums as follows. £3,012,012 is the cost of the enabling contract, with £43,793,652 making up the remaining costs from the total value. The total construction cost is £33,726,000. The total development cost of £46,805,664 includes pre-construction costs, design marketing, professional fees, letting costs, tenant incentives and development management fees.

Award Detail

CPV Codes

• 45210000 - Building construction work
• 45100000 - Site preparation work
• 45212100 - Construction work of leisure facilities
• 45212150 - Cinema construction work
• 45212170 - Entertainment building construction work
• 45212171 - Entertainment centre construction work
• 45212400 - Accommodation and restaurant buildings
• 45212410 - Construction work for lodging buildings
• 45212411 - Hotel construction work
• 45212420 - Construction work for restaurants and similar facilities
• 45212421 - Restaurant construction work
• 45213100 - Construction work for commercial buildings
• 45213312 - Car park building construction work
• 45213313 - Service-area building construction work
• 45300000 - Building installation work
• 45400000 - Building completion work
• 45500000 - Hire of construction and civil engineering machinery and equipment with operator

Legal Justification

In 2018, following a competition to secure best value, Muse Developments Limited (Muse) was selected as the development partner to deliver the regeneration of Forge Island, Rotherham. The arrangement was not considered to constitute a public works contract for the purposes of the Public Contracts Regulations 2015. The project envisaged that Muse would secure external funding but allowed for alternative options, including for the Council to partially or fully fund the development to be considered. Due to unforeseen market conditions, particularly shifts in the gilt market, the external funding available to Muse for the delivery of this project has significantly reduced. The Council was notified of this issue on the 13 September 2022. Against this backdrop, the Council intends to enter into a funding agreement with Muse to fund and retain the project and will take market standard security relating to this funding, including an obligation on Muse to develop in accordance with an agreed specification. The Council considers that the project is strictly necessary as a key part of the Rotherham Town Centre Masterplan and that acting as funder is the only reasonable option to secure delivery of the project (there being no alternative funding options available within a reasonable timescale or within a cost that would make the scheme viable) and considers that this proposal will secure best value for the Council. Maintaining the current programme is essential to enable satisfaction of existing contractual obligations with tenants. There is an imperative to act urgently for the following reasons: - The scheme is anchored by a cinema, which has a date for satisfying conditionality of 31 December 2022. The scheme will no longer be viable if the cinema agreement falls away, setting delivery back likely in excess of 2-3 years and jeopardising the entire delivery of the scheme. Recent developments in the cinema market indicate that identifying a replacement would be very challenging. - Construction costs for the project is currently tendered and fixed for a very limited period. Re-tendering of the construction works will add substantial additional inflationary cost and risk, threatening the viability of the project. Muse is in an exclusive position as it has developed designs, fully tendered and costed the scheme and has secured pre-lets with various occupiers meaning that competition would be absent for technical reasons. These designs and arrangements with occupiers, which are dependent on the agreement with the cinema proceeding, are exclusive rights that require protection. Given the complex nature of the project, and the extreme urgency described above, the Council does not consider that there is sufficient time to conduct a new procurement procedure. The Council has considered an accelerated procurement, concluding that it would be pointless as it would not allow bidders the opportunity to assemble a meaningful costed proposal or to secure deliverable agreements with end users. The Council therefore considers that it is permitted to utilise the negotiated procedure without prior publication on the basis of exclusive rights as a result of competition being absent for technical reasons (as provided for in Regulation 32(2)(b)(ii)) and, or in the alternative, on the basis of urgency (as provided for in Regulation 32(2)(c)).

Other Information

** PREVIEW NOTICE, please check Find a Tender for full details. ** It is important to note that at the point of publication of this VEAT, the Council has not formally awarded or entered into the Contract with Muse Developments Ltd, but is setting out its intentions to do so.