Agenda item

Report No:   CAB/SE/16/028

Portfolio Holder: John Griffiths        Lead Officer: Alex Wilson

RESOLVED:

That:

(1)     the content of Report No: CAB/SE/16/028 be noted;

(2)     the Director be authorised to update the 2013 Memorandum of Understanding for the Guildhall Project on the basis outlined in paragraphs 1.5 and 1.8 of Report No: CAB/SE/16/028.

RECOMMENDED TO COUNCIL (28 June 2016):

(3)     The principle of making a bridging loan in autumn 2016 to enable progression of the conservation works at the Guildhall, be approved; and

(4)     if the loan is required, the Head of Resources and Performance, in consultation with the Leader, the Portfolio Holder for Resources and Performance and the Services Manager (Legal), be authorised to negotiate and agree the terms of such a loan with the Bury St Edmunds Heritage Trust Ltd and/or the Guildhall Feoffment Trust and to issue the funding and necessary legal agreements, taking into consideration the Council’s loans policy and subject to the value of the loan not exceeding a professional valuation of 79 Whiting Street, Bury St Edmunds (against which it will be secured).

The Cabinet considered Report No: CAB/SE/16/028, which sought approval for changes to be made to the Memorandum of Understanding (MOU) related to the Guildhall Project, and for assistance by way of providing a bridging loan, if needed, to enable the Project to progress.

In March 2013, the Council joined a consortium with the Guildhall Feoffment Trust and the Bury St Edmunds Heritage Trust Limited to pursue a major refurbishment project for the Guildhall, with the additional long-term aim of making the Guildhall an independent and sustainable community enterprise.  This joint venture was defined by a Memorandum of Understanding (MOU) which was approved and signed in 2013 between the three parties, and contained provisions for the asset management of the Guildhall and its companion property, 79 Whiting Street for the duration of the project.

The report provided further details of the basis upon which the MOU was required to be updated, and as detailed in paragraphs 1.5 and 1.8, which was in response to the evolvement of the refurbishment project and the greater certainty given regarding the granting of Heritage Lottery Fund (HLF) funding.

Councillor John Griffiths, Leader of the Council, drew relevant issues to the attention of the Cabinet, including that in May 2016, the project was awarded a grant of £669,000 from the HLF for the refurbishment.   Details of the type of conservation work to be undertaken were summarised in the report.

A condition of the HLF grant was that the necessary match-funding must be assembled by October 2016 and, if it were, works could start at that time, with a targeted completion date of summer 2018.   The Heritage Trust was now seeking the balance of that match-funding, from a variety of sources. 

The Borough Council entered into the project with the partners in 2013 on the basis that the taxpayer would not be required to provide direct capital support.  However, a potential short-term scenario had been identified whereby committed sources of match-funding assembled in the coming months were not technically available to the Trustees to spend by the HLF funding deadline in autumn 2016 (for instance if committed from a 2017/18 budget).  The Trustees had therefore requested that, if there was reasonable certainty the match-funding would be achieved, the Council would, as a fall-back option, consider offering them a bridging loan, if required, this autumn to guarantee the project would go ahead.   This would achieve the objectives of the MOU and address the largest project risk, which was the loss of the HLF grant.

Further details regarding proposed terms for granting a loan were provided in the report, together with the possibility of the need for the Council to continue to carry out urgent and essential repairs to the Guildhall and 79 Whiting Street prior to any transfer of any responsibility. Such repairs, would however, be funded from the rents received from the two properties.

The Cabinet supported the proposed changes to the MOU and recognised the need to have a fall-back option, by way of providing a bridging loan, should the promised funding not be in place by October 2016, thus minimising the risk of losing the HLF grant.

Councillor Joanna Rayner, Portfolio Holder for Leisure and Culture, and Alex Wilson, Director, were formally acknowledged for their work in assisting with the progression of this commendable project.

RESOLVED:

That:

(1)     the content of Report No: CAB/SE/16/028 be noted;

(2)     the Director be authorised to update the 2013 Memorandum of Understanding for the Guildhall Project on the basis outlined in paragraphs 1.5 and 1.8 of Report No: CAB/SE/16/028.

RECOMMENDED TO COUNCIL:

(3)    The principle of making a bridging loan in autumn 2016 to enable progression of the conservation works at the Guildhall, be approved; and

(4)    if the loan is required, the Head of Resources and Performance, in consultation with the Leader, the Portfolio Holder for Resources and Performance and the Services Manager (Legal), be authorised to negotiate and agree the terms of such a loan with the Bury St Edmunds Heritage Trust Ltd and/or the Guildhall Feoffment Trust and to issue the funding and necessary legal agreements, taking into consideration the Council’s loans policy and subject to the value of the loan not exceeding a professional valuation of 79 Whiting Street, Bury St Edmunds (against which it will be secured).