Lease and option to purchase the premises at 24 McLeod Street, Edinburgh
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1 Finance and Budget Committee a.m., Thursday, 6 June 2013 Lease and option to purchase the premises at 24 McLeod Street, Edinburgh Item number Report number Wards 7 Sighthill/Gorgie Links Coalition pledges Council outcomes Single Outcome Agreement P17, P23 C09 SO1 Mark Turley Director of Services for Communities Margaret Mitchell, Estates Surveyor margaret.mitchell@edinburgh.gov.uk Tel:
2 Executive summary Lease and option to purchase the premises at 24 McLeod Street, Edinburgh Summary To progress the lease/sale of the premises at 24 McLeod Street to the Edinburgh Prison Officers Club. The property which is shown outlined on the attached plan, is held on the Services for Communities, General Property Account. It comprises a detached pavilion constructed circa It was most recently used as a clinic by the NHS who vacated in September The property is in poor condition and needs a number of structural repairs. The Edinburgh Prison Officers Club was first established in 1957 to provide a safe environment for prison officers and their families to socialise. The Club has over 700 members and is run by a 19 member Committee with a Chairman, Treasurer and Secretary. The Club has raised a large amount of money for charities both at home and abroad over the years and has made its premises available for a number of local businesses, fund raising groups and organisations free of charge. It ran a number of successful clubs as well as running a programme of exercise classes each week. The Club has recently had to vacate its existing premises due to the sale of the land and buildings by the current owner and as a result had to rehouse a number of the social clubs and classes who met at the property as well as making 24 full and parttime staff redundant. The Edinburgh Prison Officers Social Club looked at a number of vacant properties and identified that the subject property at 24 McLeod Street most suits its requirements. The Club looks forward to taking on new premises, build stronger community relationships and be even more successful in the future. It is intended to recruit at least 15 new staff from the local community for the new venue. It has been provisionally agreed with the Edinburgh Prison Officers Club that it be granted a 25 year full repairing and insuring lease subject to the following terms and conditions: Rent: Initial rent of 18,000 per annum (independently confirmed as market value). Term: 25 years with upward only rent review to market value at years five, ten, fifteen and twenty. Finance and Budget Committee 6 June 2013 Page 2 of 4
3 Purchase option: the tenant has the right to purchase on the fifth, tenth, fifteenth and twentieth anniversary at market value to be agreed by the parties, failing agreement the price will be determined by an independent Registered Valuer of the Royal Institute of Chartered Surveyors (RICS) The lease will have six months rent free to reflect the repairs that will be carried out by the tenant. Use: Social club Fees: The tenant be responsible for CEC s and their own legal, surveying and administrative fees as well as meeting all other expenses including Stamp Duty, registration dues, and the cost of obtaining extracts. Recommendations To approve the grant of a 25 year lease and option to purchase of the former clinic at 24 McLeod Street to the Edinburgh Prison Officers Club on the terms and conditions outlined in the report and on such other terms and conditions to be agreed by the Director of Services for Communities and the Head of Legal, Risk and Compliance. Measures of success A vacant building which has suffered vandalism will be occupied and reduce the Council s liability. Financial impact An increase in the Services for Communities General Property Account amounting to 18,000 per annum. (Subject to the reduction of the rent free period, in first year) for the first 5 years of the lease excluding VAT. A potential future capital receipt in year 5, 10, 15, or 20. Equalities impact The letting will remove a vacant building which has attracted anti-social behaviour. This will enhance the feeling of security for neighbouring residents and promote health and well-being. A full Equality Impact Rights Assessment has been completed. Sustainability impact A vacant former clinic will be occupied which will have a negative impact on the environment as it will increase the carbon footprint of the property. Any improvements the Prison Officers Club undertake will most likely improve the energy efficiency of the property. Consultation and engagement Not applicable to this report. Finance and Budget Committee 6 June 2013 Page 3 of 4
4 Background reading / external references None Mark Turley Director of Services for Communities Links Coalition pledges Council outcomes Single Outcome Agreement Appendices P17 - Continue efforts to develop the city s gap sites and encourage regeneration. P23 - Identify unused Council premises to offer on short lowcost lets to small businesses, community groups and other interested parties. C09 Edinburgh Residents are able to access job opportunities. SO1 Edinburgh s economy delivers increased investment, jobs and opportunities. Location plan Finance and Budget Committee 6 June 2013 Page 4 of 4
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