Agenda item

This report seeks approval secure approval and/or provide information in relation to modification of the restrictive covenants relating to the Barham Park Estate, the allocation of funding for repair works as well as updating on various operational and strategic property matters.

Denish Patel (Head of Property) introduced a report from the Director Property & Assets providing an update on various operational & strategic property matters relating to the Barham Park Estate as well as modification of the Restrictive Covenants on 776 and 778 Harrow Road.

In presenting the report the Trust Committee were advised:

·            Of the background to the proposed modification of the restrictive covenants on 776 and 778 Harrow Road, which it was noted had been subject to an independent valuation (as detailed within Appendix 1 (classified as exempt) of the report) in accordance with Charity Commission guidelines.  As a result of the proposed modification to the restrictive covenants a sum of £200,000 had been negotiated with the current owner of the site (Zenaster) to reflect the assessed market value of the modification, which the Committee were advised (subject to any required Charity Commission approval) would be allocated to the Trust’s restricted funds in line with Charity Commission guidance on disposals.  This was recognised as providing a significant one-off financial benefit for the Trust with the funds used to support the delivery of longer-term benefits and ongoing maintenance of the Barham Park Estate without impacting on the net use of the park space.

·            Other operational matters outlined included a proposed increase in the allocation of funding for Year 1 repair works to account for additional VAT costs as well as an update on progress regarding lease renewals and negotiations.  This included the proposed lease re-gear (mid lease amendment) to remove Unit 6 from ACAVA’s demise at it was surplus to their requirements enabling the Trust to market and re-let the unit on the best terms possible, aligning with its charitable objectives.

The Trust Committee was also advised of the progress with negotiations relating to Units 1 & 2 and Unit 7 as well as proposals being developed with the Council to enable the surrender of the lease on Unit 8 by the end of March 2025 allowing the Trust to re-market the unit.

·            In terms of the Trust’s financial position, members were advised that current cash reserves totalled £638,206, although it was noted the financial position remained challenging given the ongoing cost of maintenance work identified as required to the Estate.  Work therefore continued with occupying tenants to clear the outstanding rent arrears (totalling £34,000) with it anticipated that most would be cleared by the end of March 2025 and rent reviews also having been completed, resulting in an annual income uplift of £15,671.

·            In terms of Parks & Estate Management the Trust Committee noted the ongoing work being undertaken to address drainage issues in the events field as well as the outcome of a recent Barham Park Tree Survey, which had identified essential tree maintenance work as required in high traffic areas of the park.  Given the need to ensure timely completion of the required safety and maintenance works, members were advised of the use of unrestricted funds to cover the cost identified (£18,055) given current pressures on the restricted fund pending the receipt of the income to be generated as a result of the potential modification of the restrictive covenants relating to 776 and 778 Harrow Road.

·            Of the progress in developing the formal and informal consultation agreed to inform the future strategic estate redevelopment proposals and business case for expanding the estates permissible use, prior to submission to the Charity Commission.

The Chair thanked officers for the update provided and then invited comments in response to the report, with the following issues raised:

·            Clarification was sought on the background to establishment of the Restrictive Covenants, which the Trust Committee was advised had first been introduced in August 2011 as a means of preserving the best interest of the Park, area's character and limiting development on the site at 776 & 778 Harrow Road.  It was confirmed that no Restrictive Covenant had been in place prior to 2011 with the proposed modification felt to satisfy Charity Commission guidance on land disposal on the basis that the Trust (as legal beneficiary of the covenants) had the right to negotiate their modification or discharge; the proposal would not reduce the Trust landholdings (as the properties had already been sold) and would also been in the Trust’s best interests in terms of generating funds to support its charitable objectives.

·            Assurance was sought that the ongoing work being undertaken to develop the future estate strategic redevelopment proposals and business case for expanding the estates permissible use as well as proposed modification of the Restrictive Covenants in support of the ongoing maintenance of the estate and Trust’s charitable objectives would be subject to the necessary approval being sought from the Charity Commission.  In response, confirmation was provided that the necessary approval would be sought from Charity Commission, as required.

As no further issues were raised the Chair made the Trust aware of a written representation which had been received in prior to the start of the meeting from a local resident regarding the proposed modification of the Restrictive Covenant and operational property issues outlined in the report, which it was confirmed had been noted.

In thanking officers for their ongoing work and acknowledging the efforts being made to safeguard the future and financial sustainability of the Barham Park Estate in a way that would enable continued community and public benefit in line with the Trust’s charitable objectives, the Trust Committee RESOLVED (having noted the exempt information contained within the appendices to the report) to:

(1)        Approve the modification of the restrictive covenants at 776 and 778 Harrow Road, as detailed in paragraphs 3.8-3.11 of the report and delegate authority to the Director of Property and Assets to execute a deed with Zenaster Properties Ltd for the agreed sum of £200,000, subject to (2) below.

(2)    Approve seeking Charity Commission consideration of the Qualified Surveyor’s Report (included as an exempt appendix to the report) and authorisation under Section 105 of the Charities Act to modify or discharge the covenants.

(3)       Approve an increase in the allocated funding for Year 1 works from £268,950 plus professional fees to £352,221 to account for VAT and seek Charity Commission approval to utilise restricted funds.

(4)        Authorise the Director of Property and Assets to negotiate and finalise the lease re-gear for Unit 6 with ACAVA.