1
Personal Particulars
1.1
My name is Andrew William Nash.
1.2
My qualifications are:
1.2.1 Honours degree
in Estate Management;
1.2.2 Masters degree
in Business Administration;
1.2.3 Fellow of the
Royal Institution of Chartered Surveyors (Associate, Valuation and
GP division from 1978);
1.2.4 Member of the
Chartered Management Institute.
1.3
I am employed by Bath & North East Somerset Council (“the
Council”) in its Property Services Department as its Valuation
Manager and Project Manager for the Scheme.
1.4
I am directly responsible to the Head of Property & Legal
Services (see section 3 below for a summary of the organisation of
the Council).
1.5
I have been directly involved in the proposals for the
redevelopment of Southgate since circa December 2003. Prior to that
date, I headed the Council’s Valuation Team responsible for
commercial estate management, management of the Council’s
self-occupied properties and property development.
1.6
I currently lead the Council’s Property Services negotiating team
in relation to the Scheme and will continue to lead the
cross-Council team securing the Scheme's delivery.
2
Scope of Evidence
2.1
My evidence will address the following matters:
2.1.1 The organisation
of the Council (see section 3 below and Appendix 1 attached);
2.1.2 How key
decisions relating to property transactions are dealt with (see
section 3.8 below);
2.1.3 The extent of
the Council’s property portfolio (see section 4 below);
2.1.4 The Council’s
aspiration to see the Southgate area redeveloped (see section 5
below);
2.1.5 The Council's
objectives in its property negotiations with CGNU (see section 6
below);
2.1.6 The evolution of
the Scheme and human rights considerations (see section 7
below);
2.1.7 The key features
of the Order Schedule and Maps (see section 8 below); and
2.1.8 The
deliverability of the Scheme (see section 9 below).
2.2
In my evidence I have adopted the abbreviations and definitions set
out in the Glossary of Key Terms submitted as CD 10.9.
2.3
Unless the context makes it clear to the contrary, my evidence
deals with the Council’s role as a property-owner.
3
Organisation of the Council
3.1
The Council operates under a “Leader and Cabinet” Member
structure.
3.2
There is a total of 65 Councillors in Bath and North East
Somerset.
3.3
The Council refers to its Cabinet as an “Executive”.
3.4
The Executive has 8 Members (plus the Leader) each with primary
responsibility for an individual portfolio. See Appendix 1 to my
evidence which sets out the membership of the Council Executive and
their responsibilities in more detail.
3.5
The Council’s senior officer and Head of Paid Service is the Chief
Executive.
3.6
The tier below the Chief Executive comprises 7 Strategic
Directors.
3.7
Underneath the Strategic Directors are 19 Heads of Service,
including the Head of Planning and the Head of Property & Legal
Services.
3.8
The Council’s Scheme of Delegations provides for the Head of
Property and Legal Services to have responsibility for “the
Council’s functions in respect of the management, acquisition and
disposal of land and buildings; the repair and maintenance of all
Council property; the provision of building construction, design
and maintenance services for capital and revenue schemes.”
This delegated authority includes the authority to finalise
property transactions involving land in which the Council has an
interest, including the property transaction proposed in connection
with the Scheme.
3.9
The Council's planning decision-making structure is explained in
the evidence of Mr Guy.
3.10 The
organisation of the Council reflects the clear and necessary
separation of its statutory planning functions from its role as a
property-owner.
3.11 The
Building Agreement & lease under final negotiation with CGNU
have been drafted on the basis that the property function is
independent from the Council’s statutory planning functions.
4
Extent of Council’s Property Ownership
4.1
The Council has a substantial commercial property portfolio,
comprising mostly retail shops in central Bath. The Council owns
the freehold of approximately two-thirds of the shops in the City
Centre, with about half of those being subject to direct lettings
from the Council (the other half generally being let to mesne
landlords). The Council holds these properties in the public
interest and makes decisions about their management or disposal in
accordance with the relevant provisions of the Local Government
Acts. The Council's commercial portfolio produces an annual gross
income of approximately £11.5m. The decline of a major retail
sector in Bath would therefore have a marked and direct effect on
the Council’s income. Accordingly, safeguarding the retail
centre of Bath is in the public interest and critical in order to
safeguard the Council’s income from its commercial estate.
4.2
The Council's portfolio includes the freehold interest in the
present Southgate Shopping Centre, the Ham Gardens car park and
some adjoining property within the Order Land (see the land edged
green on the plan comprising Appendix 2 to my evidence).
