Rushcliffe Borough Council expects a windfall of approximately £15 million over 4-5 years after prudent land deals were agreed in 2005.
After an agreement made with Rushcliffe Borough Council in 2005 , part of J A Wells Ltd’s land ownership (land on Melton Road which is now subject to development) was subject to an overage agreement in the Council’s favour, this stated that the Council would receive 40% of the amount by which the “open market value of the property” exceeds the purchase price (or a relevant proportion of the purchase price where the land is sold in part).
We asked the council how the money would be used…
Kath Marriott, Executive Manager for Operations and Transformation told us: ‘The money raised through this deal will go into the Council’s capital receipt fund which is then used to finance capital projects around the Borough. The money won’t be allocated or ringfenced to any particular scheme as it is currently unclear when the money will be received and where it is spent will depend on the priority at that time.’
Adding, ‘The Council has an ambitious capital programme as detailed in the medium term financial strategy which in recent years has included building the new Arena, the Bridgford Hall refurbishment and building new employment units in Cotgrave’.
Nottingham property consultants Bruton Knowles were appointed to protect the Council’s interests, and to conduct the required negotiations to achieve an agreement with the land owner of how the 40% would be calculated.
Lengthy and complex negotiations were carried out between the parties, including the sales process of any land, procuring planning permission, provision of infrastructure and any future land sales.
As a result of the negotiations and the activity of the Landowner in initiating the first sales process, it has been possible to finally estimate the likely benefit and timings of payments which could be made to the Council.
The payments could extend over 4 – 5 years.
At current estimates it is possible that the Council could receive in the order of £15 million in total by way of overage entitlement.
The land deal forms part of the Full Cabinet meeting of the Council on October 10th.