1 - PROJECT DETAILS 1.1 PROMOTER S INFORMATION. Title and full name of main contact: Position: Strategic Development Coordinator.
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1 Strategic Outline Business Case Please complete this to enable an initial assessment of your project. Once completed, please return by to by 5pm on 8 th December PROJECT DETAILS 1.1 PROMOTER S INFORMATION Title and full name of main contact: Position: Lead Partner: Lead partner organisation size: Other delivery partners & roles: Address for correspondence: Postcode: Strategic Development Coordinator Bassetlaw District Council District Council None Queen s Buildings, Potter Street, Worksop, Nottinghamshire. S80 2AH Phone: PROJECT INFORMATION Project title: Project name and summary (please append any graphics): Project Location: Harrison Drive, Langold units The delivery of 4 x 92sqm of light industrial workshops in Langold (see Appendix A for plans) to meet the identified shortfall in public funds to allow the District Council to host 4 additional businesses to this economically deprived part of the SCR. Langold, S81 9RL Total project cost: 274k Amount of funding sought from SCR: 100k Confirmation of other funding: Is the funding requested a loan or a grant or a mix of both? If a mix, please specify percentage split: 174k will be provided by the Council from borrowing against the projected revenue generated from the new units. Grant For loans, please suggest your preferred term (length), repayment preference (instalments or maturity) and type (discounted, commercial, etc.). Briefly outline your rationale for this suggestion: Proposed start and end dates for project: N/A Start date: May 2018 End date: December 2018
2 1.3 Main Project Theme Place an x against one theme Skills Transport Housing Infrastructure Other [please specify] 1.4 Secondary Project Themes Support building of small industrial units Place an x against all that apply Skills Transport Housing Infrastructure Other [please specify] 1.5 Does the project have the approval of the relevant local authority? If no, when is this expected? If yes, please provide evidence of this. Yes Please see Appendix B for letters of support from the Chief Executive and the Leader of the Council. 1.6 Do you have full internal approval for this project to commence works? If no, when is this expected? Yes Cabinet approval has already agreed the principle of redeveloping the site, subject to a business case being agreed by the s151 officer 1. Unfortunately, Officers have not progressed with the scheme to date, as there is an identified funding gap. If SCRIF funding was to be secured, there are no further approvals required as the s151 has approved this bid and associated business case for borrowing. 2. STRATEGIC CASE 2.1 What is the rationale for public sector investment in this project? 150 words max This is a public sector led project to increase the amount of commercial premises the Council has within its stock and available to local people. The public sector investment is being requested as the project does not stack up financially without public funding. The Council has reviewed all the projected revenue from this phase of development as part of a detailed business case spreadsheet (see the two scenarios shown in Appendix C), and does not provide a strong enough case to allow borrowing to cover the cost of the project alone. As shown in the business case, the total cost of the scheme would take 13 years to pay back, with the public funding. This period is regarded as a fair term for the repayment of the original stake in this specific project. Without the LEP funding, the payback period would be 24 years. The Council considers this as too long a pay bac period for this type of development. 1 Report can be found:
3 2.2 Which of the SCR objectives below does this project contribute to? Objectives 1. Increasing SCR s Gross Value Added by improving productivity Place an x against the objectives that your project aims to directly deliver. 2. Increasing the number of jobs/employment rate in the SCR X 3. Rebalancing the economic base of the City Region by increasing the proportion of private sector employment and helping to address the performance gap between SCR and the Greater South East 4. Capitalising and enhancing the quality of life in the SCR and delivering sustainable economic growth X X 2.3 Please set out the objectives of the proposed project. Briefly show how these align with the relevant SCR objectives you have selected in words max The proposed new units will deliver 368sqm of new floorspace for light industrial/workshop units, which are much needed in the area. This is to build on the existing units success and to create a further 4 units of 92sqm each. This project will provide new job opportunities in the private sector for around 8-10 jobs in an economically deprived area 2. Langold has been identified as a growth area in the Council s Core Strategy and therefore the proposal will assist improving the quality of life in the SCR and delivering economic development in a sustainable location. 2.4 Is the scheme compliant with statutory plans and processes (e.g. Local Authority planning policy and economic/ housing growth strategies, transport needs, provision of education)? 100 words max The Council has identified Langold as a settlement with regeneration opportunities and can support moderate levels of growth, as set out in the Council s adopted Core Strategy. Policy CS5 states that Economic development proposals, which deliver employment opportunities in Carlton-in-Lindrick and Langold, will be supported within the Development Boundary. This site is within the development boundary of Langold and has previously had permission, which has since lapsed. The type of units proposed are in-keeping with the current development, which are in high demand and would planning policy compliant. 2.5 Will your project have any implications for the existing transport network and its users? No If yes, please summarise the results of your transport assessment below. 100 words max Due to the scale and nature of the units being proposed, any impact on the existing transport network will be negligible. This is supported by feedback from the County Highways team. 2 Such as higher than average Job Seekers Allowance/Employment Support Allowance.
