Report of the Acting Strategic Director, Economy, Innovation & Growth
The Committee received a report which provide an overview of the current arrangements in place with Public Sector PLC (“PSP”), details of the workstreams underway and gives an update on performance.
PSP is a private sector company, set up in the 1990s to assist public sector organisations to meet their aims and objectives, through the delivery of property-based projects and solutions.
PSP has established a Limited Liability Partnership with 20 Local Authorities in England. In January 2017, Gateshead Council and PSP established PSP Gateshead LLP (“the LLP”). On 1 April 2019, the Council transferred the majority of its Tenanted Non-Residential Portfolio (“TNRP”) by way of a 7 year lease, the Limited Liability Partnership is managed by 2 Boards, the operational board is chaired by Keith Purvis and the Partnership Board is chaired by Councillor Donovan.
The LLP now undertakes the day to day management of the TNRP including, lettings, rent reviews, lease renewals, surrenders and debt management. The Council seconded a number of staff from the Property Services team, to the LLP, to ensure continuity of the property management function.
The idea is that at the end of the 7 year arrangements the Council get back a more valuable property portfolio, better rent and poorly performing assets are traded out.
The Council gets a guaranteed rent as if we had managed the portfolio ourselves with no risk to the Council, anything above is shared through a profit arrangement. The LLP has currently generated £2.3m between 1 April and 30 September and the Council is covered with its rent of £1.15m to the half year. The LLP has actioned 29 rent reviews, 4 of which have been completed and 30 lease renewals have been actioned with 4 completed. The LLP has also progressed plans for the development of new industrial floorspace at Team Valley Business Centre.
The LLP has also made progress on the following projects:
Nest Road Felling – a vacant 5 acre site in Council ownership. Proposals are being developed for the creation of a new investment asset. Ideas include a new Energy based facility (Solar Farm, Fuel from Waste Plant, Hydrogen Production Plant) or traditional industrial floorspace.
Clasper Village – a vacant 1 acre site adjacent to the proposed residential development, which now has planning approval. The LLP is progressing feasibility for a new small supermarket development and has engaged Agents to attract an operator on new leasehold terms.
Modular Housing – the LLP is undertaking a Viability Assessment for the development of a new 15 unit residential scheme on the former Front Street school site in Whickham. The scheme is predicted on off-site modular construction, in partnership with PSP’s sister company, Net Zero Buildings. The house types are carbon neutral and highly energy efficient. The proposed tenure is Affordable Rent.
Social Care – the LLP is currently in discussions with the Council to develop a property solution for the Independent Living service.
It was queried how this fits in with the social aims of the Council. It was noted that this is an ongoing agenda item at the Board meetings.
RESOLVED - That the information contained within the report be noted.