Government of Jersey

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A decision made (18.09.2009) regarding the transfer of operational control of Sous L'Eglise, Rue du Presbytere, St. Peter, from the Health and Social Services Department to Jersey Airport.

Decision Reference: MD-E-2009-0149
Decision Summary Title :	DS ~ Transfer of Sous L’Eglise from Public Health to Airport		Date of Decision Summary:	13th August 2009
Decision Summary Author:	J. Shilliday, Finance & Commercial Director, Jersey Airport		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Oral & Written		Person Giving Oral Report:	J. Shilliday
Written Report Title :	Sous L’Eglise, Rue du Presbytere, St Peter – Transfer of Operational Control from the Health and Social services Department to Jersey Airport		Date of Written Report:	13th July 2009
Written Report Author:	P. Griffin, Principal Valuer, Jersey Property Holdings		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Sous L’Eglise, Rue du Presbytere, St Peter – Transfer of Operational Control from the Health and Social Services Department to Jersey Airport
Decision(s): The Assistant Minister:- accepted the independent valuation by Jersey Property Holdings, of £750,000, as a fair and proper value for the transfer of the property Sous L’Eglise accepted the negotiated compensation payment of £150,000 to reflect the loss of revenue and costs incurred by Health & Social Services agreed that £450,000 be paid to Health & Social Services, from the 2009 Capital Budget approved for Regulatory Compliance and Safeguarding agreed that the approval of the Treasury & Resources Minister be sought for the balance of £450,000 to be paid in 2010 from the Capital Budget submitted for that year of £2,000,000 in respect of Regulatory Compliance and Safeguarding.
Reason(s) for Decision: To comply with the requirements of the Director of Civil Aviation relating to the granting of an Aerodrome Licence to Jersey Airport. The property needs to be demolished to meet Regulatory Requirements as stated in ICAO Annex 14.
Resource Implications: Capital Cost - £900,000 There is an offer from a third party to demolish and remove Sous L’Eglise at no cost to the Airport. This is being co-ordinated by Jersey Property Holdings.
Action required: J Green (as Accounting Officer) to formally sign written report agreeing the above terms and forward to Health & Social Services J Shilliday to forward a copy of this Decision and supporting report to States Treasury to seek the required funding approval from the Treasury & Resources Minister
Signature:		Position: Assistant Minister – Economic Development
Date Signed:		Date of Decision (If different from Date Signed):

Sous L'Eglise - Transfer from Public Health to Airport.

Decision Reference: MD-E-2009-0149

CHIEF MINISTERS DEPARTMENT

JERSEY PROPERTY HOLDINGS

SUBJECT; Sous L’Eglise Rue du Presbytere St Peter - Transfer of operational control from the Health and Social Services Department to Jersey Airport.

FILE REF PG 1518/1-5

Purpose

To arrange for the operational control of the property and land known as Sous L’Eglise Rue du Presbytere St Peter (Sous L’Eglise) to be transferred from Health and Social Services Department to Jersey Airport upon the transfer of compensatory funds from Jersey Airport.

Background

In 1980 a light aircraft crashed into the property but it was rebuilt at the time to provide the 3 residential units that exist today.

The property formed part of a bequest to The States of Jersey by the late Harold Le Seelleur, who died in 1996. Under his will of realty dated 28th December 1988 this property and various others were left to the Public "for the benefit of the aged, infirm and needy residents of the Island".

In accepting the bequest, the States agreed (P.71/97) that the administration and all benefits received from the property should be vested in the then Health and Social Services Committee (HSS) in accordance with the will.

A compensation payment equivalent to the capital value of the Asset must be paid to the fund in respect to any transfer of this Asset between the two States Departments along with an agreed amount to reflect the loss of revenue and costs incurred by the fund.

The Executor of the will has agreed to this principle.

Current Situation

The matter was first considered in 1997 after the property was identified in the 1996 United Kingdom Civil Aviation Authority Report. By 2003 a sum of £500,000 was agreed to be the amount payable to the HSS by the then Harbours and Airport Committee (H&A) but insufficient funding resulted in the offer being withdrawn, (H&A Committee Act 29 January 2003). In expectation of this proposed payment and transfer, HSS agreed to vacate the property. With the exception of its temporary use in the summer of 2002, it has remained vacant with HSS forgoing the rental income.

The Aerodrome Standards Department (ASD) audit reports of 2007 and 2008, for the Director General of Civil Aviation (DCA) to licence the airport in accordance with the requirements of International Civil Aviation Organisation (ICAO) Annex14, state there is no option but for the airport to improve the obstacle environment.

The incident in 1980 has demonstrated that Sous L’Eglise is an unacceptable risk to aviation safety and cannot be lived in owing to the risk to the safety of the inhabitants and air traffic. The building must therefore be demolished.

JPH has obtained Planning permission for the property which is a Building of Local Interest (BLI) to be demolished, Planning permit P/2008/2657 date 13/03/09.

With Jersey Property Holdings (JPH) acting as independent advisors on value, terms and conditions have been agreed between Jersey Airport and HSS.

As the property will remain in the ownership of the Public all that is needed is the operational control be transferred from HSS to Jersey Airport.

JHP arranged the Asset Valuation of the whole of the Public’s property portfolio as at 31/03/07. The three units were valued by an external independent firm of Chartered Surveyor (Drivers Jonas) at £375,000, £195,000 and £185,000 respectively.

The Principle Valuer of JPH, a qualified Chartered Valuation Surveyor has reviewed these valuations using the same principles as set out by the Royal Institution of Chartered Surveyors “Valuation and Appraisal Manual 6th Edition”, assuming willing vendor and purchaser and that the use of the property would have remained unaffected by it proximity to the airport. The manual requires that any diminution in value caused by the property transgressing the aerodrome’s transitional surface is disregarded when the property is valued.

JPH considers the 2007 valuation remains valid and that a sum of £750,000 represents a fair and proper value for the transfer of the property Sous L’Eglise.

Once the building has been demolished the land will be included in Jersey Airport property portfolio and will need to be revalued in accordance with GAAP, by an external independent valuer, as part of the interim valuation process.

In addition to the capital value, as the property has remained vacant, HSS lost significant revenue and incurred additional costs. To this end it has also been agreed that a sum of £150,000 should also be paid by Jersey Airport in recognition of these factors.

Conclusion

JPH recommend to both Jersey Airport and HSS that the sum of £750,000 represents a fair and proper value for the transfer of the property Sous L’Eglise and as agreed between the parties an additional sum of £150,000 be paid in respect of the lost revenue stream and expenses incurred.

Recommendation

The Accounting Officers of HSS and Jersey Airport agree to the considerations as set out above and arrange the transfer of £900,000 (£450,000 in 2009 and £450,000 in 2010) from Jersey Airport to H&SS in exchange for the operational control of the property know as Sous L’Eglise.

Written By:

Paul Griffin – Principle Valuer JPH Signature……………………

Reviewed by:

Ray Foster - Assistant Director of Finance JPH Signature……………………

Authorised By:

Mike Pollard – Chief Officer of H&SS Signature……………………

Julian Green – Chief Officer of Jersey Airport Signature……………………

13th July 2009