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Report re Graves Tennis and Leisure Centre
EXECUTIVE DIRECTORDEVELOPMENT, ENVIRONMENT AND LEISURE
REPORT TO CABINET
10th October 2007
Graves Tennis and Leisure Centre
1. PURPOSE OF THE REPORT
1.1 To seek approval to dispose of Graves Tennis and Leisure Centre to Win Tennis and to secure its continued operation
2. BACKGROUND
2.1 Win Tennis have approached the Council with a proposal that a replacement 25m swimming pool and the continuation of the pay and play tennis facility. Although Win tennis were not part of the previous tendering exercise, the proposals for the provision of these facilities is in line with the Council’s aspirations.
2.2 Given the previous experience, approval is now sought to negotiate with Win Tennis and if the principle terms and conditions outlined in this report are met to dispose of the site to Win Tennis by way of a 125yr lease.
3. Win Tennis Proposal
3.1 Win Tennis are a relatively new comer to the market, their background is in tennis development rather than facilities management however they have operated the tennis element of Bisham Abbey for Sport England/the Lawn Tennis Association for the last year and also operated under contract the tennis centre at High Wycombe.
3.2 Their vision is for “High Performance” centres and they see Sheffield as the logical location for a centre covering the Midlands and the North. A high performance centre would be a focus for training future squads and individual players at national and international level. It would have to incorporate residential temporary living accommodation for athletes, teaching accommodation and playing accommodation but would be open to a wider range of customers than just the performance centre students.
3.3 The proposed development would be phased with the first phase being the replacement of the existing pool adjacent to the existing indoor tennis courts. The pool would be a public access facility and would eventually run at reducing subsidy level. In essence, it would be a new swimming pool for the community.
3.4 Further phases would include an enlarged fitness facility, catering and dry side developments as well as an increase in the number of indoor courts and the establishment of some “clay” courts outdoors, possibly with a removable roofing system. Incorporated into the building would be a residential block for students. Elements of the site are likely to run on a membership basis.
3.5 Given the lack of track record there is a need to progress this project in a way that protects the current facility until certainty is delivered. A memorandum of understanding followed by an agreement to lease including conditions on the completion of the proposed works provides the protection the Council requires while enabling Win Tennis to progress their own funding and development options.
3.6 As part of the discussions that have taken place, the Draft Heads of terms attached as Appendix 1 to this report have been tabled. These have been broadly accepted and while further detailed negotiations are necessary will form the basis for any set of agreements that are put in place.
3.7 If Cabinet are in agreement it is proposed to issuing a without prejudice memorandum of understanding, the final content of which will be agreed with the Assistant Chief Executive Legal and Governance. This will however, indicate that the Council are prepared to dispose of the Graves Tennis Site by way of 125 year lease to Win Tennis subject to the following qualifications:[a] that within 4 weeks from the date of the letter Win Tennis will submit to the Planning Authority a planning application acceptable to the Executive Director Development Environment and Leisure based on the current discussions with officers from Culture Services and the Planning Department;[b] that the Company will use their reasonable endeavours to ensure that Planning approval is obtained within 13 weeks of submission and that theCouncil will use reasonable endeavours to determine planning application within 13 weeks assuming full details and information supplied at outset;[c] that the Council and the Company will use their reasonable endeavours to enter into all necessary legal documentation facilitating the disposal and future operation of the site within 8 weeks following the receipt of Planning Permission; and[d] that the company shall within 18 weeks of the execution of legal documentation commence works to the satisfaction of the Council and in strict compliance with the legal documentation entered into."
3.8 This will not be a binding contract and will be clearly expressed as such, but such a letter should give confidence to the financial institutions backing Win Tennis.
3.9 Under the potential deal Win Tennis would build a replacement pool at an estimated cost of £2.5m, the pool to be operated as a public access facility at reducing cost to the Council, public access to improved fitness and tennis facilities would also be ensured. In return Win Tennis would be taking over a site valued at £2.65m in 2004 with a restrictive covenant on it ensuring that it had to be retained for Leisure purposes.
4. CONSULTATION
4.1 The proposed development is similar in nature to the previous proposal that was extensively consulted on through public meetings and through the Area Panel. Any firm proposals will be taken to the South Area Panel for consultation.
