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DECISION REPORT: Hertsmere Developments Ltd Business Plan & Associated Matters

The ATTACHED report sets various matters for approval, related to the establishment of Hertsmere Development Limited, such as its Articles of Association and Shareholders Agreement, delegation of authority to grant leases and provide loan funding and arrangements for progress reports on the work of the company.

Minutes:

The meeting considered report C/18/21 on Hertsmere Development Ltd.

 

With the meeting’s consent, it was moved by Councillor Morris and seconded by Councillor Bright that the recommendations set out in the report be agreed, with the alteration of an additional Recommendation:

 

1.7      A cross-Party panel be established to look at the governance of Hertsmere Development Ltd and associated matters. The panel to report back to the Executive before the end of 2018, with the expectation that a report be taken to the first Council of 2019. The composition of the panel and the Chair to be decided by the Leader of the Council.”

 

Following a debate and vote, the report recommendations were AGREED.

 

RESOLVED that

 

(i)            The Hertsmere Development Limited’s (HDL) Articles of Association and Shareholders Agreement attached to the report as Appendices B and C respectively be approved. Furthermore authority be delegated to the Corporate Director, in consultation with the Leader of the Council, to make any minor changes to the Governance Agreement prior to its approval by the Full Council.

(ii)          subject to approval of the Business Plan in Part II of this meeting and an independent site valuation, authority be delegated to the Leader of the Council and the Corporate Director, as shareholder representative, to transfer the sites listed in Appendix A of the Business Plan to HDL and furthermore it be agreed and approved that the site/land transfers are to be held as an equity holding in HDL.

(iii)         the Leader of the Council and the Corporate Director be authorised to transfer to HDL the freehold of the sites intended for the building of houses for sale and to grant HDL a long lease of a 99 minimum 125 years of the sites intended for the building of flatted developments for sale.

(iv)         the Leader of the Council and the Corporate Director be authorised to grant HDL long operational leases of 30 years in respect of sites to be developed for commercial/non-residential ‘build to rent’ and to grant HDL leases of 20 years in respect of sites to be developed for residential ‘build to rent’.

(v)          authority be delegated to the Executive to provide loan funding to HDL not exceeding £50M over the period of its Business Plan, that is until 2028, and a drawdown facility of no more than £10M in any financial year subject to adherence to the criteria specified in Paragraphs 3.4.5 and 9 of the officers report. In addition, all loan funding will be secured as a first charge on the property assets to which the funding relates.

(vi)         an annual update be provided to the Full Council on HDL’s operational progress and its utilisation of the sites and funding allocated to it pursuant to the delegated powers referred to in paragraphs (ii) to (v) above. The first update be provided at the Full Council meeting in July 2019, with a quarterly progress report presented to the Executive.

(vii)        a cross-Party panel be established to look at the governance of Hertsmere Development Ltd and associated matters. The panel to report back to the Executive before the end of 2018, with the expectation that a report be taken to the first Council of 2019. The composition of the panel and the Chair to be decided by the Leader of the Council.

Supporting documents: