Minutes:
The Strategic Lead for Economic Development and Neighbourhoods introduced the report which had been agreed in principle by the Corporate Policy and Resources Committee.
It was recognised that securing a hotel in Gainsborough should have a positive impact on the town in terms of its regeneration improving market attractiveness, addressing a known demand for bed spaces and making an economic contribution in terms of new jobs and additional business rates. The Sun Inn had been vacant for over five years despite active marketing and a planning consent for a hotel. The building had been the subject of vandalism and the adjoining Chapel Alley was in a very poor state of repair. The building was located on the corner of Market and North Street and was considered a key gateway into the town centre. Upgrading Market Street would entice footfall from Marshall's Yard into the town centre. Market Street had a number of empty properties and dereliction adjoining the Sun Inn.
In progressing the Gainsborough Regeneration Delivery Plan (GRDP) and in discussions with Historic England to bid for a Townscape Heritage Initiative, officers had lobbied the owners of the Sun Inn to implement the hotel planning consent or refurbish the building. These discussions had resulted in the current proposals to assist in the delivery of the hotel with a ground floor restaurant and the wider regeneration of Market Street to accelerate the delivery of regeneration in the town centre.
The Council’s commercial advisors had confirmed that the cost of developing the Sun Inn as a new hotel was higher than the end value, as such there was a viability gap. The Council had acknowledged the need to support commercial development in Gainsborough through the Gainsborough Growth Fund (a grant funding regime) and through the creation of enabling funds for the GRDP. An options appraisal to assess the best way of delivering a new hotel here had been undertaken. The conclusion had been given the existing planning consent that the owner was best placed to deliver this project based on their existing land interests, their expertise and vested interest, and to safeguard the Council from development risk.
Lengthy debate ensued with Members expressing differing views as to the desirability of the project and whether this was the best use of the Council’s resources. Further clarification on any potential investment return was sought, and it was acknowledged that the most significant return would be from the multiplier effect and subsequent regeneration of a rundown area of the town. There were clauses built into the agreement which could realise a financial return in due course, and there would also be the receipt of business rates.
The Strategic Lead for Economic Development and Neighbourhoods stated that the Council was fortunate to have secured a hotel chain which had agreed to site in Gainsborough at such a strategic location which was a gateway to the town. Some Members, whilst supportive of the hotel in principle, still had reservations regarding the use of tax payers’ money and the public perception of this.
The Strategic Lead for Economic Development and Neighbourhoods assured Members that the form of grant proposed was normal practice and completely legal and that without the proposed offer Gainsborough was not a viable opportunity to attract other investors. The Council had to think boldly if it wanted quality, and the proposals reflected a wider view of regeneration, which it was suggested could be extended further into town to encompass the Market Place. A number of other investment examples were cited as demonstrations of both good and poor outcomes.
It was moved and seconded that the recommendations in the report be agreed en bloc, and on being voted upon it was:
RESOLVED that:
a) the principle of the redevelopment of the Sun Inn, which involves the creation of a new 54 bedroom hotel with an independent ground floor restaurant, in accordance with the wider regeneration strategy for Gainsborough, (to be funded in accordance with resolution passed at Corporate Policy and Resources Committee on 22 September 2016) be supported;
b) the entering into a 50/50 joint venture company with the developer to facilitate the regeneration of Market Street (including the acquisition of vacant shop units, refurbishment of shop units and environmental improvements to the area) as part of the Gainsborough Regeneration Delivery Plan, be approved; and
c) authority be delegated to the Chief Executive in consultation with the Leader and Chairman of Prosperous Communities Committee to finalise both the requisite Grant Funding and Joint Venture Agreements (in accordance with the contents of this report and the legal and financial parameters), and to return to both Prosperous Communities and Corporate Policy and Resources Committees for approval prior to the execution of the Grant Funding Agreement and Joint Venture Agreement.
Note: Councillors Milne and Smith requested that it be noted that they had voted against the recommendations.