5. LEGAL IMPLICATIONS
5.1 The legal requirements under the British Tennis Foundation original funding agreement re the development of the Graves Tennis Centre will be protected.
6. FINANCIAL IMPLICATIONS
6.1 There is no financial saving to the council in 2007/08 or 2008/09 however potentially this proposal will save the Council in the region of £543k pa in future years. Appendix 1 indicates the proposal by which the subsidy provided will be reduced by 10% for the first 6 months following completion and commissioning of the new pool and then by a further 10% for the following 18 months to allow for the further development of the site. The Subsidy will terminate at this point.
7. PROPERTY IMPLICATIONS
7.1 The disposal of this property will reduce the long term call on the Council’s capital budget.
8. EQUAL OPPORTUNITIES IMPLICATIONS (incl. Equalities Impact Study where required)
8.1 Win Tennis will be asked to produce an equal opportunities policy as part of the transfer and while public access is protected there should be no equal opportunities implications from any disposal.
9. HUMAN RIGHTS IMPLICATIONS
9.1 There are no Human Rights implications from this report.
10. ENVIRONMENTAL SUSTAINABILITY
10.1 The current swimming pool building is not as energy efficient as a new building would be and Win Tennis have given an undertaking to be environmentally responsible.
11. COMMUNITY SAFETY IMPLICATIONS
11.1 There are no Community Safety implications from this report.
12. AREA PANEL IMPLICATIONS
12.1 The South Area Panel will be consulted in advance of this report being presented to Cabinet.
13. CONCLUSIONS
13.1 The potential benefits from the disposal of Graves Tennis and Leisure Centre to Win Tennis are significant. As such every effort should be made to achieve the disposal. The issue of a letter of intent, backed by the Cabinet minute does not commit the Council should Win Tennis be unable to deliver their elements, the proposed safeguards are included for that purpose.
14 RECOMMENDATIONS
14.1 The Cabinet are recommended to:(a) That the Cabinet agree in principal to the disposal of Graves Tennis and Leisure Centre to Win Tennis(b) That the Director of Culture in consultation with the Assistant Chief Executive, Legal and Governance, be authorised to sign a memorandum of understanding subject to the conditions itemised in para 3.7 of this report.(c) That the Director of Culture in consultation with the Assistant Chief Executive Legal and Governance and the Deputy Director of Finance be authorised to enter into all necessary legal documentation to facilitate the disposal of the Graves Tennis and Leisure Centre to Win Tennis in accordance with the matters detailed in this report and in consultation with the Cabinet Member for economic Regeneration, culture and Planning.
John Mothersole
Executive Director
Development, Environment & Leisure
September 2007 date
Appendix 1
Draft Head of Terms
Graves Tennis and Leisure Centre
Win Tennis Limited
The draft Head of Terms below will form the basis for the formal lease, funding, management and services agreements between Sheffield City Council and Win Tennis Limited, such agreements to be completed when Win Tennis obtain full planning permission for the proposed development of the site.
Outline of proposal:
Win Tennis are interested in developing a centre of excellence at national and international level for tennis at Graves, the Council are committed to the preservation of public access swimming in particular and public access recreational sport and exercise in general on the site. The proposal therefore is that the development will include the re-provision of a public access pool, the provision of public access indoor and outdoor sport and exercise including but not limited to tennis and the development of the site to both produce a income earning element based around fitness provision and the “academy” style centre of excellence for Tennis.
As part of this development process it is recognised that there will be a period while the new public access pool is being constructed when the existing pool will have to be maintained. Therefore the agreements will have to include both a Management Agreement to avoid having two management companies operating on the site and a Funding Agreement to cover this period and potentially tapering off beyond that period in order to allow for business development of the new facilities.
Site:
· The site to be transferred is outlined in red [the darker boundary on B&W copies] on the attached plan (Appendix 2). The existing pool, sports hall and ex-youth club building, outlined in blue, are not to be included. As a separate exercise it may be that a land swap with the college is arranged to rationalise the site, swapping the areas marked in green which are currently used as college car parking and a demolished caretakers house, for the area occupied by the pool, sport hall and ex-youth club. Should this be achieved an amendment to the lease would be proposed.
Lease:
· The term of the lease : 125 years
· The rent payable: a Peppercorn pa if requested
· Should the development of the public access facilities not be completed within 2 years of the granting of planning approval the lease would be terminated and the site returned to the Council.
