Minutes:
The Committee gave consideration to a report which sought support from Members to recommend to the Corporate Policy and Resources Committee the granting of a commercial loan of £200,000 to support the redevelopment of a site and creation of new business units within Caistor.
Providing support and infrastructure for start-ups and the micro-business sector was a priority for WLDC and was clearly identified within the West Lindsey Economic Growth Strategy.
Members have previously considered the report at their meeting on 6 June 2017, and deferred the decision pending further information regarding the Business Plan in order that they could be assured that the Project was likely to deliver as expected.
In presenting the report Officers indicated that all those concerns previously raised by Members had been further investigated and the outcome of each, and further re-assurance was reported in the table included within the Executive Summary of the report.
It was noted that there was a drafting error within the legal agreement at 3.1 (b) (i) and Officer gave assurance this would be rectified, should the proposal be agreed.
Debate ensued and a number of Members indicated that the additional information provided, was most useful and had given them the assurance they had required. However some other Members still had concerns regarding the proposal, they were not convinced that the business need had truly been established, making reference to previous similar developments within the town of Gainsborough, which in their view had not delivered their original objective. There were concerns around the financial soundness of the business, the ability of the Council to recover its monies in the event of non delivery and a number of Members were still concerned over the relationship of the applicant with a particular Member of the Council.
In responding Officer’s re-iterated the advice which had been received from the Monitoring Officer, regarding the applicant’s position. It was also stressed that it was important to treat all applicants the same, despite who they may be related to, this should not disadvantage a resident / business within the District.
The Committee were reminded of their role, noting that the financial detail was the remit of the Corporate Policy and Resources Committee to determine. Members of this Committee needed to assure themselves that these proposals were in line with the Committee’s aspiration for Economic Growth and Business development across its market towns.
Officers stressed in bringing this proposal to Members it was in acknowledgement that there were currently no specific funding streams for rural developments, as there were in Gainsborough, and considered this development did meet the Council priority of rural economic growth.
In the fullness of time it was likely that a Commercial Loan Policy would need to be developed as such requests were likely to continue to be made.
Some Members acknowledged that a bank’s decision to lend, looked at different factors, with little or no acknowledgement of any social return and regeneration benefits the proposal would be bring to an area.
Officers again re-iterated the proposed mitigation measures which would be put in place to safeguard the loan, including those listed in the Section 151 Officer Comment’s section of the report. In responding to comments it was further confirmed that any future sale of the land would only be with the Authority’s permission (if a loan was agreed).
A Member indicated that he could not see reference to a first charge, included in the legal agreement and again Officers, undertook to ensure this was included (if a loan was agreed).
Following much debate and opposing views having been expressed, it was: -
RESOLVED to RECOMMEND to the Corporate Policy and Resources Committee that: -
(a) a Capital Budget of £200,000 for a commercial loan to Hillcrest Park Properties Ltd, to enable the redevelopment of the Hillcrest site in Caistor in line with the planning permission which has been granted and this be funded from Prudential Borrowing, be approved. (The commercial loan to be conditional on the applicant securing a full funding package for the development and providing evidence to this effect);
(b) the proposed Loan Agreement, appended to the report be approved; and
(c) the Director of Resources in consultation with the Chair of the Policy and Resources Committee be granted delegated authority to agree any final changes to the Loan Agreement (including pre-conditions).
Note: Councillors Young, Rainsforth and Darcel requested that their votes against the above decision be recorded.
Note: The following three items were introduced jointly, due to their “linked” nature, however each item was then voted on individually.