Minutes:
The Committee gave consideration to a report which sought support from Members to approve a RECOMMENDATION from the Prosperous Communities Committee for 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.
In presenting the report, Officers outlined the opportunities associated with the regeneration of the site, as detailed in Section 1.7 of the report. It was also noted that the project proposal had had support through the Caistor Neighbourhood Plan, had been granted planning permission, and had received a LEADER grant of £39k and would be seeking a further amount of circa £80k, totalling £119,000 The reasons why the applicant had approached the Council were outlined, together with the associated risks and mitigating measures which it was proposed would be in place to ensure any monies released were safeguarded.
This matter had been considered twice previously by Members of the Prosperous Communities Committee who had deferred the decision at their meeting on 6 June 2017, pending further information regarding the Business Plan in order that they could be assured that the Project was likely to deliver as expected.
Officers indicated that all those concerns previously raised by Members of that Committee 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 when the proposal had last been considered by the Prosperous Communities Committee a number of drafting errors within the legal agreement had been identified, these were outlined to the Committee and Officers gave assurance these would be rectified, should the proposal be agreed.
Officers also clarified why the interest rate for the loan had not been definitively set within the report but offered assurance on how this would be calculated and the percentage margins which would be achieved.
Debate ensued and a number of Members’ were supportive of the proposals and recognised the benefit and need for such development in the area. Members did query why assistance was being sought from the Local Authority as opposed to a bank. The applicant’s financial situation was outlined with Members, noting that the loan would cover the build.
In response to Members concerns, the Director of Resources again outlined the mitigations which would be put in place to safeguard the loan and offered assurance that all of these would be referenced within the legal agreement if the loan was agreed.
The total size of the site was clarified, together with how residual site valuation was calculated. Members considered any charge made should be on all land in ownership. Officers indicated personal guarantees could be considered as part of due diligence.
Having noted that the Loan would be drawn down against expenditure and on completion of each build stage, Members sought and received assurance that the position reported would be confirmed by a person appointed by the Authority. The Director of Resources confirmed this to be the case, and indicated who this would likely be.
Following much debate it was RESOLVED that: -
(a) the recommendation from Prosperous Communities Committee be accepted and 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 had been granted be approved. This to be funded from Prudential Borrowing and 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 recommendation from the Prosperous Communities Committee be accepted and the proposed Loan Agreement, appended to the report be approved subject to those drafting errors identified and reported to the Committee being amended; and
(c) the recommendation from the Prosperous Communities Committee be accepted and Director of Resources in consultation with the Chair of the Corporate Policy and Resources Committee be granted delegated authority to agree any final changes to the Loan Agreement (including pre-conditions), noting Members’ comments expressed during the debate.
Note: Councillor Young requested that his vote against the above decision be recorded.