Interview with Andrew Edwards March 15th 2010

Interview with Andrew Edwards Peterborough City Council’s Head of Strategic Property, on their plans to sell off the Lady Lodge Arts Centre for use as a private care facility. Paul Stainton’s Peterborough Breakfast Show – March 15th 2010 08:35 am.

Interview with Andrew Edwards Head of Strategic Property Peterborough City Council on Paul Stainton’s Peterborough Breakfast Show concerning the planned sell-off of the Lady Lodge Arts Centre to a private nursing facility.

PS: Before all that though, news that plans have been finalised to sell the former Lady Lodge Arts Centre in Orton Goldhay. If approved, a specialist care home will be built to cater for young people with disabilities. Andrew Edwards is the Council’s Head of Strategic Property. Morning ..
AE: Good morning Paul, how are you this morning?
PS: I’m very good thank you. The sun is shining, it’s a spring-like day across Peterborough. I can see it streaming in through the window in Priestgate. Beautiful day, and remind us of the history behind the Lady Lodge which was an arts centre for a while, wasn’t it, but it sort of fell into disrepair, didn’t it.

AE: Yes. The arts centre, as you said, came out of use a number a couple of years ago for that use. And we had a number of tenants in there, but because of what can best be described as anti-social behaviour they have decided that their aims were best met by going elsewhere. Of course, the less people you have in one of these buildings, the more it becomes subject to vandalism. And unfortunately about twelve or eighteen months ago, we had to make the decision that the best way forward was to demolish the building, and to look at future use of the site. The problem of course is that as a landowner, as a property owner, we still remain responsible for the health and safety. Even if people decide to climb on the roof themselves, and my concern was for both the future of the Council and for the individual who may have been trespassing, that they would have fallen through the roof, done themselves serious injury, and whilst we as a council may have been liable, it wouldn’t have done them any good whatsoever either. So we move forward, demolish the asset, and at the same time we were looking for potential future uses of which the use of a building as a care home came to the fore.
PS: How far along are we in the selling off of this land?
AE: Right. We are in the position at the present moment where as you’ve picked up we’re getting Member approval to dispose of the site, hopefully before the end of this financial year, We will then get into what’s described as the conditional contract with the purchaser. The purchaser then, though, will have to move forward and get a detailed planning consent. Once they have that detailed planning consent in place, we will then be able to go ahead and finalise the deal. So, you know, it’s a couple of months before everybody puts their signature on the bottom of the document.
PS: Will it raise a lot of revenue for the Council?
AE: It’ll raise a significant amount of capital. But in terms of a disposal like this, we look at a number of things. Legally we’re required to get best value for the Council and best value isn’t necessarily just the capital receipt. The best value needs to look at the benefits that a disposal will actually bring. In this instance, as you’ve said, there’s a care provider who will be taking up use of the site, but also, holding a site like this, like any other site, has a financial implication. If it’s an asset, if it’s a physical build asset, you still end up paying rates and things like that on it, so we have to look at it in the whole.
PS: This is part of a bigger sell-off, isn’t it, of council assets, though.
AE: Yeah we have, we have had, for a number of years now, a disposal programme, and that disposal programme, the capital receipts from that disposal programme, go forward to fund council objectives. The point is that in this current market we have to be very careful that we’re not undervaluing or underselling assets, so we look at, as I said, things in the whole.
PS: That’s what I was going to say. It’s a crazy time to sell really, isn’t it? Surely the land prices and property prices have dropped significantly?
AE: Yes but what we can do is look at, if you like, alternative ways of selling things. Developers and acquirers, and I wouldn’t say this is a general comment – it doesn’t apply to organisations like healthcare, which work under a different set of rules, but what we do, if somebody is interested in acquiring a site, we look at protecting the value into the future. So we may look, for argument’s sake, at getting into a conditional contract, but revaluing the land a couple of years down the line, which would mean that we’d get a greater payment further down. In addition, it would be very unusual these days to accept a one-off payment up front. What a developer wants is to give us a payment as the development progressed, a phased payment over time.
PS: Why do we need to sell-off our Crown Jewels and our bits of land, our assets? Why should we? Why don’t we keep hold onto them? Why do we need to get rid of them?
AE: Well I think the point is that we’re not selling off our Crown Jewels. What we’s doing ..
PS: But you have to sell off five per cent year on year don’t you?
AE: No we don’t have to sell off anything year by year. What we do is we set the target of five per cent year on year. But what we actually look at doing is retaining those assets that we have a need for, so you know, if we have a significant asset that’s still being used, still is of benefit to the council,  we will hold it. If on the other hand the asset is no longer of use and we can use the money from it in some other way we will move ahead and dispose of that asset.
AE: Is there anything else in the pipeline we plan to sell?
AE: Well there is, as I say, if people care to look at the Medium Term Financial Strategy, and there is a long list of sites that we are actually proposing to look at.
PS: <Laughter> To be fair, Andrew, nobody’s going to read that, are they? Any highlights from that?
AE: No it tends .. in the next couple of years we’ve got for example The Grange which is going for a detailed planning consent, we’re looking at the John Mansfield School sites which are scheduled for disposal, and I’m quoting here ones which were, I won’t use the word ‘controversial’, which were mentioned in the past, so yes we have a programme of disposals. But, the point I would make is because something’s in there, doesn’t necessarily mean we are going to dispose of it. What in fact we will be doing is to look at whether or not there is a justification for disposal at this moment in time.
PS: Andrew, thank you for that. Andrew Edwards the Council’s Head of Strategic Property. Your thoughts on that …. Is it the right time for the council to sell off assets? Should they hold on to them?