Decision details

To consider the report of the Cabinet Member for Economic Development seeking approval to the restructure of leases at Nelson Gate.

(i)  To approve the lease restructuring proposals and recommendations set out in exempt Appendix 1.

(ii)  To delegate authority to the Executive Director for Growth and  Prosperity following consultation with the Leader of the Council to finalise the detailed terms of the arrangements required to support the delivery of the regeneration of the area.

1.  As freehold owner, the Council wishes to support the regeneration of the Nelson Gate “complex” including the recladding of the existing office buildings together with an upgrade of the surrounding public realm incorporating a mix of uses consistent with its ambitions for the good growth of the city. The current leases restrict opportunities for regeneration and therefore need altering to facilitate this.

2.  Allowing the changes to the leases as recommended in exempt Appendix 1 acknowledges the impacts of macroeconomic challenges faced by construction projects over recent years, gives the leaseholder certainty that it can undertake Development but also allows the Council to actively monitor and support delivery of the regeneration required in this area. The scheme is expected to be delivered in two phases. The first phase, focusing on the existing buildings and their immediate surroundings, is projected for completion by September 2026. However, it is important to note that this timeline is a challenging target. The S.123 report prepared by external specialist valuers, confirms that the proposals represent best consideration to the Council than the existing status quo.

1.  Do nothing.

The existing buildings and their immediate environment are run down and out dated and provide a poor impression of the City, given this is a key gateway site. The length of the existing leases provide no incentive for the leaseholder to take any action thus resulting in further neglect and decline.

2.  The Council sells its existing freehold interest.

The Council has looked at the possibility of selling its interest in the open market although that would place the leaseholder in a strong position and would result in the Council losing any control both in terms of nature and timing over regeneration proposals, other than through Planning policy.

Purchase the existing leasehold interest.

Whilst this would give the Council total control over redevelopment of the site, it would come with the financial burdens of owning empty buildings and the management of those buildings whilst other options are considered.