Agenda item

To consider the Solicitor to the Council’s Report No. LEG1517 (copy attached), which sets out a proposal to assist the Source, following its  decision to vacate the premises at Boulters House, No. 237 High Street, Aldershot.

The Cabinet considered the Solicitor to the Council’s Report No. LEG1517, which set out the circumstances that had led to the Source deciding to vacate the property at Boulters House, No. 237 High Street, Aldershot and to relocate to a smaller premises. The Report also detailed how it was proposed that the Council might assist the charity in this situation. Members heard how the property at Boulters House had been purchased by the Source in 2006 and it was explained that, at that time, the Council had loaned the sum of £350,000 towards the purchase price. The term of the loan was ten years and it was secured by a charge over the premises. Since 2010, financial difficulties had meant that the Source had struggled to make repayments on the loan. In December 2014, the Source had told the Council that it was seeking to make the charity self-sustaining through its bike project but, to do this, had identified that a move to smaller, more affordable premises was necessary. To aid the Source with relocating, the Council had commissioned a survey, which indicated that serious structural defects existed at Boulters House. It was estimated that repair costs in the medium term were likely to total around £160,000 and, therefore, it was considered that the property was beyond economic repair.

The Council had assisted the Source to identify new premises and it was proposed that they would relocate to Suite 3 on the ground floor of Wesley Chambers. It was further proposed that the Council would pay the first year’s rent of £20,000 to the landlord on behalf of the Source. The total mortgage debt owed to the Council in respect of Boulters House totalled £328,125 in capital terms plus outstanding interest payments. It was proposed that the Council would receive the transfer of the ownership of Boulters House in repayment of the debt. The redevelopment of that site would produce a capital receipt to offset the amount owed to the Council. It was not known at this time whether the total debt would be cleared by this action but, in any case, it was explained that the Source had no other means to pay the amount owed. For this reason, it was recommended that this course of action would lead to the best possible outcome for all parties.

Members were keen to support this local charity and were appreciative of the valuable services the Source had delivered to young people over a number of years. It was agreed that this proposal offered a clear way forward for both the Source and the Council.

The Cabinet RESOLVED that

(i)           the Solicitor to the Council be authorised to:

-              pay the first year’s rent of £20,000 to the landlord of Wesley Chambers upon the granting of the lease;

-              reimburse the valuation fee to the Source for the valuation of Boulters House;

-              take a transfer of Boulters House in consideration of the release of  the Council’s legal charge over the premises;

-              take all steps necessary to bring Boulters House forward for redevelopment; and

(ii)       supplementary estimates in respect of the first year’s rent, the valuation fee and stamp duty on the transfer of the premises to the Council be approved.