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A decision made 10 September 2015:

Decision Reference: MD-PH-2015-0107

Decision Summary Title :

Lease of Harbour Properties to Ports of Jersey Ltd

Date of Decision Summary:

09 September 2015

Decision Summary Author:

Director of Estates

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title :

Lease of Harbour Properties to Ports of Jersey Ltd

Date of Written Report:

09 September 2015

Written Report Author:

Principal Property Manager

Written Report :

Public or Exempt?

Rpt: Public

SD1: Public

SDs 2, 3, 4 & 5: exempt QE Article 33 (b)

Subject: Lease of Harbour Properties to Ports of Jersey Ltd:

Elizabeth Harbour & Terminal, Elizabeth Marina, Albert Pier, New North Quay, La Folie, South Pier & La Galots, Victoria Pier, La Collette (West of Spine Road), Fisherman’s Quay and the Fuel Berth, St Helier
Gorey Pier and Harbour, St Martin
St Catherine’s Breakwater, Land and Marine Facilities, St Martin
Rozel Harbour and Pier, Trinity
Bouley Bay Harbour and Pier, Trinity
Bonne Nuit Harbour and Pier, St John
Greve de Lecq Pier and Land, St Ouen
St Brelade’s Pier and Rock Mole, St Brelade
St Aubin’s Fort Pier, Harbour and Land, St Brelade
La Rocque Harbour and Pier, Grouville
Corbière Lighthouse and Land, St Brelade

(File ref: GEN. 10)

Decision(s):

1. The Minister decided, as recommended by Jersey Property Holdings, to notify the States of his intention to:

a. lease to Ports of Jersey Ltd the above-named harbour properties for a term of 150 years commencing on 01 October 2015 (or date as agreed between the Lessor and Lessee) for a rental of £1.00 pa paid as an initial lump sum, and on other terms consistent with the in-principle terms set-out in the accompanying report, but subject to the Minister being advised by Jersey Property Holdings and the Law Officers’ Department of their agreement to the final draft of the lease, and with each party to meet their own costs in passing contract before Royal Court.

b. confirm the above decision after giving the States 15 working days’ notice of the transaction, and to cause the transaction to be completed.

Reason(s) for Decision:

Under Standing Order 168 (1) (a) the Minister is obliged to notify the States that he has accepted the recommendation of Jersey Property Holdings to agree to the above land transaction.

Resource Implications:

The financial implications of this decision are detailed in the accompanying report.

There are no manpower implications in respect of this decision.

Action required:

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.

Signature:

Position:

Deputy E J Noel *

Assistant Minister for Treasury & Resources

Date Signed:

Date of Decision (If different from Date Signed):

Harbour Properties - Various: Ports of Jersey Limited: Lease

TREASURY AND RESOURCES DEPARTMENT

JERSEY PROPERTY HOLDINGS

Property Transaction for Ministerial Decision - Minister for Treasury and Resources

Click F11 to move to each field (This Text is hidden)PUBLIC

PUBLIC

Lease of Harbour Properties to Ports of Jersey Ltd

Gen 10

Purpose

To seek the Minsiter’s approval for the Public to lease the commercial and outlying Harbours to the Ports of Jersey Ltd on terms consistent with the in-principle terms set-out below, but subject to the Minister being advised by Jersey Property Holdings and the Law Officers’ Department of their agreement to the final draft of the lease.

Background

P70/2012 was approved by the States Assembly on the 8th October 2012 including the in principle transfer of those Property Assets under the operational control of the Ports of Jersey to the new company subject to the final approval of the Incorporation Law and the associated Transfer Regulations.

The States Approved the Incorporation Law P5/2015 on the 2nd June 2015 and Royal Assent has now also been received.

The Regulations have been approved by the States at their meeting of the 8th September 2015 with a proposed Incorporation date of the 1st October 2015.

On the 12th June 2015 the Public of the Island acquired, inter alia, the freehold of the Foreshore of the Island of Jersey from the Crown allowing the Public to lease all those parts of the Commercial and outlying Harbours, that are situated on the Foreshore, to the new company upon Incorporation. A schedule of the Harbour properties proposed for inclusion in the lease, along with identification plans [1] of the land, are attached, referred to as Supporting Document N°1 [SD1]. Detailed boundary plans of specific sites are attached, referred to as Supporting Document N°2 [SD2]. The first draft of the proposed lease has been prepared by lawyers acting for Ports of Jersey Ltd – copy attached, referred to as Supporting Document N°3 [SD3].