4 3. COMMERCIAL CASE 3.1 Please justify and evidence the need for this project i.e. define the problem/barrier that this project will address. Outline the evidence that supports this including any market testing or modelling work you may have carried out. 100 words max The project builds upon the current units at Harrison Drive, which were constructed in These ten light industrial/workshop units are 75sqm in size and have been very popular locally. In the last three years, the occupancy rate has been largely static and before that it has had minimal vacancies. The Council has also commissioned Savills to undertake an independent market appraisal of the demand and rental levels which demonstrated that there is local demand for such units. The funding is required to meet the shortfall in funding that the Council can contribute to the project (through borrowing based on project revenue from the scheme). 3.2 Please identify the key risks to the project and any dependencies on other projects or investment. 75 words max Planning permission low risk, high impact proposal already had planning permission, but lapsed and so will need to be reapplied for. Principle has been accepted and so is low risk. Application for the proposal will be submitted in January Funding from borrowing not secured low risk, high impact principle has been accepted elsewhere and the s151 officer is in agreement with the details so low. Without the funding from borrowing, the match funding is not available. Costs overrun low risk, medium impact contractors have already been engaged with the drawings and provided detailed costings. BDC would have to cover any cost increases, if required. Demand for the units low risk, medium impact although there appears to be local demand, this type of unit is very difficult to predict until the units have been built and marketed. 3.3 If this scheme is reliant on private partners / stakeholders to deliver outputs, outline any discussions, procurement, negotiations or process undertaken? 75 words max The project will be delivered by one contractor, Evergreen Group Ltd, who the Council will appoint, upon confirmation of the funds. Evergreen were the preferred contractor after the Council ran a formal procurement process earlier this year. Evergreen have prepared all the plans for the planning application, which is due to be submitted in January 2018 and are ready to start on site, once funding has been secured. 4. ECONOMIC CASE 4.1 Please complete the relevant tab(s) in the Proforma provided.
5 See Appendix F. There will be 8 FTE manufacturing jobs created across 2018/19 and 2019/ Summarise the main assumptions you have made in forecasting outputs and outcomes. 50 words max The numbers of jobs are estimated to be between 8-10 jobs. The HCA employment densities study would set the figure at 10, if working on the basic that 1 FTE per 36sqm of general industrial workspace. However, the lower figure is based on the local knowledge of the numbers of people working in the other units (which although slightly smaller are a reasonable comparable). Delivery rates are based on the timetable of works and expected swift take up on the units, once completed. 4.3 What is the likely range of uncertainty around your forecasts (e.g. 10%-90%)? 50 words max Due to the nature and scale of the proposal, it is not considered that any uncertainty will have a significant impact on the delivery timeframe or actual numbers of jobs created. The jobs created are estimated to be between 8-10 and will all be completed by December 2018 (uncertainty level low at 10%). 4.4 Briefly outline the other options considered and why none of these are deemed suitable. 100 words max The only option, apart from do nothing, is to find funding from elsewhere. Currently, the Council does not have any other available funds currently to spend on this project (aside from the borrowing we have demonstrated will be repaid from the revenue generated). Furthermore, there are no other funding sources currently available for such a scheme (including the D2N2 LEP). Securing funding now would mean that there are four more businesses which will be able to have a premise in Langold and help support the local economy. 5. FINANCIAL CASE 5.1 Spend / Funding Profile (A) Total Private Investment ( ) (B) Total Other Public Sector Investment (non- SCR funding) ( ) (C) Total SCR Funding Sought ( ) (D) Total Project Investment ( ) (A+B+C=D) SCR as % of Total Project Investment 17/18 18/19 19/20 20/21 Total Funding Status 174, ,000 Secured 100, ,000 Grant request 274, ,000 36% 36%
