Agenda item

Report of the Managing Director.

The Cabinet Member with the Resources Portfolio introduced the report of the Managing Director (previously circulated) requesting that consideration be given to the establishment of a Joint Venture Company, to provide the infrastructure build and sale of homes under an investment programme within the North East under the company name Esh DBC JV Limited; the Council investing in the company; and acquiring land for schemes meeting qualifying investment criteria for residential development, through the Council’s Joint Venture arrangements.

The submitted report stated that to date four Joint Venture schemes had been arranged under separate joint venture companies which brought forward a number of developments and that the schemes were projected to provide 388 new homes; estimated new homes bonus of £2.1m; a post-tax profit of over £3m; and on loan interest payments of £1.1m from a maximum engaged investment of £24.3m. 

RESOLVED - (a)  That the establishment of the Joint Venture Company to acquire land, as detailed in the submitted report, be approved.

(b)  That £9.5m from the Investment Fund, to fund the Joint Venture Company financed by prudential borrowing subject to a first Legal Charge in favour of the Council over the Land acquired by the Joint Venture Company together with a Guarantee from the Joint Venture Partner in respect of 50 per cent of the Senior Loan sum, be approved.

(c)  That the Joint Venture Agreement, be approved, and delegated authority be given to the Assistant Director – Resources (Chief Finance Officer) to finalise the establishment of the Joint Venture Company in line with the terms as detailed in the submitted report.

(d)  That the Assistant Director – Resources (CFO), the Assistant Director Housing and Building Services and the Assistant Director - Law and Governance be appointed to act as directors in the Joint Venture Company as part of its Executive Board and approval be delegated to agree the acquisitions of land and development of sites on behalf of the Council as Shareholder.

(e)  That the Joint Venture be funded from prudential borrowing from the Capital Investment Fund established by the report to Council dated November 2016.

REASONS - (a)  To assist in the delivery of the Economic Strategy by speeding up the building of new homes.

(b)  To deliver income for the Council.