Agenda item

Cost Sharing Agreement with Coleg Gwent


The Leader presented to report to Cabinet colleagues who were aware of plans to develop a new, modern and energy efficient leisure and well-being centre next to the USW Campus on Usk Way and in turn dispose of the existing Newport Centre site to Coleg Gwent for their new city centre campus.  Plans were progressing well and planning permission for both sites has been granted.  The next step in this ambitious project is to start arranging for the demolition of the Newport Centre and finalise the transfer of the site to Coleg Gwent. These transformational developments are critical to the delivery of our economic growth ambitions and Corporate Plan commitments.


As a reflection of the Council’s excellent working partnership with Coleg Gwent on this project and the commitment of both parties to deliver a Newport Knowledge Quarter in the City centre, Coleg Gwent agreed to share the costs associated with the demolition of the building.  Cabinet colleagues might recall that the demolition of the Newport Centre was part of the Welsh Government conditions of funding for the new leisure and well-being centre.  Whilst it was previously envisaged that the capital receipt for the land would have covered the cost of demolition, we were well aware that project costs were subject to unprecedented inflation and it was expected that there would be additional costs over and above the value of the site.  It was possible that demolition costs alone could be approximately £1.2m but this would only be confirmed once the contract for demolition was formally tendered.  This tendering exercise was expected to be completed by the end of December and it was important that both the Council and Coleg Gwent had formal approval for the cost sharing before contracts were let.  There would also be agreement to share project costs of around £213,000 incurred to date as part of the process for securing planning permission, undertaking technical surveys and general project costs. 


This report was requesting that any costs over the agreed cost of the site were shared on a 50/50 basis between the Council and Coleg Gwent.  The Council would need to fund the entirety of the demolition costs up front, due to time constraints. Coleg Gwent would seek to reimburse their share of costs above the land value price once the demolition works were completed, with the £870,000 land receipt paid once the lease was granted.  The Coleg Gwent Board already agreed in principle to the cost sharing and was expected to be ratified at their next Board meeting.


The report also asked that Cabinet authorised officers to include all required land within the disposal agreement to Coleg Gwent as may be considered necessary or expedient for the purposes of the development. 


As already mentioned, the responsibility for demolishing the building rested with the Council.  There was no obligation on Coleg Gwent to share costs over and above the valuation of the site and as with all projects, there were associated risks.  There was a possibility that tenders would come back at a higher cost than estimated and Coleg Gwent were yet to secure funding for their new campus development.  The Council and Coleg Gwent remained committed to delivering the best facilities for residents and we needed to continue making positive steps to bring these projects to life. 


Comments of Cabinet Members:


§  Councillor Davies referred back to the Corporate Plan and the first welcoming objectives, which this project was at the heart of, and it therefore increased so many opportunities for the residents, including employment and access to excellent leisure facilities. Councillor Davies therefore supported the report.


§  Councillor Harvey added that this was an ambitious plan.  It did however show that the Council was listening to residents and that a state-of-the-art centre was needed for future generations.




That Cabinet

1)      Agreed to the proposed costs sharing arrangement in relation to all demolition costs, commit the capital funding provision required and authorise the relevant officers to enter into an agreement for lease with Coleg Gwent and proceed with the necessary demolition work on this basis.


2)      Authorised officers to include such additional land within the disposal to Coleg Gwent as may be considered necessary or expedient for the purposes of the development and the surrounding public realm, and to make any such necessary stopping up orders as may be required to facilitate this.

Supporting documents: