Members considered the report of the Executive Director which sought approval to proceed with developing a recently acquired commercial site, and to use £10m of the £35m approved budget for the Property Investment Strategy (PIS).

The Council had recently acquired land for commercial purposes on the Barnhorn Green mixed-use scheme (known locally as Rosewood Park) for the sum of £600,000.  The Property Investment Panel (PIP) had approved the purchase on 25 April 2019 and the sale was completed on 5 July 2019; a plan of the site was attached at Appendix 1 to the report.

The site measured approximately 1.5 hectares and the commercial element comprised of 25.5 hectares.  Barnhorn Green was allocated as a key commercial development project in the Council’s Corporate Plan.  Outline planning permission was granted in 2014 for up to 3,500sqm of employment office / light industrial floorspace, as well as a doctors’ surgery to accommodate up to 10 GPs.  The site was expected to generate approximately 200-230 jobs dependent on the final use of the buildings.

It was noted that the site was subject to an overage agreement which would remain in force until 19 January 2089 or the date all buildings were constructed pursuant to planning permission.  Should the site be developed outside the permissions of the granted outline planning, the Council would be liable to beneficiaries under the overage agreement for 30% of any uplift in value once planning permission was obtained or the site was sold.

Advice had been sought from the external valuer regarding options for varying the mix of uses, subject to planning consent.  Several options were presented to the PIP for consideration.  The lowest risk and opportunity to generate income would be to replace office space with light industrial accommodation.  Any variation would require additional planning consent.

Members were advised that the development of a doctors’ surgery would represent an opportunity for the Council to facilitate improved local healthcare facilities, as well as generate a secure income stream.  Discussion had commenced with the Clinical Commission Group and East Sussex Healthcare Trust and good progress was being made.  Development of a new, modern GP facility was considered essential to support the existing population and potential housing growth in the area.

Following completion, it was anticipated that the combined rental income of the commercial floor space (under the existing approved mix) and doctors’ surgery would be in excess of £640,000 gross of voids.  The net yield was projected to be in excess of £160,000 per annum.

The Council had approved borrowing of £35m for investment under the PIS; £10m was required and would be allocated from the Capital Programme.  The additional income generated formed part of the overall financial strategy to reduce the net cost of the Council and achieve a balanced Revenue Budget.  It also contributed to the regeneration strategy for the district, providing jobs and business space.

Once approved, officers would commence the procurement process for professional services.  It was anticipated that full planning consent would be achieved by March 2020 and construction delivered over a phased basis.  Members requested that consideration be given to including some form of modest retail / café within the development and any resulting liabilities this would cause to beneficiaries under the overage agreement.  Whilst this would meet the Council’s desire to reduce the carbon footprint and unnecessary car trips to local amenities in Little Common this had to be judged against supporting a sustainable economy within Little Common itself.  

Cabinet fully supported the project and agreed that it would provide improved healthcare and local employment opportunities, as well as generate much needed income for the Council.

RESOLVED: That:

1)     £10m from the approved £35m Property Investment Strategy Capital Programme be allocated for the development of commercial property and a doctors’ surgery on land adjacent to Barnhorn Road recently acquired by the Council; and

2)     the Executive Director be authorised to:

a)     develop and submit a detailed planning application for the proposed development;

b)     procure the works set out in this report and enter into contracts as necessary for the completion of this development; and

c)     agree the lease with the local Clinical Commissioning Group, GPs and the East Sussex Health Care Trust.