5
The Council’s Aspirations for the Southgate Area
5.1
The Council has been aware of the deficiencies of the existing
retail (and other) accommodation within the Southgate Centre and
adjoining land within the Scheme area for many years. Mr Guy's
evidence explains the evolution and development of the Scheme since
the 1980’s.
5.2
A special joint meeting of the Council’s Planning, Transportation
& Environment and Property Committees on 15th May 1996 carried
out an in-depth review of the need for the redevelopment of the
Order Land. The Southgate Issues Report (CD 10.2) - which revisited
and expanded upon the 1988 Bath City Council Objectives (CD 10.1) -
was considered and approved at the meeting. The strategic
aspirations outlined in the report have changed little in the
intervening 17 years and will be delivered by the Scheme.
5.3
The Council’s latest corporate Asset Management Plan (2002)
re-stated the objectives in the Best Value Performance Plan for the
period 2002/2003 as follows:
5.3.1 To improve
quality of life and the environment;
5.3.2 To build a
healthier and safer community;
5.3.3 To promote a
thriving economic community and combat poverty;
5.3.4 To encourage and
support life-long learning;
5.3.5 To deliver
quality and accessible services.
5.4
These objectives remain current and provide the framework for all
of the Council's policies and plans. The Scheme will make a major
contribution to most, if not all, of these objectives.
6
Objectives of Negotiations with CGNU
6.1
Throughout its negotiations with CGNU, the following objectives
have been pursued by the Council:
6.1.1 To agree terms
to bring forward the Scheme given planning permission in September
2003;
6.1.2 To safeguard
capital values and income streams from the Council’s property
portfolio;
6.1.3 To ensure that
the wider public interest is safeguarded, particularly with regard
to the ongoing functioning of the City during the building works.
Whilst this is not entirely a property-owner concern, it is clearly
in the public interest to ensure that during the construction phase
the impact of the Scheme on the City’s retail and tourism offer is
keep to a minimum; and
6.1.4 To involve key
departments of the Council as appropriate to ensure that the
delivery of the Scheme is as smooth as possible.
7
Evolution and Development of the Scheme
7.1
The existing Southgate Centre is let to CGNU under a lease on the
following principal terms:
7.1.1 Term: 99 years
from 24 June 1974 (thus c68 years unexpired);
7.1.2 Parties:
Ravenseft Properties and the Bath City Council (predecessors in
title to CGNU & Council respectively).
7.2
The lease of the Southgate Centre was transferred from Ravenseft to
Prudential Assurance Co Ltd and then to CGNU on 27 September
1995.
7.3
The Southgate Centre has clearly reached the end of its useful life
and the Council believes that there is a compelling need for the
redevelopment of the Southgate area in order to halt further
decline in the attraction of the City Centre as a retail
destination. The Southgate area of Bath is one of the "gateways" to
the City, and many visitors to the area arrive at either the
Railway Station or the Existing Bus Station. Southgate is therefore
the first (and last) part of the City such visitors see and often
it is this first impression which remains with visitors after they
have left.
7.4
The Council and CGNU have agreed to work together to deliver a
mixed-use redevelopment of the Order Land. The Scheme has been
devised by CGNU, with significant input from the Council, as the
best means by which to meet the Council's adopted and emerging
planning and regeneration objectives for the City Centre and
Southgate in particular. The physical aspects of the Scheme and the
various iterations of the proposals leading to the grant of the
Main Scheme Planning Permission are described in the evidence of Mr
Carran and Mr Brownlie.
7.5
The Council is satisfied that the Scheme is crucial and in the
public interest, not only in terms of delivering a retail-led
revitalisation of the City Centre, but also in terms of preventing
the decline of Bath as a regional shopping and tourist destination.
The Council actively and enthusiastically supports the Scheme and
wishes it to be brought forward in accordance with retail planning
policies for the City Centre which aim to facilitate the
regeneration of the Southgate area.
7.6
As a result of that support, the Main Scheme Planning Permission
was granted on 25 September 2003. Mr Guy's evidence describes in
more detail the decisions leading to the grant of the Planning
Consents.
7.7
In the run-up to the grant of the Main Scheme Planning Permission
in September 2003, the project was led for the Council by the then
Strategic Director with responsibility for Planning & Economic
Development. Following that date, authority for the property
transaction was delegated to the Head of Property & Legal
Services.
7.8
The Order Land is required in order to secure the carrying out of
the Scheme. The Council and CGNU between them own the freehold of
much of the Order Land. Many (but not all) of the properties are
occupied on a basis which allows the freeholder to regain
possession upon service of notice on the occupier. Negotiations are
being, and will continue to be, progressed as far as possible with
all parties to reach voluntary agreements resulting in possession
at the appropriate time.
