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A decision made (05/04/2007) regarding: Scott Gibaut Trust – Development of Clearview School.

Subject:	SCOTT GIBAUT TRUST – DEVELOPMENT OF CLEARVIEW SCHOOL
Decision Reference:	MD-H-2007-0020		Exempt clause(s):	n/a
Type of Report: (oral or written)	Written		Person Giving Report (if oral):	n/a
Telephone or e-mail Meeting?	n/a		Report File ref:	WR- clearview school development
Written report – Title	SCOTT GIBAUT TRUST –N DEVELOPMENT PROPOSALS FOR CLEARVIEW SCHOOL, ST HELIER
Written report – Author (name and job title)	Carl Mavity Director of Estate Services
Decision(s): The Minister agreed to lend his support to the Scott Gibaut Trust’s participation in the scheme and on behalf of the Trust, seeks the approval of the Treasury and Resources Minister for the issue of the requisite letter of comfort for the Trust’s lenders, limited to subsidy support from the Housing Development Fund where the Trust’s interest charges exceed 6 per cent.
Reason(s) for decision: 1. The proposal is consistent with the States ongoing policy to facilitate the development of social rented housing in conjunction with Housing Trusts, through the provision of capital and interest subsidy where required. 2. The scheme is considered to provide good value for money.
Action required: Copy of decision to Treasury & Resources Minister
Signature: (Minister)		Date of Decision: 5 April 2007

Scott Gibaut Trust – Development of Clearview School.

REPORT FOR MINISTER FOR Housing

SCOTT GIBAUT trust - development proposals for

CLEARVIEW SCHOOL, ST HELIER

Purpose

The Minister is asked to support proposals put forward by the Scott Gibaut Trust for the development of Clearview School, Clearview Street, St Helier and to approach the Treasury & Resources Minister on behalf of the Trust to issue a letter of comfort that agrees to provide interest subsidy to the Trust should interest payable exceed 6%.

Background

1. The Trust has been incorporated under the provisions of the Loi (1862) sur les teneures en fideicommis et l’incorporation d’associations for the purpose of providing residential accommodation to persons in need.

2. The development will provide 7 No. 1 bedroom self contained units of accommodation together with communal amenities and will provide accommodation for persons who had suffered brain injuries and related physical disabilities.

3. The transfer of ownership of the school site from the Public to the Trust is to be the subject of a Report and Proposition to be lodged in the immediate future.

4. Other than planning issues, which have been resolved, the States will have no direct interest in this development.

5. Pledged donations towards the development have been received in the amount of £342,371 leaving a balance of £698,507 based upon available estimates.

6. The Trust will seek a total facility £700,000 from HSBC, subject to the support of the States, through a letter of comfort, to underwrite interest payments above 6%.

Comments

1. The type of accommodation being proposed is considered appropriate to meet need requirements identified for social rented housing.

2. The Trust will purchase the building for a nominal consideration and enter into a development agreement, with anticipated start on site in the Autumn of 2007.

3. The overall land acquisition and development cost can be analysed as:

· Development costs (including fees etc) £1,040,878 (£148,697 per unit)

· Pledged Donations £342,371 (£48,910 per unit)

· Borrowing £ 698,507 (£99,787 per unit)

4. A financial model is included as Appendix A, which takes a prudent view of rental inflation as averaging 2.5% per annum over a 23 year loan repayment period.

5. Funding would require the support of the States through the provision of a letter of comfort with an interest subsidy should the effective interest rate exceed 6%.

PROPOSED DECISIONS

That the Minister lend his support to the Les Vaux Housing Trust’s participation in the scheme.

REASONS FOR DECISIONS

1. The proposal is consistent with the States ongoing policy to facilitate the development of social rented housing in conjunction with Housing Trusts, through the provision of capital and interest subsidy where required.

2. The scheme is considered to provide good value for money.

Housing Department

30th March 2007