Alderley Edge Parish Council will borrow up to £2 million in order to have a new medical centre built at the front of the festival hall.
Councillors agreed to apply for approval from the Department for Communities and Local Government (DCLG) to enable them to borrow up to £2m from the Public Loan Works Board, through Cheshire East Council, at a fixed rate.
It was agreed in June 2014 that NHS England will pay an annual rent of £135,000 for the facility, subject to a fixed three yearly increase of 8.25%, over a lease period of 21 years. In addition there will be a rental income from the ground floor pharmacy and any occupants of the second floor, who are yet to be identified.
Speaking at the Parish Council meeting on Monday, 12th January, Cllr Frank Keegan "The income will be a minimum of £4 million (from the surgery and the pharmacy) over a 21 year lease, and it could rise to £5m dependent upon the lease occupation of the second floor - that's uncertain but the first two are certain. The second floor is uncertain as we will have breaks no doubt during the 21 years but nonetheless the figure is £4m certain.
"With a borrowing figure of £2m, using indicative figures supplied by Cheshire East Council, it suggests that the total repayment cost could be £2,850,000 so our income over the period will be a minimum of £4m and the cost will set at £2.85m."
Cllr Mike Williamson said "The builders have said an upper limit of £2m, we will not go over that figure, unless something happens that is unforeseen, but we will be pretty close to it."
The Parish Council is looking to repay the loan in 16 to 17 years and at that stage they expect the income, excluding any rent from the second floor of the medical centre, to be about £250,000 per annum.
Cllr Keegan added "PWLB is the Public Works Loan Board which is authorised to lend money to Councils, as long as the Secretary of State for Communities agrees. The Motion last night was part of the process. AEPC does not have to do a massive consultation, simply because there will be no cost to the council taxpayer.
"If we had wanted to borrow money and pay for it out of the precept, then we would have needed a referendum. However, our project is self-funded so we can get away with just notices which advise the public of our actions.
"The rates are very competitive and are fixed for the duration of the project, giving us certainty of costs, the lease gives us certainty of income, hence we can predict that the loan will have been repaid over a period of around 16 or 17 years. After that, the council taxpayer will receive an annual rent of around £250,000 to set against any possible expenditure of the Parish Council."
Work has started at the festival hall to construct the new medical centre and demolition works are expected to occur in a matter of weeks.
Alderley Edge Parish Council is working towards signing a building contract with P.E. Jones by the end of the month and they are "waiting with bated breath" to sign the lease agreement with the doctors.
Comments
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That just about sums up the situation.
The lease is not yet signed.
As it says in the article above
"Alderley Edge Parish Council is working towards signing a building contract with P.E. Jones by the end of the month and they are "waiting with bated breath" to sign the lease agreement with the doctors."
The District Valuer must be delighted with this deal because normally the NHS would be entering into a PFI deal which would have cost the taxpayer about 8 or 10 times what it is going to cost, using the Alderley Edge model. PFI deals often get sold as investments, but in Alderley Edge this can not happen - because the asset will always be owned by the local Council Taxpayer.
And, because AEPC kept control of the whole site, the Festival Hall will always be free from any territorial threat from the Medical Centre.
A fantastic solution from Conservative Councillors in Alderley Edge, showing the way forward to all local Councils. That just about sums up the situation, as Pete Taylor would say.
Where have you been? The tender process was conducted by MBC in early 2009 and the tenders were viewed and chosen by a panel consisting of : some Parish Councillors, some NHS staff, some people who were on the Parish Plan group, and some people who were on both the Edge Association and Village Design Group. I was in Macclesfield the day they were chosen and I do not know all the details. I am sure the Clerk will have a file somewhere in the Office.
Now that the process is proceeding, we have professional advisers who ensure we get value for money!!
To get back to basics - are they right in funding a construction project for a private business? Are they right in speculative development of any sort? I would prefer it if they stuck to streetlighting and hedges, as seems more appropriate for a Parish Council.
In view of my experience as a Project Manager in construction for both Trafford Park Development Corporation and Manchester City Council Special Projects Department - I would question whether a 6 year old tender is still valid at all.
I understand that PE Jones won the contract originally after 2 cheaper tenderers went out of business, ie theirs was possibly the 3rd best price 6 years ago. I would bet that if the job was put out to tender again the current market would beat PE Jones' price from 2009. I would certainly not recommend using such an outdated price on any job I was responsible for myself.
Perhaps the Parish Councillors ought to wait until after the May election to appoint the contractor, to see if it is the wish of the people of Alderley Edge that they do so? Nothing clearer than a vote on the issue and crosses in boxes, eh?
Frank says he was in Macclesfield on the day that the tenders were decided upon, so he did not know the details. One might have thought that Macclesfield would be the place where Macclesfield Borough Council made decisions such as these.
Who is the PE Jones contract with? Surely not with MBC, which does not exist.
Hey, what do I know?
I repeat what Frank said:
"... we can get away with just notices which advise the public of our actions."
That just about sums up the situation.
This would put something special back into the community and the Emerson Group could get the chance to put some of the massive profits they have made, and are still making, out of all the other developments in Alderley Edge and the surrounding area over the years.
