The Leader introduced the report of the Chief Executive (previously circulated) requesting that consideration be given to the repayment of £1,710,928.78 of European Regional Development Fund (ERDF) to facilitate the temporary use of Feethams House by the Treasury (HMT) and Other Government Departments (OGD).
The submitted report stated that in 2019 the Council commenced the building of Grade A office accommodation in the centre of the town; it was a speculative build project aiming to provide high quality office accommodation for small and medium enterprises (SME’s) and general business use; the overall project costs of £8,460,880 were funded through Council capital contribution of £3,329,848, Tees Valley Combined Authority of £3,230,000 and ERDF contribution of £1,901,032; the ERDF contribution was specifically allocated for the provision of office accommodation for SME’s; and that the building was completed in 2020 and funding received to date from ERDF was £1,710.928.78.
It was reported that in March 2021 it was announced that the departments of HMT and OGD were to be relocated to Darlington; temporary accommodation for the early cohorts of officers relocating was required; Feethams House had been identified as the preferred temporary location with occupation commencing in March 2022; as the whole building would be required, the two floors identified for use by SME’s would not meet the restriction imposed by ERDF funding and would need to be repaid; and that it had been confirmed that the Government were able to offer repayment over a three-year term (March 2022 to March 2024) in line with the ERDF Programme.
A Member enquired whether there would be a need to build further office accommodation for SME’s, as a result of the HMT and OGD’s relocating to Feethams House. The Chief Executive responded thereon.
RESOLVED - (a) That the European Regional Development Fund contribution of £1,710,928.78, for the construction of Feethams House, be repaid.
(b) That the funding be sourced in the medium term from the Investment Fund to be repaid through the rental income from Feethams House.
REASONS – (a) To promote new development and Economic Growth.
(b) To facilitate the relocation of officers from HMT and OGD’s which would provide several significant economic growth opportunities for the borough and the Tees Valley Region.
(c) To comply with the grant funding obligations.