Greve de Lecq Cafe No.1 - Ground Site 25 year lease

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A decision made (14.01.2009) to approve a 25 year ground lease for Greve de Lecq Café No.1 to Café de Lecq Ltd.

Decision Reference: MD-PH-2009-0002
Decision Summary Title:	DS – Ground Site - Greve de Lecq Café N°1 – Proposed 25 Year Lease	Date of Decision Summary:	07 January 2009
Decision Summary Author:	Philip Ahier	Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written	Person Giving Oral Report:	N/A
Written Report Title:	WR - Ground Site -Greve de Lecq Café N°1, La Greve de Lecq, St Ouen – Proposed 25 Year Lease PBA 0689	Date of Written Report:	07 January 2009
Written Report Author:	Philip Ahier	Written Report : Public or Exempt?	Public
Subject: Ground Site - Greve de Lecq Café N°1 – Proposed 25 Year Lease PBA 0689
Decision(s): 1. The Minister approved, as recommended by Property Holdings, a 25 year ground lease of Greve de Lecq Café N°1 to the current lessee Café de Lecq Ltd, to commence on the expiry of the current nine-year ground lease on 25 December 2012, at a commencing rental of £11,000 per annum, with three yearly JRPI rent reviews and an open market rent review on the 15th anniversary of the lease.
Reason(s) for Decision: 1. Under Standing Order 168 (1) (a) and 168 (3) the Minister hereby notified the States that he had accepted the recommendation of Property Holdings to agree to the above land transaction. 2. Under Standing Order 168 (5) the Minister hereby authorised the Attorney General and the Greffier to pass any contract which is required to be passed on behalf of the Public.

Resource Implications:

There are no further financial or manpower Implications to the States as a result of this decision.

Action required:

1. In accordance with Standing Order 168 (3) this decision must be presented to the States at least 15 working days before the contract is passed. After the expiry of 15 working days following presentation to the States the transaction may be concluded.

2. The Director of Property Holdings is to instruct the Attorney General and the Greffier to pass the necessary contract, and to copy this decision to the Minister, Treasurer and Deputy Treasurer.

Signature:

Position: Deputy J A N Le Fondré

Assistant Minister*

MD-PH-2009-0002

Date Signed:

14/01/09

Date of Decision:

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Greve de Lecq Cafe No.1 - Ground Site 25 year lease

TREASURY AND RESOURCES DEPARTMENT

PROPERTY HOLDINGS

Property Transaction for Ministerial Decision –

Treasury and Resources Minister

Ground Site - Greve de Lecq Café N°1, La Greve de Lecq, St Ouen

Proposed 25 Year Lease

PBA 0689

Background

The Public owns the ground site known as Greve de Lecq Café N°1 and has a nine year lease in place with Café de Lecq Ltd, which is due to expire on 24 December 2012. The current rental is £8,090.28 per annum.

In spring 2007 the café was destroyed by fire. The café building belonged to the lessee, apart from a former defence bunker on the site which belongs to the lessor and which forms part of the ground lease.

The lessee has subsequently commissioned a design for a replacement café and has obtained planning permission and bye-law approval. The lessee intends to commence building the new café this year.

In view of the substantial outlay in building a new café, the lessee has requested a longer ground lease to give security of tenure. Property Holdings is therefore minded to recommend a 25 year ground lease to commence at the expiry of the current nine-year lease.

Heads of terms

The heads of terms of the ground lease are as follows:

Lessor: - Public of the Island

Lessee: - Café de Lecq Limited

Lease term: - The lease term shall be a period of 25 years to commence on 25 December 2012 and to terminate on 24 December 2037 (the present nine year lease of the demised premises being due to terminate on 24 December 2012).

Rental: - The commencing rental shall be £11,000 per annum (exclusive of GST)

Rent reviews: - The rental shall be reviewed in line with the “Jersey Retail Price Index” every three years from the commencement date (25 December 2012), with the rental being rebased to the Open Market Value of the demised premises (the ground site) in the 15th year of the lease.

Demised premises: - The ground site known as Greve de Lecq Café, N°1, measuring approximately 5,000 sq ft (as shown on the attached plan for identification purposes only), which includes a former defence bunker built thereon. The proposed site boundary is shown on the plan and it is agreed that the Lessor will grant the Lessee access rights beyond the boundary line for maintenance purposes.

Use: - The demised premises are to be used only for the construction and operation of a food/drink outlet and associated facilities as agreed from time to time with the Lessor – the construction of the food/drink outlet to be in accordance with the Planning Permit dated 01 February 2008 numbered P/2007/2873, and to be at the Lessee’s sole cost.

Lease end: At the expiration of the lease term, the Lessee may remove the food/drink outlet from the demised premises (making good any damage caused to the former defence bunker), but is not obliged to do so.

Alienation: - Sub-letting of the demised premises shall not be permitted. Assignment of the lease may take place with the prior written consent of the Lessor which shall not be unreasonably withheld or delayed. The Assignee must be of similar or equivalent covenant strength as the existing Lessee and guarantor.

Insurance: - The Lessee is to take-out and maintain in force a buildings insurance policy to include full reinstatement of the demised premises and two years’ loss of rent. The Lessee shall also maintain and enforce a public liability policy of not less than £3,000,000 in respect of any one occurrence or such other sums the Lessor may require from time to time.

Guarantor: - The Lessee shall provide a lease guarantor, to be approved by the Lessor, who shall guarantee payment of all sums due and all liabilities under the lease should the Lessee breach any of the covenants.

Fees: - The Lessee shall pay all reasonable legal costs and Property Holdings’ fees (£500 – exclusive of GST) incurred in relation to the drafting and the passing of the lease agreement.

Services: - The Lessee shall be responsible for bringing all necessary mains services to the demises premises and for making good any associated damage to roadways etc in the Lessor’s ownership. The Lessor shall be responsible for the payment of all services costs during the term of the lease.

Other costs: - The Lessee shall be responsible for all costs associated with the use and occupation of the completed development including foncier and occupier’s Parish rates.

Former defence bunker: - The Lessee shall not alter the former defence bunker without the Lessor’s consent. The Lessor reserves the right, but is not obliged, to decorate the exterior of the bunker in colour white to serve as a navigational aid.

Recommendation

It is recommended that a 25 year ground lease of Greve de Lecq Café N°1 is formalised with the current lessee Café de Lecq Ltd, to commence on the expiry of the current nine-year ground lease on 25 December 2012, at a commencing rental of £11,000 per annum, with three yearly JRPI rent reviews and an open market rent review on the 15th anniversary of the lease.

Written By: Philip Ahier

Principal Property Manager

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Authorised By: David Flowers 07 January 2009

Director Property Holdings

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