6 Degree of certainty of cost estimates 60% - The specific requirements for the project have been worked up in detail with the Council s Property team. Evergreen, the preferred contractor, have then priced for this work, based on these specific requirements. There may be some amendments to the cost, but a 5% contingency has been included to help reduce the risk of any unplanned overspends. 5.2 Please outline any additional work required to confirm project costs / funding and when this is likely to be completed. 75 words max The Council is committed to bringing this site forward swiftly and is currently preparing a planning application. This is due to be submitted in January Once the funding has been confirmed, the preferred contractor will then complete the detailed drawings and specification and is expected to commence on site in summer, to be completed by December If funding sought is part or wholly grant, please justify why 100% loan is not suitable. 100 words max The 100k funding being sought is wholly grant, as BDC have taken on the risk of borrowing the remaining amount. Consideration was given to securing the remaining 174k through a loan, but this loan could be repaid back over an estimated 5-year period (linked to any surplus generated from the project s revenue), which did comply with the information contained with the prospectus. 6. MANAGEMENT CASE 6.1 Please provide your timetable for delivery. Please justify your response considering factors such as the time required to secure statutory powers, secure match funding, procure contracts etc. Key Milestones Date Comments All funding secured Completed S151 officer has agreed the level of borrowing which will act as match funding. Cabinet / other external approvals Completed Cabinet approval has been given in December 2015, subject to the sign off of the s151 officer. Procurement complete Completed The preferred contractor would need to be officially awarded the contract. Statutory processes complete March Planning approval to be received by March Land acquisition complete Completed Land is within Council s control Start on site April 2018 Preferred contractor is ready to go once funding is secured to start on site by April/May 2018 Scheme opening December 2018 Scheme will take around 6 months to complete and so will be fully opened by the end of 2018 (providing the funding is secured by March 2018) 6.2 Where appropriate, please indicate whether the following have been secured, agreed fully or agreed in part, or provide an estimation of when they are likely to be secured. Insert N/A if not applicable to the project. If not fully agreed, please provide a summary of the remaining tasks. Delivery Constraint / Risk Planning consents Status Lapsed, new application to be submitted Completion Date March 2018 CPOs N/A N/A N/A Comments on remaining tasks Application will be submitted in January.
7 Public consultation N/A N/A N/A Public inquiry N/A N/A N/A Traffic regulation orders N/A N/A N/A Transport and works act N/A N/A N/A Public sector match Fully agreed Funding Private sector match N/A N/A N/A Funding Procurement contracts Preferred contractor identified Once funding has been secured Revenue funds N/A N/A N/A Partnership agreement N/A N/A N/A Other statutory N/A N/A N/A processes 6.3a Explain the State Aid evaluation of Project. Applies, but does not meet all the tests Need to officially appoint Details regarding State Aid can be found at: 6.3b If the project involves provision of State Aid, please indicate the amount of State Aid provided and under what heading / project. If the project does not amount to State Aid funding, please provide an explanation as to why; making specific reference to the State Aid tests. Do not leave this section blank. Here is a summary of the key criteria for State aid and a commentary on whether there are applicable to this project: The aid is granted by the State or through State resources - Yes The aid confers an advantage on the recipient - Yes, potentially The aid is selective, favouring only certain undertakings or the production of certain goods - No It distorts or threatens to distort competition Potentially It affects, or has the potential to affect trade between Member States No As all 5 tests have not been met and the area is classed as an assisted area, it is considered that state aid is not an issue. SIGN OFF Officer responsible for the application (the relevant Executive Director in your organisation) Officer name: Role: Date: 08/12/2017 Director of Regeneration and Neighbourhoods Counter signatory Director of Finance Officer name: Role: Date: 08/12/2017 Head of Finance and Property
1 - PROJECT DETAILS 1.1 PROMOTER S INFORMATION. Title and full name of main contact: Position: Investment and Economic Initiatives Manager
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