Appendix B – Commercial Assets Sub-Committee

Terms of Reference

 Objective

Within the overall policies and strategies set by the Council, to provide leadership, decision making and accountability for the management of the Council's Investment properties and commercial assets within the Council’s regeneration programme.

Membership

 A minimum of 4 Members reflecting political balance, with at least 1 member from each political party. An independent member will also be appointed.

1. Functions

1. Acquisitions relating directly to Regeneration purposes only (acquiring assets for alternative purposes is not covered via the Objectives of this Sub-Committee)

(a) To receive recommendations from officers (where officer/member delegation financial limits are exceeded) as to possible new strategic property acquisitions for regeneration purposes only.

(b) Following (a) above, to give an initial steer on whether to investigate further those potential acquisitions.

(c) Following (b) above and any subsequent reports from officers, to make recommendations to the Corporate Policy & Resources Committee to proceed with acquisitions in accordance with relevant Council procedure rules.

 2. Disposals

(a) To receive recommendations from officers (where officer/member delegation financial limits are exceeded) as to the potential freehold (or long leasehold) disposal of investment assets and/or commercial assets within the regeneration programme.

(b) To receive recommendations from officers (where officer/member delegation financial limits are exceeded) as to the potential joint venture initiative involving investments assets and/or commercial assets within the regeneration programme.

(c) Following (a) or (b) above to give an initial steer on whether to investigate further those potential disposals or joint venture initiatives.

(d) Following (c) above and any subsequent reports from officers, to make recommendations to the Corporate Policy & Resources Committee to proceed with the particular freehold (or long leasehold) disposal or joint venture initiative in accordance with the relevant Council procedure rules.

(e) To receive recommendations from officers and approve (or otherwise) any proposals for the granting of a new or reversionary lease at an aggregated rent over the term which exceeds officer delegation levels.

3. Management of Investment Assets and Commercial Assets within the Regeneration Programme

(a) To approve leasehold disposals (lettings) in investment assets (where officer/member delegation financial limits are exceeded.)

(b) To approve dilapidation settlements valued between £101k and £500k and make recommendations to Corporate Policy and Resources Committee for any that exceed £500k.

(c) To approve the change of use of investment assets including recommendations to the Corporate Policy and Resources Committee regarding alternative use or classification of the asset.

(d) To receive monthly update reports on the management of the investment assets in accordance with the adopted Asset Management Strategy, including rental income, potential letting opportunities, pending break option and lease expiries over the next 12- month period, significant assignments and any other estate management issues based on officer recommendations.

(e) To approve the exercise of a break option under the terms of lease of land or property where officer/member delegation financial limits are exceeded.

(f) To approve or agree to the surrender of a lease of land or property where officer/member delegation financial limits are exceeded.

(g) To approve new lettings where the rental income per annum (net of VAT) exceeds £100k.

(h) To approve lease renewals where the rent in the first year of the new lease is less than 50% of the passing rent of the previous lease, or where the financial impact exceeds £250k.

(i) To receive monthly arrears reports on each individual asset/tenant within the investment portfolio by rent quarters.

(j) To be notified of any potential arrears and issues being faced by individual tenants (including taking decisions on tenant requests to change from quarterly to monthly payments or rent deferment requests) where the rental income exceeds £100,000pa and to be advised of steps being taken by officers to mitigate that risk.

(k) To receive quarterly reports on the Investment Sinking Funds and to be notified of any change of adverse impact and mitigation measures which are being taken to address.

(l) To receive notification of and authorize any non-budgeted capital expenditure or any capital expenditure over £50,000. on the investment portfolio.

(m) To approve, the settlement of rent reviews, lease renewals or lease re-structuring negotiations in respect of the Investment assets where officer/member delegation financial limits are exceeded.

(n) To review, advise on and approve formal reporting of the investment portfolio to CPRC and/or full council to include Asset Investment Strategies, Business Plans, Key Performance Indicators, Risk Registers, and half yearly update reports.

(o) To agree the scope of the annual reporting on the Council’s investment and regeneration portfolios with the Assets Team.

4. Frequency

 Monthly day-time meetings. Where meetings are not necessary for lack of business they will be cancelled.