7.9
However, due to the size and complexity of the Order Land it is
highly unlikely that the Council and CGNU would be able to acquire
all the interests by agreement within a predictable timescale. The
Council has therefore had to consider other ways of achieving the
required site assembly.
7.10 Local
authorities have the power to acquire compulsorily any land within
their area which is suitable for and required in order to secure
the carrying out of development, redevelopment, or improvement
(section 226(1)(a) TCPA 1990).
7.11 A
compulsory purchase order achieves two major advantages:
7.11.1 Certainty of availability of all land
and property rights necessary for the Scheme to proceed in a timely
and efficient manner; and
7.11.2 Ensuring that clear legal title
(freehold and leasehold) to all of the land required for the Scheme
vests in the Council.
7.12 It
also gives all affected parties the right to object and be heard at
a public inquiry, together with rights of compensation.
7.13 On 5
March 2003, the Council Executive considered the principle of the
Council using its compulsory purchase powers to acquire legal title
to the Order Land in order to secure the implementation of the
Scheme. The Council Executive confirmed its "in principle" support
for the making of a compulsory purchase order if recommended to do
so.
7.14 On 30
June 2004, the Council Executive resolved to make the Order and
authorised the Head of Property and Legal Services to take all
necessary steps to secure the making, confirmation and
implementation of the Order, including negotiating with third party
land owners and making arrangements for any consequential highways
orders (CD 3.1).
7.15 In
resolving to make the Order, the Council made a balanced judgement
as to the reasonable certainty of the delivery of the Scheme,
taking into account such matters as:
7.15.1 The completion of the Planning
Agreement;
7.15.2 The grant of the Planning Consents;
7.15.3 The progress of negotiations for the
Building Agreement; and
7.15.4 The requirement for an Indemnity
Agreement to be in place pursuant to which CGNU would undertake to
meet the costs of the Council in making and implementing the
Order.
7.16 On 12
October 2004, the Head of Property and Legal Services confirmed
that he was satisfied that the draft Indemnity Agreement
incorporated appropriate indemnities in respect of the Council's
costs and compensation liabilities, and that the final form of the
Order and Statement of Reasons had been agreed. Accordingly, he
authorised the completion of the Indemnity Agreement and the making
of the Order (CD 3.2).
7.17 On 20
October 2004, the Council made the Order and submitted the same to
the Secretary of State for confirmation on 29 October 2004.
7.18 In
relation to the provisions of the Human Rights Act 1998, I make the
following comments:
7.18.1 In reaching its decision to make the
Order, the Council had regard to the provisions of the European
Convention on Human Rights, and in particular to the provisions of
Article 1 of the First Protocol and Article 8 of the
Convention;
7.18.2 The Council's consideration of these
matters is set out in paragraph 14 of the report to the Council
Executive dated 30 June 2004 submitted as CD 3.1;
7.18.3 The Council is satisfied that there is
a compelling case in the public interest for the Order and that the
substantial benefits that the Scheme will bring (including the
economic, social, physical and environmental benefits outlined in
the evidence of the Council's other witnesses) justify any
interference with the human rights of those with an interest in the
Order Land.
7.19 In
parallel with the preparations for making the Order, and in the
light of the Council’s support for Scheme, I was instructed to
agree terms with CGNU to secure the redevelopment. Negotiations
have taken place between the Council and CGNU for the grant of a
new lease of the site to CGNU subject to CGNU entering into a
detailed Building Agreement. The provisions of the existing lease
between CGNU and the Council will be suspended following the
completion of the Building Agreement and a new lease will be
granted upon practical completion of the Scheme. The new lease and
Building Agreement have been negotiated so as to reflect the
objectives set out in Section 6 above. The Building Agreement will
be entered into very shortly.
8
The Order Schedule and Maps
8.1
The Order has been prepared by the Council's solicitors in
accordance with the advice contained in Circular 02/2003. It is
therefore not necessary for me to describe the Order Schedule and
Maps in detail. However, I will describe two key features of the
Order Schedule and Maps in more detail below.
