Agenda item

Appendix 4 to the report is in the exempt section of the agenda at Item 21.

Further to Minute 128 (30 June 2014), the Cabinet Member for Finance, Growth and Investment introduced a report on the delivery proposals and funding options for phase 2 of the Gascoigne Estate (East) regeneration scheme.

With phase 1 due for completion in early 2018, the Cabinet Member stressed the importance of maintaining momentum into Phase 2 and he referred to the proposed mix of units within the phase 2 which he felt represented an equitable combination of tenures.  It was noted that the Living and Working Select Committee (LWSC) had undertaken a pre-decision scrutiny of an earlier draft version of the report and had made a number of observations and recommendations which were detailed in the report.

The Cabinet Member confirmed that, as with phase 1, the residential development would be delivered in partnership with East Thames Group, via the creation of Special Purpose Vehicles (SPVs) within the Barking & Dagenham Reside structure and the charity Barking Renew.

The Cabinet resolved to:

(i)  Agree the appropriation of the land, as shown edged in red in Appendices 1 and 2, at Phase 2 (including the site for Greatfields School) under Section 122 of the Local Government Act 1972 from the Housing Revenue Account to the General Fund following completion of the decanting and demolition of each block, to enable the delivery and regeneration of the eastern side of Gascoigne estate via the proposed delivery structure;

(ii)  Agree that the residential units in Phase 2 be developed in conjunction with East Thames Group and the Council acting as joint development manager;

(iii)  Agree to the establishment of a Special Purpose Vehicle (SPV) within the Barking and Dagenham Reside structure to develop, own and procure the construction, management and maintenance of 100 affordable rented and 115 shared ownership units;

(iv)  Agree to the sale at practical completion of 115 shared ownership units to East Thames Group;

(v)  Agree to the establishment of a SPV within the B&D Reside structure to develop, procure the construction and sale of 140 private sale units to be sold on the open market jointly with East Thames Group / London and Quadrant Housing Trust;

(vi)  Agree to the principle of borrowing up to £23.49m within the General Fund from the Public Works Loan Board and/or the European Investment Bank to finance the development and ownership of the affordable rent homes via a loan agreement made between the Council and the affordable rent SPV;

(vii)  Agree to the affordable rent SPV being legally owned for the funding term by the Barking Renew Charity and B&D Reside for the purposes of owning, managing and maintaining the units in accordance with the funding terms in a loan agreement between the Council and SPV;

(viii)  Agree to the principle of borrowing up to £26.02m within the General Fund from the Public Works Loan Board and/or the European Investment Bank to finance the development and ownership of the shared ownership homes via a loan agreement made between the Council and the shared ownership SPV;

(ix)  Agree to the principle of borrowing up to £15.12m within the General Fund from the Public Works Loan Board to fund 50% of the cost to bring forward the private sale properties via a loan agreement between the Council and the SPV;

(x)  Agree to the principle of borrowing up to £26.02m within the General Fund from the Public Works Loan Board to fund the cost of the shared ownership units to be sold to East Thames Group via a loan agreement between the Council and SPV;

(xi)  Agree to grant a 252 year lease to the SPV which shall terminate at the option of the Council at the end of the funding term(s), with full ownership reverting to the Council;

(xii)  Delegate authority to the Strategic Director of Finance and Investment to negotiate and agree funding with the Greater London Authority and an institutional investor to support the delivery of the First Steps Challenge Fund Programme being developed by the Greater London Authority, to support delivery of a shared ownership programme;

(xiii)  Delegate authority to the Chief Executive, in consultation with the Director of Law and Governance, the Strategic Director of Finance and Investment and the Cabinet Members for Finance, Investment and Growth and Economic and Social Development, to negotiate terms and agree the contract documents to fully implement and effect the Gascoigne Phase 2 development; and

(xiv)  Authorise the Director of Law and Governance, or an authorised delegate on her behalf, to execute all of the legal agreements, contracts and other documents on behalf of the Council.