Cabinet:

1.       Approved the Mercury Land Holdings Limited Business Plan 2019/20 attached at exempt Appendix 2 of the report.

2.       Agreed to delegate authority to the Leader of the Council, after consultation with the s151 Officer, the Director of Regeneration Programme Delivery and the Director of Legal and Governance, approves the detailed business cases and related viability assessments and funding requirement for the individual schemes noted within the Business Plan as they may be presented during the business plan period in order to enable them to proceed.

3.       Agreed in principle to provide total capital funding to MLH up to a maximum of £135.85 million in respect of projects contained in exempt Appendix 2 through a combination of equity investment and state aid compliant loans subject to detailed approved business cases made under delegated authority in recommendation 2 above.

4.       Agreed to delegate authority to the S151 Officer to agree, after consultation with the Director of Legal and Governance, the completion of all relevant agreements and appointments of relevant professionals relating to the provision of debt finance by the Council to MLH. 

5.       Agreed to delegate to the sS151 Officer, following consultation with the Director of Asset Management, and the Director of Legal and Governance, the authority to determine the principles and processes by which any assets shall be disposed of and the terms of disposal to MLH.

Cllr Roger Ramsey presented the report to Cabinet detailing the Mercury Land Holdings (MLH) Business Plan and Budget Update.  MLH was established in November, 2015 with the Council acting as both shareholder and funder.  The Council’s objectives for setting up the company were to generate an acceptable return for the Council by operating a business.  This return is included within the MTFS report before Cabinet.

The Company seeks to create a diverse housing supply in the Borough focusing mainly on high quality private rented sector accommodation delivery and where possible help to facilitate high quality development on regeneration sites.

MLH has been operating successfully for a number of years and has delivered against its previous business plan.  This included the ongoing management of Cathedral Court, with all 65 units currently let and North Street in Hornchurch currently being constructed and due for completion in September, 2019.

The report before Cabinet constitutes the annual update of the company’s activity and a review of the plans, future financial projections and funding requirements for 2019/20.

The MLH Business Plan for 2019/20 anticipates ongoing management of its current portfolio and further expansion through the development and acquisition of sites which are outlined in the reports.  This will include direct development as well as the acquisition of properties from the Council’s joint ventures to expand the Private Rented Sector (PRS) portfolio and some properties for sale.

It is recommended in the report to expand the schemes MLH are concerned with to increase from 3 to 6 and the total number of units delivered will increase from 109 to 328. Not including those to be delivered for private sale.  There is also the inclusion of a reactive acquisition fund to enable development opportunities to be pursued in order to maximise opportunities that may be presented directly to MLH by the market.

There followed discussion which included a period in closed session.

Cabinet:

1.       Approved the Mercury Land Holdings Limited Business Plan 2019/20 attached at exempt Appendix 2 of the report.

2.       Agreed to delegate authority to the Leader of the Council, after consultation with the s151 Officer, the Director of Regeneration Programme Delivery and the Director of Legal and Governance, approves the detailed business cases and related viability assessments and funding requirement for the individual schemes noted within the Business Plan as they may be presented during the business plan period in order to enable them to proceed.

3.       Agreed in principle to provide total capital funding to MLH up to a maximum of £135.85 million in respect of projects contained in exempt Appendix 2 through a combination of equity investment and state aid compliant loans subject to detailed approved business cases made under delegated authority in recommendation 2 above.

4.       Agreed to delegate authority to the S151 Officer to agree, after consultation with the Director of Legal and Governance, the completion of all relevant agreements and appointments of relevant professionals relating to the provision of debt finance by the Council to MLH. 

5.       Agreed to delegate to the sS151 Officer, following consultation with the Director of Asset Management, and the Director of Legal and Governance, the authority to determine the principles and processes by which any assets shall be disposed of and the terms of disposal to MLH.