Agenda item

This report is to follow.

The Head of Commercial Business presented the report to Members that summarised the work of the Sovereign Centre Task and Finish Group. The Group had looked at what options would be available for the Sovereign Centre following the construction of a new leisure centre.

The Group’s January 2019 meeting had included discussion with Stiles, Harold, Williams (commercial agents) to obtain professional, commercial advice on a broad view of the options.

The Group recognised that there was a demand for housing in a beach-front location and affordable housing would form part of the development profile. High quality retirement homes and villages were also acknowledged as a national target market. Other options looked at were: beach-front leisure facilities (water-sports), beach huts, and the opportunity for a convenience store (metro/express style of shop).

A mixed use of development was the preferred option for further exploration with a strong focus on a sustainable community in terms of a residential development, and the opportunity for economic growth through tourism and commercially related activity.

During discussion by Members the following points were highlighted:

The Council remained committed to the development of a new Sovereign Leisure Centre. The budget of £29.1 million represented a significant investment and it was incumbent on the Council to recognise its exact position in the market, as part of the process of following due diligence. The Council was working with Clear Sustainable Futures through a   process for the joint venture assessing the construction and capital costs, as well as the revenue income opportunities.

It was advised that consideration was being given to a waste to energy facility within the design of the centre, which could enhance the scheme by reducing utility costs and the carbon impact, but would require an additional capital allocation.  Councillors asked if there was the option to retro-fit such an energy facility as part of any refurbishment of the Sovereign Centre, but it was confirmed that the design of older buildings and the need to include facilities in the fabric of the building would make it very difficult to develop a viable scheme.

The business case for the new Centre was based on the budget and construction costs for that project alone. There had not been any cross-subsidy from other adjacent schemes to date. There was no ‘marriage’ value to adjacent sites and the new scheme for the Sovereign Centre was expected to work within its own budget.

Within the options appraisal process it made sense for the design and architectural elements of two builds to be worked on side-by-side, however, in terms of a business-case, the scheme for a new Sovereign Leisure Centre and the scheme for redevelopment of the existing site were two separate business cases (including capital and revenue income). If there were opportunities for cross-subsidising schemes, they would be utilised where beneficial. Officers would provide as up-to-date information as was available supporting the two schemes.

An early assessment of housing provision within the scheme estimated between 200-250 units (apartments) which would be high-density and reflect other areas of Eastbourne. The requirement for affordable housing within a development of this size was 30 percent and would be included in the options appraisal. The Task and Finish Group was mindful of the opportunity to produce a high quality design within the scheme and to attract young professionals who would feed into the economic growth of the Eastbourne.

It was confirmed that the business case reviewed by the Cabinet in July 2018 remained as the relevant report. If a further scheduled review came forward, the Scrutiny Committee would have an opportunity to review it (once fully formed) prior to its consideration by the Cabinet.

RESOLVED:

1.    To note the outcomes achieved by the task and finish group on reviewing the development options for the Sovereign Leisure site based on commercial advice and guidance sought; and

2.    To agree to recommend to Cabinet that the future redevelopment options laid out in section 2.1 of the report (as below) be agreed to progress in principle with further due diligence on the financial and legal implications of each option undertaken;

Details of options in Section 2.1 of the report:

1)    High quality residential development – the advice given was to look to develop an ‘iconic’ building which could rival other seaside town regeneration and attract a good level of investment.

2)    Affordable housing – the demand for affordable housing continues to increase and any development would need to be planning policy compliant meaning it would be likely a requirement of permission for residential development to be granted. 

3)    Retirement homes / village – coastal towns such as Eastbourne have a good market for older persons housing and agents are actively seeking sites in seafront locations for this style of development.

4)    Beach front leisure/water sports – given the geographical location of the site there are clear opportunities to explore the development of water sports facilities which would enhance the overall development offer 

5)    Beach huts – there were examples of significant beach hut expansion on seafront estates in other locations which produce a good commercial return.

6)    Convenience store sub 5,000 sq. ft – this would be a commercial element of a residential scheme on the ground floor. 

3.    To agree to recommend to Cabinet that a report is provided to a future meeting of Cabinet to allocate a budget for the required enabling works and due diligence to develop an options appraisal and business case to redevelop the site; and

4.    To recommend to Cabinet to request a wider public consultation.