A two million pound project is small fry by Emerson standards so they would hardly miss a couple of million being donated to fund a worthy and desperately needed cause.
It’s about time they put something back into the community that’s not there just to boost their profit margin..
Do you suggest we wait until after May and then start a new tender process? What is your estimate of a start time for the project? Or should it just be abandoned?
Your fellow Councillor's comment implying there is no contingency in the contract for unforeseen circumstances is more worrying to me than anything else. 'Unforeseens' could possibly cost another £2M on top of the tender sum. Who would pay that extra cost?
Cost control should be more important than time constraints when it's public money that's being spent.
Every construction project of any type relies on three principle things.
1) Quality, Time and Cost.
It sounds to me like this is potentially a recipe for disaster.
Could Lyme Green be replaced by Festival Hall?
If AEPC want some independent professional advice at no cost to review the project them please contact me through Lisa Reeves who has my contact details.
Every project that I've experience of has either gone over budget, late on delivery of the quality of the final project is far diminished from what the client was expecting they were going to get at inception.
Please think before you type. The Parish Council has professional advisers, and we have various contract clauses in place to ensure that there is no AEPC liability for cost overruns. Even in the case of absolute disaster, we have an insurance policy.
AEPC has a guarantee of cost, and we have a guarantee of income. There is no possibility of the Council taxpayer paying for this project.
I notice you say you don't live in Alderley Edge (you don't pay Council tax) and frankly it is becoming a bit tiresome to have so many people from outside the village - and therefore no interest in the project - express ill informed opinions.
I, as an Alderley Edge resident and voter, would be more impressed if you accepted his generous offer of 'independent professional advice at no cost', particularly in view of Cllr Williamson's apparent naivety regarding unforeseen contract costs.
Unquantified costs, ie those not specifically included in the contract price, will always be the dearest. If you truly have a 6-year-old fixed price contract sum which will not change whatever happens during the contract term, I apologise and I will eat my words. But if not - please don't imagine that your insurers will be keen to sub the difference.
I do think before I type. I do not intend to offend you or any one else when I comment on these articles. I just offer my opinion. If you have taken offence at my opinion then that is for you to deal with.
As stated above by Lisa:- On Wednesday 14th January
"The lease is not yet signed."
As it says in the article above
"Alderley Edge Parish Council is working towards signing a building contract with P.E. Jones by the end of the month and they are "waiting with bated breath" to sign the lease agreement with the doctors."
Can you confirm if this has now changed and that AEPC has signed a lease with the tenant (Doctors).
If not then I too suggest that you "Please think before you type."
Until AEPC has a legally binding contract with the tenant through the signing of the lease then AEPC does not have a guaranteed income.
I have seen too many clients rush into getting the contractor on site before ironing out all of the details. I have been engaged in a professional context on several litigation cases where there has been disputes between Landlords / tenants and Employer/Contractor where leases and building contracts have been signed before all of the details on cost quality and programme have been ironed out.
In my 25 years as a professional in the construction industry, one thing that I have identified is that there are always changes to construction projects from the pre-construction phase to completion.
Another is that not all "profession advisors" are a s professional at their job in advising their clients as others.
As stated earlier, these are only my opinions and you can take them or leave them.
Once again, If AEPC want some independent professional advice at no cost to review the project them please contact me through Lisa Reeves.
If not, then that's fine and I hope it goes as well as you think it will.
Please think before you type. Repeatedly speaking to the readership of this excellent and informative site (very many of whom are the electorate who put you where you are) as if they are five year olds who have wet their pants is not necessarily the best way forward. For you or for this village.
People ask questions and offer opinions (and on this thread even assistance) and you consistently rebuff them with comments which are at best borderline rude and at worst downright unpleasant.
Courtesy costs nothing.
Although you are sometimes rude and in some cases plain rude and offensive
You are also discourteous to any one outside the village who has a suggestion or comment as though surplus to requirements.
However, I do give you credit, whether I believe you to be right or wrong, for raising your head above the parapet and getting involved on this site. With a couple of odd exceptions, many other local Councillors both in Alderley and Wilmslow, never communicate or voice their opinions - other than at election time. So well done on that score.
In my case, I lived in Alderley Edge for several decades and my family have lived in Alderley Edge for many generations - certainly a lot longer than the Councillor!
As Council Tax payers to Cheshire East we have every right to question what happens within all areas of the Borough including Alderley Edge and most sensible, democratic politicians would recognise this.
In addition we choose to support the businesses of Alderley Edge and therefore contribute to the very survival of the town as a commercial entity.
Cllr Keegan appears to be building something of a negative reputation for himself and his discourtesy and hostility toward people who genuinely care for Alderley Edge and it's people will not go unnoticed.
The CEC code of conduct for Councillors is linked to near the top of this document and makes an interesting read: http://bit.ly/1zUsFbT
Oh dear, Cllr Keegan have you read any of these requirements for you as CEC / AEPC representative?
You are supposed to be nice to us! And helpful! And respectful!
Whatever happened to make it go so wrong ??