Report of the Strategic Director (Development) and City Treasurer 

This report sets out plans for the Manchester College to bring forward a central element of their 2017 – 2022 Estate Strategy for a new city centre campus and sets out proposals for the City Council to support the Manchester College in its acquisition of this site.

The Committee considered a report of the Strategic Director (Development) and City Treasurer, which set out plans for the Manchester College to bring forward a central element of their 2017/22 Estate Strategy located within the Northern Gateway Great Ducie Street Regeneration area, and set out proposals for the City Council to support the Manchester College in its acquisition of this site.

The Committee had been invited to comment on the report prior to its submission to the Executive on 12 December 2018.

Officers referred to the main points and themes within the report and responded to questions from the Committee.

Decision

The Committee

(1)          Endorses the recommendations contained within the report that the Executive:-

·           Note the proposed contractual and commercial arrangements between the City Council and the College details of which are set out in the body of this report.

·           Note that the Manchester College will promote a new Development Framework for the site which they are acquiring, taking into account the consented scheme on part of the site and the final version of the Great Ducie Street Strategic Regeneration Framework which is currently under consultation;

·           Note that LTE Group have put in the submission for Greater Manchester Combined Authority (GMCA) skills capital funding of up to £25m, which has been approved in principle dependant on a final due diligence exercise.

·           Approve the proposed loan of £27.6m to LTE Group the details of which are set out in this report;

·           Authorise the City Solicitor, City Treasurer and Strategic Director – Development, in consultation with the Executive Member for Finance and Human Resources, to conclude the detailed contractual and commercial negotiations in respect of the proposed loan and necessary security arrangements and such other commercial transactions as set out in this report; and

·           Authorise the City Solicitor to enter into and complete all documents or agreements necessary to give effect to the proposed loan and associated security arrangements the details of which are as set out in this report.

(2)          Requests that the Executive take into consideration the following concerns of the Committee in relation to the proposed loan to the LTE Group when making its decision:-

·                The Committee has strong concerns as to the security arrangements for the Council’s loan and the ability of the LTE Group to repay this and that these concerns should be addressed in the ongoing due diligence work;

·                The Committee asks for clarifications on what other sources of finance  LTE Group had approached to secure the funding required for the purchase of the site; and

·                The Committee notes that the Council is undertaking  ongoing due diligence to ensure the Council’s position is protected and is compliant with all relevant statutory and legal duties and functions.

(3)          Notes that Council is recommended to approve a capital budget increase of £27.6m funded by borrowing.

[Councillor Hacking declared a Disclosable Pecuniary Interest in this item due to being a Director of the LTE Group and a Governor of Manchester College.  He left the meeting during consideration of this item.]

[Councillor Raikes declared a Disclosable Pecuniary Interest in this item due to his employer being a corporate sponsor for the LTE Group.  He left the meeting during consideration of this item.]