Decision Details

Report of the Acting Director, Inclusive Growth.

Forward Plan/CMIS Ref. 006459/2019 (old)

On 15 December 2020, Cabinet:

1. Approved the appointment of Lendlease Smithfield Development LLP as development partner for Birmingham Smithfield, and for the Council to enter into a JVA (“JVA”) and associated contracts including (conditionally) a Phase Development Agreement (separate Agreement per Phase) with Lendlease Smithfield Development LLP or (for each Phase Development Agreement) a special purpose vehicle (a “Phase PSP”);

2. Noted that Lendlease Europe will create one Phase PSP per Phase, which may be funded/owned/controlled up to 50% by third parties (over 50% with Council consent - as to which the Council has an absolute discretion). Each Phase PSP will develop the Phase with Lendlease Corporation guaranteeing development obligations under each Phase PSP; 

3. Noted that in accordance with the JVA the Birmingham Smithfield development will be delivered on a phased basis under a Phase Development Agreement. For each phase of the development the Council will grant a 250-year Phase Lease to a Phase PSP. The grant of each Phase Development Agreement and 250-year lease is subject to the discharge of conditions precedent as set out in the Legal Report in Exempt Appendix A, Annex C to the report;

    

4. Approved the delegation to the Assistant Director of Property, to grant a 250-year lease for the development, on a phase by phase basis, including for the first phase of the development, the following:

    

   • grant to the Phase PSP (and those authorised by it, or to whom it passes the rights), for the lease term of 250 years, of the right to use the market (once redeveloped by the JV PSP) as a market; and

   • in order to protect the markets, as redeveloped by the JV PSP, covenants by the Council, which are effective from the date of the JVA:

   (a) not to open or permit a competing market of equivalent scale to the market in the first Phase development, on any of the Council’s currently owned, or acquired land within the area shown on the plan at Exempt Appendix A, Annex D to the report (the Restricted Land), excluding any market which normally operates for a period of two consecutive months or less during any 12-month period; and

    

   (b) if the Council becomes aware that a third-party plans to develop a competing market of equivalent scale within the Restricted Land not in Council ownership, the Council will consult with Lendlease and the Phase PSP of the first Phase on whether the Council will exercise its statutory powers in relation to such market.

    

5. Approved the initial Birmingham Smithfield Development Business Plan as summarised at Exempt Appendix A to the report, Annex A;

6. Noted Lendlease Europe’s Masterplan contained in the Exempt Appendix A to the report, Annex A Birmingham Smithfield Development Business Plan, which is consistent with the Birmingham Smithfield Masterplan adopted by the Council in September 2016;

7. Endorses the submission of the Strategic Outline Case (SOC) (value of £131.4m) to Greater Birmingham and Solihull Local Enterprise Partnership (GBSLEP) as summarised at Exempt Appendix A to the report, Annex B, for GBSLEP Board approval on 5th December 2020;

8. Endorsed the submission of a change request to the GBSLEP for a further £1m of development funding, this sum will fund the project to Full Business Case (FBC) stage;

    

9. Delegated authority to the Acting Director, Inclusive Growth to submit the future Outline Business Case and Full Business Case to the GBSLEP;

10. Authorised the Acting Director, Inclusive Growth, to apply for, and receive via a grant funding agreement grant funding of £131.4m from the GBSLEP Enterprise Zone Fund. The funding will contribute towards the scheme by funding costs incurred by, or (through the Birmingham Smithfield Joint Venture Agreement on behalf of the Council), associated with infrastructure, and staff costs to support the implementation of the Birmingham Smithfield Development Business Plan.

11. Authorised the Acting Director, Inclusive Growth, to submit an Outline Business Case (OBC) and FBC to GBSLEP and receive grant funding (£5.7m of the overall £131.4m total) for the Enabling works included in the Wholesale Market and adjacent area asset management Cabinet report of 8th September 2020;

     

12. Approved the governance and the decision-making arrangements for the Birmingham Smithfield Development Joint Venture, including the Scheme of Delegations, comprising Joint Venture Members (key decisions); Project Board (management of the Joint Venture); and an Implementation Group (day-to-day running of the Development), as set out and detailed in Appendix C to the report, and delegates Authority to the Acting Director, Inclusive Growth, to adjust the Governance if required to include any changes associated with funding agreements;

13. Approved the procurement strategy for external property advice for the Smithfield Development using the Homes England Property Professional Services Framework Agreement, as outlined at Appendix E to the report;

14. Delegated the award of the contracts for external property advice for the Smithfield Development to the Assistant Director of Property Services, in conjunction with the Assistant Director - Development and Commercial (or their delegate), the Interim Chief Finance Officer (or their delegate) and the City Solicitor (or their delegate);

15. Authorised the Assistant Director of Property and the Interim Chief Finance Officer to commence the work to develop a business case to support an alternative Site Assembly Agreement, (which is detailed in Exempt Appendix A to the report). If the business case is deemed viable, it will be bought back to Cabinet at a future date for approval;

     

16. Delegated authority to the Acting Director, Inclusive Growth to enter into all negotiations and agree final terms for all legal agreements necessary to facilitate execution of the JVA and Site Assembly agreements;

17. Authorised the City Solicitor to finalise, execute and complete all relevant legal documentation to give effect to the above decisions;

18. Authorised the Director of Human Resources, in conjunction with the City Solicitor, to negotiate, execute and complete any documents, required to enact the TUPE transfer of staff to ‘the new entity’ created to develop the first Phase (Phase PSP) and/or another operating company which will be contracted with at the time to run the site;

19. Noted that a separate report is also being made to Cabinet to seek in principle the authority to develop the basis for making a Compulsory Purchase Order (CPO) to support the development of Birmingham Smithfield subject to due diligence and the case for CPO being established.

THE DEADLINE FOR CALL IN IS 1600 HOURS ON MONDAY 21 DECEMBER 2020