Land Coloured Orange
8.2
In accordance with the advice contained in paragraph 2 of Appendix
T to Circular 02/2003, land to be permanently acquired is shown
pink and land over which a new right would subsist is shown blue on
the Order Maps. However, in addition, the majority of the ground
floor level and some plots at platform level of the Railway Station
are shown coloured orange on Order Maps 2 and 6. The use of a
third colour was considered necessary because the Railway Station
Improvement Works require certain parts of the Order Land to be
subject to a combination of the permanent acquisition of some
existing legal interests in the land and the acquisition of new
rights in respect of other legal interests in the land. Further
detail about the orange land is set out in paragraph 8.7 below.
8.3
The Planning Agreement requires CGNU to carry out and complete the
Railway Station Improvement Works. With the exception of the land
described in paragraph 8.4 below, the Council is not seeking to
permanently acquire the interests of Network Rail or First Great
Western. An agreement with Network Rail is currently being
negotiated pursuant to which CGNU will obtain the right to carry
out the Railway Station Improvement Works. Notwithstanding these
negotiations, the interests of Network Rail and First Great Western
have been included in the Order to ensure that all of the elements
of the Scheme can be delivered. If for any reason it does not prove
possible for an agreement to be entered into with Network Rail, it
would be the Council's intention to exercise the rights which would
be conferred by a confirmed Order.
8.4
The land comprised within plots 119-125, 127 and 128 of the Order
is required for the widening of Dorchester Street and the creation
of a new public square which will form part of the Transport
Interchange. This land is shown pink on Order Map 2 and the Order
provides for all interests in these plots (including the interests
of Network Rail and First Great Western) to be permanently
acquired. The permanent acquisition of this land will ensure that
the Council can procure the adoption of these areas as public
highway (in the case of the land required for the widening of
Dorchester Street) and public walkway (in the case of the land
required for the creation of the new public square).
8.5
The remainder of Network Rail and First Great Western’s interests
in the Railway Station will be subject to the acquisition of new
rights and are shown either as blue or orange plots on Order Maps 2
and 6.
8.6
Certain parts of the platform level of the Railway Station are not
subject to any third party occupational interests (i.e. the only
interests in the land belong to Network Rail or First Great
Western). These plots are therefore “rights only” plots and are
shown blue on Order Map 6.
8.7
However, certain other parts of the Railway Station are occupied by
third parties and it will be necessary to secure vacant possession
of these parts to enable the Railway Station Improvement Works to
be carried out. While it is envisaged that Network Rail and First
Great Western will be able to secure vacant possession of many of
these areas by exercising their rights as landlord under the
various occupational leases, the Order provides for the permanent
acquisition of all non-Network Rail and non-First Great Western
interests at the ground floor and platform levels of the Railway
Station, together with new rights as against Network Rail and First
Great Western, to ensure that all of the elements of the Scheme can
be delivered. Plots that are subject to this combination of
permanent acquisition and the acquisition of new rights are shown
orange on Order Maps 2 and 6.
Plot 151 - Avon House
8.8
It will be evident from Order Map 2 and Figure 1 appended to Mr
Carran's evidence that plot 151 falls outside the boundary of the
Planning Consents. Plot 151 comprises a derelict building known as
Avon House. This plot has been included in the Order on the basis
that the Planning Agreement obliges CGNU to obtain the Council's
approval to, and secure the implementation of, a scheme of
restoration of Avon House prior to the completion of the Railway
Station Improvement Works.
9
Deliverability
9.1
It is anticipated that the Building Agreement will be completed by
the end of April 2005. The Building Agreement will be subject to a
number of conditions precedent, including (inter alia):
9.1.1 Confirmation of
the Order; and
9.1.2 Attainment by
CGNU of a target rate of return on costs.
9.2
Mr Paterson explains the position in relation to the Building
Agreement in his evidence.
9.3
CGNU have already committed significant financial input in bringing
the Scheme forward and are contractually committed, via the
Indemnity Agreement, to underwrite the Council’s external
consultancy costs, the costs of this Inquiry and all amounts
properly payable to third parties by way of compensation, including
any compensation payable in consequence of a blight notice.
9.4
CGNU has sufficient resources to complete the Scheme without the
need for external financing and the necessary development expertise
will be available through a developer partner.
9.5
It has always been the understanding between the parties that CGNU
(being an investment life company, not a property developer) would
bring their own developer partner at the appropriate stage to
assist with the delivery of the Scheme. CGNU, for reasons explained
by Mr Paterson, has decided not to enter into an agreement with a
delivery partner until after the Building Agreement has been
signed. The Council accepts that this is an appropriate way to
proceed.
9.6
In the light of these points, and having spent many months
negotiating the commercial terms of the lease and Building
Agreement, I have complete confidence in CGNU’s ability to deliver
the Scheme.
