Commercial Properties, Value and Costs
- Is the council really transferring £2bn worth of its existing property?
- Where did the £2bn figure come from?
- Which properties from the commercial portfolio would be affected?
- What is the current or latest money value of those properties currently designated as Commercial Portfolio?
- What would happen to the tenants of the council’s commercial portfolio?
- Would the council’s community buildings be transferred into the development vehicle?
- Which properties do the council own?
- What is the total value of all the council's land and buildings?
- What has the council spent on the Haringey Development vehicle so far?
No. The value of the land proposed for transfer is far lower than that – the value of land changes all the time, but the land currently proposed for transfer to the HDV is worth in the tens of millions. The £2bn figure refers to the estimated value in 2015 of new development on all those sites – development which would not be possible without the HDV.
Earlier modelling showed an estimated total value of up to £2bn for the first phase of sites proposed for development by the HDV. This is the total market value of the assets once the development is complete not the current value of the land. However, as you would expect on a project of this scale, work still to be done on detailed scheme planning; regular variations in property value, and the longer-term option to bring forward more sites through the HDV mean this figure would very likely change.
The £2bn figure was derived as part of the financial appraisal which underpinned the business case for the HDV approved by Cabinet in November 2015 . The work was done on our behalf by GVA Bilfinger and Turnberry Real Estate in 2015.
The November 2015 report to the council’s cabinet included a provisional list of the properties from the council’s commercial portfolio that could transfer to the HDV. This list has been refined since then (an updated list was included in the July 2017 Cabinet report), and this would continue as the council and its private partner prepare for the establishment of the HDV. The businesses and other tenants of the commercial portfolio would be kept informed about whether the property they occupy is proposed for transfer, and about the process for doing so.
What is the current or latest money value of those properties currently designated as Commercial Portfolio?
The most recent valuation of the council’s entire commercial property portfolio is £67.8m. This covers the whole portfolio, not all of which would be proposed for transfer to the HDV.
The terms of commercial tenants’ leases would be unchanged – other than they would switch from being with the council to being with the HDV. Indeed, one of the main drivers for transferring the commercial property portfolio to the HDV is to improve the way the portfolio is managed, which is partly about giving tenants the best possible service. We would continue to keep tenants informed if any transfer were to go ahead.
The council owns a number of buildings which are leased to community organisations on terms that reflect those organisations’ contribution to the life of the borough. These buildings would not transfer to the HDV except where they are proposed for redevelopment as part of a wider HDV-led regeneration programme. In those circumstances, the council and HDV would always ensure that community facilities were reprovided in the new development or elsewhere.
Other council-owned buildings are from time to time leased, on commercial terms, to organisations with a community focus. These buildings are proposed to transfer to the HDV as part of the wider commercial portfolio.
The council’s most recent Asset Management Plan states that: ‘The council’s current property estate includes a wide range of land and buildings with a total value (for accounting purposes as at 31st March 2015) of £1.996 billion, comprising £1.252 billion held in the Housing Revenue Account (HRA) and £ 0.743billion held in the General Fund Account (GF).
The total cost of the project to procure a partner with which to establish the Haringey Development Vehicle, and to complete the process of its establishment, is now expected to be £2,466,628. This breaks down as:
- Commercial Advice - £440,527
- External Legal Support - £1,068,766
- External Legal Support (Judicial review) - £238,184
- Project Management - £308,244
- Internal Recharges (Legal Advice) - £267,473
- Internal Recharges (Judicial Review advice) - £12,515
- External Finance Support - £36,725
- Securing Energy Performance Certificates - £48,500
- Other costs including contingency - £45,694
These figures exclude any legal costs that would arise for the council if permission were granted for an appeal against the decision on the judicial review relating to the HDV.
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