Government of Jersey

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A decision made (01.08.07) to approve a contract with Jersey Electricity Company Ltd. to lease land to the south of Aviation Beauport, Avenue de la Commune, st. Peter.

Subject:	Proposed Letting: Land to the South of Aviation Beauport, St Peter. The Public and The Jersey Electricity Company Limited
Decision Reference:	MD-PH-2007-0063	Exempt clause(s):		None
Type of Report: (oral or written)	Written	Person Giving Report (if oral):		N/A
Telephone or e-mail Meeting?	N/A	Report File ref:		1698/1-3+9
Written Report – Title	Proposed Letting: Land to the South of Aviation Beauport, St Peter. The Public and The Jersey Electricity Company Limited	Written report - author		Neil Sproston
Decision(s): 1. The Minister approved, as recommended by Property Holdings, a contract lease between the Public of the Island and The Jersey Electricity Company Limited in respect of land situated to the South of Aviation Beauport, L’Avenue de la Commune, St Peter, subject to the terms set out in the attached report. 2. 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. 3. 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. After the expiry of 15 working days following presentation to the States the transaction may be concluded.
Reason(s) for decision: Under Standing Order 168 (1) (a) and 168 (3) the Minister is required to notify the States of his acceptance of recommendations to dispose, acquire, let or rent land on behalf of the Public of Jersey.
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 Assistant Treasurer.
Signature: (Assistant Minister)[1] Deputy J A N Le Fondré			Date of Decision: MD-PH-2007-0063

Jersey Electricity Company Ltd. - lease of land to south of Aviation Beauport

TREASURY AND RESOURCES DEPARTMENT

PROPERTY HOLDINGS

Property Transaction for Ministerial Decision - Minister for Treasury and Resources

Proposed Letting: Land to the South of Aviation Beauport , St Peter

The Public and The Jersey Electricity Company Limited.

NS 1698/1-3+9

Purpose

To request the Minister for Treasury and Resources to approve a lease from the Public to The Jersey Electricity Company Limited (the “JEC”) in respect of land for the purposes of accommodating a new Western Primary Sub-Station for the West of the Island.

Background

The JEC has indicated that its existing sub-station facility, located on Public land , at the Airport Garage site, L’Avenue de la Commune, does not have sufficient capacity to continue to provide an adequate electrical supply to support the needs of the West of the Island. The land concerned is held under a 21 year contract lease by the JEC from the Public that is due to expire on 19/05/2015.

Over the past 12 months, the JEC has conducted a feasibility exercise to identify a suitable site which could accommodate a larger facility of circa 8,000 sq.ft on 1 ½ floors upon a site of approximately 16,275 sq.ft., having regard to the existing infra-structure cabling beneath L’Avenue de la Commune. As many as 12 sites were investigated, including 3 in the ownership of the Public; the above site (as shown on the attached plan), Field 298 St Peter, as well as the possible expansion of the existing sub-station on adjacent land.

Pre-application advice from Planning and Building Services indicated the area between Aviation Beauport and the adjacent road, L’Avenue de la Conmmune, being effectively an area of open landscaping with some mature planting, to be the most appropriate for this facility in the context of JEC’s requirements. Following agreement of terms with the Public, a scheme has been prepared and planning permission has since been issued on 20 June 2007 (P/2007/1091).

Lease Proposal

In conjunction with Jersey Airport, terms and conditions have been agreed with the JEC concerning an 85 years lease to commence from the date of passing contract to enable the sub-station facility to be constructed.

Since the circumstances behind this transaction are not regarded as an open market letting, the recommended terms are intended to reflect the possible commercial opportunity foregone by the Public in agreeing to release this area of land for this purpose. An initial rent of £34,000 per annum has been agreed, inclusive of any charges for the laying of cables and associated infra-structure in Airport land, which will be subject to upwards-only rent reviews throughout the term; five yearly in accordance with the Jersey Retail Price Index and market reviews every 20 years.

The prospective Lessee shall receive a rent free period of 12 months, during which the sub-station shall be constructed. Once built, after a 2 year commissioning period, the JEC shall surrender back to the Public, its existing site of 815 sq.m./8,773 sq.ft at the Airport Garage site. This will allow the possibility of generating further revenue, subject to planning, from incorporating the land with the existing retail business or by separate letting. In the longer term, upon expiry of the principal lease, the site offers the prospect of development, subject to usual consents.

In view of the importance of this site from both parties’ perspective, the proposed lease terms have been the subject to an external independent valuation. This confirmed that the proposed rental represented the “best commercial terms available” for the area of land concerned.

Standard long term lease provisions will apply in this instance with the JEC being responsible for all constructions costs, utility costs, Foncier and Occupiers rates as well as the buildings’ insurance and third party Public liability insurance.

The Public will also recover its legal and surveying fees in entering into this contract.

Recommendation

It is recommended that the Minister for Treasury and Resources approves the terms set out above and authorises a suitable contract lease to be passed between the Public of the Island and The Jersey Electricity Company Limited before the Royal Court.

Written By: Neil Sproston

Signature …………………………

Authorised By: Eric le Ruez

Signature ………………………… Date 24 July 2007