Disposal of Aquila Youth Club site

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A decision made to support the recommendations of Jersey Property Holdings to sell the former Aquila Youth Club site.

Subject:	Disposal of Aquila Youth Club Site for Social Rented Housing Development by Les Vaux Housing Trust
Decision Reference:	MD-TR-2006-0014	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:
Written Report – Title	Disposal Of Aquila Youth Club Site For Social Housing.	Written report - author		R. Foster
Decision(s): The Minister supported the recommendation of Jersey Property Holdings to sell the former Aquila Youth Club site to the Les Vaux Housing Trust for the nominal sum of £10 for the development of 26 one bedroomed flats for social rented accommodation. The Minister authorised the release of the necessary funding from the Housing Development Fund to fund capital and interest subsidies associated with the development. The Minister authorised the Treasurer of the States to receive any subsequent agreed sum on completion of the project and credit that sum to the Housing Development Fund. Under Standing Order 168 (1) (a) and 168 (3) the Treasury and Resources Minister hereby notifies the States that he has accepted the recommendation of Property Holdings to agree to the above land transaction.
Reason(s) for decision: 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. The scheme is considered to provide good value for money and meets the priority housing requirements identified in the revised Planning for Homes report (RC63/2005). It is estimated that the net capital subsidy and ongoing interest subsidy costs can be contained within the Housing Development Fund.
Action required: Head of Corporate Capital to report decision to the Housing Department, States Greffe and Chairman of the Les Vaux Housing Trust.
Signature: (Minister/ Assistant Minister)			Date of Decision: 06/02/2006

Disposal of Aquila Youth Club site

TREASURY AND RESOURCES MINISTER

Housing R&P - disposal of aquila youth club site for social housing

development by the Les vaux housing trust

1. Purpose of Report

1.1. The Treasury and Resources Minister is asked to consider and comment on the report and proposition of the Housing Committee (as previously constituted), which proposes the sale of the Aquila Youth Club site to the Les Vaux Housing Trust for the initial nominal sum of £10.

2. Background

2.1. The States purchased the existing Aquila Youth Centre for £625,000 in October 2000 on the basis that it would be developed for social rented housing.

2.2. The building was demolished in June 2002 at a cost of some £55,000, since when the site has been used to provide temporary parking provision.

2.3. It has taken some time to determine an appropriate building on the site that is acceptable in planning terms and both meets the requirements of the Les Vaux Housing Trust and is affordable within the social rented amortisation model.

2.4. The proposed scheme, comprising 26 one bedroom flats, has undergone extensive remodelling and value engineering. The latest cost estimate for construction and associated fees is some £3.2 million.

2.5. The revised Planning for Homes report (RC 63/2005) identified a need for ‘sheltered’ housing. The proposed development is ideally located and designed to support the needs of independent, ambulant elderly single people or couples.

2.6. The attached report and proposition, approved by the former Housing Committee at its meeting of 28 October 2005 (Act B15), proposes the sale of the site to Les Vaux Housing Trust for a nominal sum of £10, with the development to be financed and managed by the Trust.

2.7. Trust borrowing over a 25 year payback period is to be supported by a letter of comfort with interest subsidy sums above 4% being met from the Housing Development Fund.

2.8. On completion, it is anticipated that the Trust will provide a contribution to the States for the acquired land. The scheme amortisation model indicates that this sum will be in the order of £246,500, although the final figure will depend on the overall development cost and rental assumptions in place at the time of occupation.

2.9. The financial position will be reviewed once the tender process for the works has been completed.

3. Comments

3.1. The proposal is consistent with previous developments undertaken in conjunction with Housing Trusts in the town environment.

3.2. The provision of a development subsidy equivalent to the land acquisitions cost of £625,000 less any contribution to land, together with ongoing interest subsidy above 4%, can be contained within the Housing Development Fund on current modelling assumptions.

3.3. As the property will be managed by the Les Vaux Housing Trusts, there will be no direct ongoing revenue costs to the States other than interest subsidy payments.

3.4. The proposition refers to the provision of private sector rent rebate payments to the prospective tenants at an estimated cost of £80,000 per annum, but these payments are determined by the financial circumstances of individuals and would need to be met if those individuals were housed elsewhere in the private or public rental sectors.

3.5. The total scheme cost, including land acquisition, demolition, estimated development costs and the Trust’s financing costs, is some £4.044 million, which equates to approximately £155,500 per unit.

4. Recommendations

4.1. That the Minister supports the proposition of the former Housing Committee and comments on the proposition in the following terms:

“The Treasury and Resources Minister supports the sale of the freehold of the Aquila Youth Club Site to the Les Vaux Housing Trust for a nominal sum. The capital subsidy arising from the anticipated net loss on sale, together with ongoing interest payments required to support the proposal, can be contained within the Housing Development Fund. The transfer is in accordance with continuing States policy to encourage the private sector to engage in the provision of social housing.”

4.2. That, should the States support the proposition, the Minister authorises the release of the necessary funding from the Housing Development Fund.

5. Reasons for Decision

5.1. The proposition 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.

5.2. The scheme is considered to provide good value for money and meets the priority housing requirements identified in the revised Planning for Homes report (RC63/2005).

5.3. It is estimated that the net capital subsidy and ongoing interest subsidy costs can be contained within the Housing Development Fund.

States Treasury Corporate Capital

7 February, 2006 for Decision Meeting 30/01/2006