· The re-provided public access facilities will include as a minimum a swimming pool, at least 25m by 11m fully DDA compliant with associated changing accommodation.
· Should Win Tennis be declared bankrupt the site and public operation would revert to the Council free of any liability.
· Should Win Tennis wish to sell the site on the Services Agreement would have to be honoured by the new lessee.
· The site should be available for up to 25 days per annum for city events purposes subject to adequate notice being given by the council
· There is a need to facilitate the presence of the Cycle Speedway on the site. This can either be at their existing location or a contribution to a relocation within the overall site.
Sevices Agreement
This agreement specifies the minimum level of public access, including sports development, activity to be maintained on the site during the Lease period
· To manage and promote the centre as a public access sport and leisure centre.
· To provide 18.5 hrs swimming lessons pw (pool hours)
· To provide 37.5 hrs public access swimming pw, a balanced programme to maximise access by all groups during the week.
· To provide 9 hrs for club and private hire of the public access pool pw at similar time to those currently provided
· To provide up to 13 hrs pw of pool space for the school swimming lessons during school curriculum time (term time only).
· To comply with LTA requirement for the ITI centre funding
· To maintain and let the grass pitches and provide associated changing facilities.
· To honour the Council’s Slice card or its successors.
· To maintain the Quest award for the site.
· To provide performance data for the public access facilities on a quarterly and annual basis. (As per attached outline and subject to amendment from time to time as national monitoring and benchmark data sets are amended)
Management Agreement
This agreement covers the period while the re-provided pool is under construction and commissioning, the agreement will then fall away.
· To provide appropriate management and staffing for the continued operation of the existing pool and sports hall operating as a minimum to the existing programme during the construction of the new pool. (programme for each season from 2006/07 to be attached)
· Comply with all H&S requirements for the operation of the site and specifically in line with the guidance contained in the HSE document HSG179, Managing Health and safety in Swimming Pools.
· Report any defects that impact on the operation or the safety of the site as a matter of urgency to the authorised officer in Activity Sheffield.
Funding Agreement
The funding agreement is also intended to fall away after the development of the re-provided facilities but there is an allowance to be made to reflect the business development post construction.
· Funding will be provided at the level that would have been provided to the operation if run in house between the date of the completion of the lease and the agreed date for the completion of the re-provided pool. (It is important to note the wording here, the funding will not be at the existing level since the payments for the funding of the fitness studio, both lease charge and income share are due to terminate in February 2009 and the repayments for the Studio will also terminate in March 2009. These capital financing agreements can not be passported on to another provider and therefore in the interim period, until completed, will have to be paid by the City Council. [A separate negotiation will be needed around the income share element.] As such they should not be included in the existing operating costs that will form the basis of the subsidy. All other costs and income will be included.
· On completion and commissioning of the pool the agreed subsidy will reduce by 10% for the following 6 months and then by a further 10% for the following 18 months to allow for the further development of the site. The Subsidy will terminate at this point.
· Ongoing payment will be made for school swimming at the rate specified by Sheffield City Council, agreed annually in advance of the academic year by the Swimming Development section of Activity Sheffield, and for any hire of facilities including for events etc.
· In addition there will be a subsidy equivalent to the difference between the standard rate and the slice card rate paid for each usage of slice card.
In all the agreements there will be the facility to collapse them if the development does not proceed following the granting of the planning approval or if one of the agreements is terminated for any reason other than its natural demise then all should fall.
Performance Data Requirement
As part of its performance monitoring role across the City, the Council is charged with monitoring physical activity rates. It therefore requires access to attendance data on a quarterly basis as outlined below, all data where possible to be analysed by gender, age, ethnicity and slice card holders. (Analysis can be based on samples where original data is difficult to obtain)
Swimming
Casual swimming
Lane swimming
Swimming lessons
Aquababes (or equivalent)
Aqua-arobics
Schools
Clubs
Private hire (No. of events and participants)
Tennis
Casual Tennis indoor
Casual Tennis outdoor
Short Tennis
Tennis Development Scheme
Competition (No. of events and competitors)
Other indoor activities
5-A-Side
Basketball
Badminton
Activity sessions
Other.
Other outdoor activities
Football
Rugby
Hockey
Appendix 2
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