The following in-principle terms have been prepared by the Economic Development Department and Jersey Property Holdings:

1	Demised Premises	The Commercial and outlying Harbours in the Island of Jersey belonging to the Public of the Island
2	Lessor	Public of the Island of Jersey (Public)
3	Tenant	Ports of Jersey Ltd (PoJ)
4	Lease Term	150 years from 1st October 2015 or such other date agreed between the parties.
5	Rent	£1.00 per annum payable in advance as one lump sum of £150.00 on the commencement of the lease.
6	Rent Reviews	None
7	Repairing/Insuring Liability	Tenant obligation to maintain and repair any buildings, structures or constructions forming part of the Demised Premises in accordance with the Public Service Obligations (PSO) (copy attached, referred to as Supporting Document N°4 [SD4]), the Memorandum of Understanding (MOU) (copy attached, referred to as Supporting Document N°5 [SD5]) and the Strategic Business Plan. Tenant obligation to ensure all outside and landscaped areas forming part of the Demised Premises (and not built on) are properly managed in accordance with the principles of good estate management. Tenant to keep all open areas of the Demised Premises accessible to the Public of the Island in accordance with the PSO, and with such access being subject to any rules and regulations as may be determined from time to time by the Tenant for operational reasons or for reasons relating to matters of health and safety. At the end of the Term the Tenant shall yield-up the Demised Premises in a good and tenantable state of repair. The Demised Premises shall be insured against such risks and for such reinstatement values as the tenant may reasonably determine from time to time. Tenant to maintain and enforce a Public Liability Insurance Policy to a limit to be agreed between the Lessor and the Tenant from time to time.
8	Permitted User	The Demised Premises shall be permitted to be used and operated in accordance with the Incorporation Law and any other governance documentation.
9	Rates and Utilities	All payable by Tenant

10	Alienation	Sub-letting shall be permitted as follows 1. Any lease for 50 years or less or licence, - consent to these transactions is automatically granted under the head lease. 2. If the sub-Lessee requires the Public to be party to the sub-lease then formal consent will need be requested from the Lessor, consent would not be unreasonably withheld or delayed. 3. In respect of a lease of over 50 years and where the matter has already been referred to the Port Policy Group and Shareholder (the Treasury Minister) and been approved as part of the Ports’ Business Plan, under the MOU requirement, then PoJ would inform the Treasury Minister on the basis of an “assumed approval”. If the Shareholder wished to challenge or seek any clarification in relation to the PoJ proposal, the Shareholder would then have 15 working days in which to write to the PoJ Board in this regard. 4. If the sub-Lessee requires the Public to be party to the lease then formal consent will need be requested from the Lessor, consent would not be unreasonably withheld or delayed. *It is noted that the Director of JPH currently has the delegated function to approve these consents where the Public is to be party to a lease agreement.
11	Alteration	Where any alteration / work requires consent under the Planning law the Lessor shall acting reasonably counter sign any application required by the Tenant.
12	Services	Tenant responsible for all utilities, costs and services associated with the use and occupation of the Demised Premises. Rights shall be reserved for the Landlord in respect of all pipes, drains and mains services which pass beneath any part of the Demised Premises – with right of access reserved to maintain, repair and replace. Other rights to be granted and reserved to be agreed once plan(s) of Demised Premises are agreed and the provisions of the Public Service Obligations are finalised.
13	Lessor’s Break Option	None

Hypothication

Tenant will be permitted to hypothecate the Lease in accordance with the Loi (1996) sur l'hypotheque des biens fonds incorporels provided that every proposal to secure a registered charge on this lease is formally approved in advance in writing by the Minister for Treasury and Resources, on behalf of the Lessor, (which approval shall be unreasonable withheld or delayed).

Legal Costs

Each Party to bear their own legal costs incidental to the preparation and registration of this lease.

Tenant to pay all reasonable legal and other professional costs of the Landlord during the Term where the Landlord's Consent is required.

Any dispute under the lease in respect of the meaning or effect of any provisions shall be referred to a single arbitrator appointed by agreement between the Landlord and the Tenant, and failing such agreement such arbitrator as nominated by the President of Royal Institution of Chartered Surveyors – and the terms of the Arbitration (Jersey) Law 1998 shall apply.

Conclusion:

The Incorporation Law was approved by the States Assembly on 2nd June 2015 from P.5/2015 ‘Draft Air and Sea Ports (Incorporation) (Jersey) Law 201-’, and was granted Royal Assent on 15th July 2015.

The Appointed Day Act approved by the States Assembly on 8th September 2018 brings the Air and Sea Ports (Incorporation) (Jersey) Law 201- (the “Incorporation Law”) into force in 2 tranches. The initial tranche will come into force immediately on approval of the Act by the States Assembly,

This will activate the Regulation-making powers in the Law, and thus allow the draft Regulations (P.80/2015), which transfer the staff and property to the new entity to be debated and approved on 8th September 2015. This tranche will also create the new company (as a ‘shell’ with no assets or legal duties), and allow assets, etc. to be transferred to that company, as described in Part 5 of the Incorporation Law.

Recommendation:

It is recommended that the Minister for Treasury and Resources approves the leasing of the Demised Premises to Ports of Jersey Ltd, structured on the in-principle terms as set-out above, but subject to the Minister being advised by Jersey Property Holdings and the Law Officers’ Department of their agreement to the final draft of the lease.

Written By: Principal Property Manager

Signature …………………………

Authorised By: (Director/Assistant Director JPH)

Signature ………………………… 09 September 2015

[1] All plans contained in the supporting documents are subject to refinement as part of the process of the Lessor and the Tenant agreeing the final draft of the lease