The report of the Strategic Director (Development) and the City Treasurer is enclosed.

(Councillor S Murphy had declared a disclosable pecuniary interest in this item and had withdrawn from the meeting before this item was considered.)

A report by the Strategic Director (Development) and the City Treasurer set out the details of the financial and commercial considerations for the Council’s support for the LTE Group’s proposals to develop a City Centre Campus. The College was seeking a loan of £27.6m from the Council and the report described in detail the security that the Council would hold for that loan, should it be agreed. It was also noted that as well as a loan from the Council the College required further funding in order to deliver the development. It was likely that would come from an institutional lender or lenders. If further investors were identified the Council would need to enter into negotiations with those Lenders in respect of terms of their lending and security required.

The report explained that the College had committed to working with the City Council to bring forward a revised Development Framework for the remainder of the Boddingtons Brewery site. That revision would take into account not only the proposals that were currently the subject of a planning application, but also the draft Strategic Regeneration Framework (SRF) that was currently under consultation for the Great Ducie Street area which was immediately adjacent to this site. That would ensure that the campus development proposals were both consistent and complementary to those set out in both Frameworks.

It was noted that a recent meeting the Economy Scrutiny Committee had also considered this report. The Committee had endorsed its recommendations and requested that the Executive take into consideration the Committee’s concerns about the security arrangements for the Council’s loan and clarification on the other sources of funding that had been sought by the LTE Group (Minute ESC/18/61). The concerns of the Committee were accepted and it was explained that the securities for the Council’s loans had been improved.

Decisions

1.         To note the proposed contractual and commercial arrangements between the City Council and the College details of which were set out in the report.

2.         To note that the Manchester College would promote a new Development Framework for the site which they intend to 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 was currently under consultation.

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

4.         To approve the proposed loan of £27.6m to LTE Group, the details of which were set out in this report, subject to the release of the funds by the Council.

5.         To authorise the City Solicitor, City Treasurer and Strategic Director (Development), in consultation with the Executive Member for Finance amd 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.

6.         To 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.

7.         To recommend that the Council approve a capital budget increase of £27.6m (£17.6m in 2018/19 and £10m in 2019/20) funded by borrowing.