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					LONDON BOROUGH OF CAMDEN                                             WARDS: Kings Cross and
                                                                     Whole Borough
The Next Phases of the Camden Property Strategy (FIN/2008/21)

Director of Finance
FOR SUBMISSION TO:                                                   DATE:

Resources and Corporate Performance Scrutiny Committee               24th June 2008
The Executive                                                        25th June 2008

This report considers the Camden Property Strategy programme to achieve a fit for purpose
portfolio, improvements to customer services, reductions to on-going costs of accommodation and
the creation of sustainable efficient high quality buildings to serve the Borough’s customers in the
longer term.
The report seeks Executive approval to the next stages of the Camden property strategy including
an asset area review programme and further improvement of the Council’s office accommodation
and services to the public at Kings Cross.
Local Government Act 1972 – Access to Information
No Documents that require listing have been used in the preparation of this report.
Contact Officer:
               David Tullis
               Assistant Director Finance & Head of Property Services
               Room 204e, 2nd Floor
               Argyle Street Extension
Telephone:    020 7974-1604
1.  Members of the Resources and Corporate Performance Scrutiny Committee are asked to
    note the contents of this report and make comments upon the proposals.
2.    Members of the Executive are asked to approve the:-
2.1   Principles of the Camden Property Strategy.
2.2   Area review programme as defined in Section 4 of this report.
2.3   Preparation of a full scheme and submission by the Head of Property Services of a
      planning application for the conversion of the Camden Centre to provide a customer
      access centre and staff accommodation as referred to at paragraph 6.4.
2.4   Marketing of the Town Hall Extension building to identify a potential development partner.
2.5   Addition to the capital programme of the capital schemes identified in 12.2
2.6   Presentation of a further report back to the Executive with a financial appraisal in regard to
      the Town Hall Extension and the Camden Centre proposals.

  Signed:                                                Date:
                David Tullis


1.     The Council has a strong Corporate Asset Management planning base having
       achieved the top score in the Central Government assessment under the
       category - Use of Resources. There are always opportunities to further improve
       and this report seeks to update the principles of the Corporate Property
       Strategy, to confirm the importance of the portfolio in supporting delivery of the
       Council’s services and to suggest a revised strategy for the on-going review of
       property performance. The report also proposes the next phases of the Kings
       Cross Office accommodation strategy to improve efficiency, economic life and
       provide clear modern access to services for the Borough’s citizens.

2.     The Principles of the Camden Property Strategy

2.1    The Council owns a significant portfolio of land and buildings. The portfolio has
       undergone change over recent years, including rationalisation, disposal and
       review initiatives. An action plan is now proposed to realign the programme in
       response to the current requirements of:

             (a)    the Council’s Corporate Plan priorities;
             (b)    Camden’s sustainable Community Strategy 2007-2012;
             (c)    the Customer Services Transformation Programme (with emphasis on
                    the physical access strategy);
             (d)    the flexible working programme.

       This will have particular focus upon:-

                  higher performance civic accommodation;
                  review of under-performing assets;
                  capital receipts for reinvestment in the Council’s priorities.

2.2    The Property Strategy will be developed to:

             a) provide service buildings fit for purpose
             b) achieve joined-up inter-related services in single locations
             c) enable sufficiency, suitability and condition to meet service needs.

2.3    Over the course of five years the intention is to improve the public-facing
       portfolio and dispose of the older or inappropriate premises to realise capital
       receipts. The Council can continue to achieve reduced stock of higher quality
       and repair condition to address the problems identified in the condition surveys
       where expenditure needs exceed currently identified resources.

2.4    The Property Strategy identifies the need for a comprehensive asset review
       programme which is informed by projected departmental service need in the
       medium to longer term and work with the Council’s partners.

2.5    It is proposed to undertake further rationalisation and improvement to the office
       portfolio, including a uniform facilities management policy across all buildings,
       with corporate arrangements including purchasing of office support services,
       fire, health and safety evacuation arrangements, plus driving a policy to reduce
       overall floor space while increasing capacity. This will include a continued
      programme for reducing the number of leased-in or expensive to run buildings
      with rent and or high revenue implications.

2.6   The (Property Strategy) programme will involve coverage of all the Council’s
      property holdings through a combination of office accommodation, departmental
      service and geographical area reviews. The key measures of the property
      strategy are:

         Maximum customer access
         Value for money.
         Significant service improvement.
         Satisfactory return on investment

2.7   The Property Strategy will, over the period of the review, look at all Council
      property with the exception of schools and HRA residential properties (land
      adjoining residential dwellings should be included).

      The strategy is being developed in response to:

         The recognition that the tenure, use “accessibility” and location of buildings
          are defined to meet the service requirements of the community;
         The use and location of buildings makes a significant contribution to the
          Council’s corporate priorities;
         The need for high performance, value for money, sustainable civic
         The desire to review, re-use, refurbish, or dispose of under-performing
         The requirement to generate capital receipts for reinvestment in agreed

3.    The Review Programme

      Corporate Office Accommodation

3.1   The Executive on 30th January 2008 approved the phased exit from Clifton
      House commencing with the 4th, 5th and 6th floors which will be moving to a
      combination of Arlington Depot (Jamestown Road), the Roy Shaw Centre and
      the Medburn Centre. The services at the Medburn Centre will migrate to
      Bidborough House once complete, thereby vacating the space for the Building
      Schools for the Future programme. The consolidation of Housing Renewals
      teams with contractor partners is now reaching an advanced stage. The 4 th, 5th
      and 6th floor will be vacated by September 2008. Space will need to be
      identified for the 2nd and 3rd floors as this space is due to be vacated during
      2009/2011. The programme will continue to challenge the effectiveness of the
      estate across the whole Borough and establish best value use of resources.
      Plans will be worked up to vacate further leasehold premises as the
      opportunities arise. It is also envisaged that recommendations will be made to
      improve public access to Council services with options, and opportunities
      identified as part of the proposed area reviews. (Paragraph 4 below refers.)

      Service Departmental Reviews

3.2   The Service Review looks at provision specific to individual service areas and
      how this is reflected through the Property Portfolio. It includes analysis of the
      immediate position and opportunities for enhancement and improvement set
      against projected service plan needs/expectations. Service Departmental
      reviews again seek to link areas of local need to the corporate accommodation
      strategy. This programme has been in place for a number of years and will
      continue in close liaison with the progress of area and corporate office reviews.

      Area Review

3.3   This involves linking parts of the Borough into geographic clusters and reviewing
      the Council’s property portfolio base. The area review programme requires a
      cross-Council assessment of need within the context of the Council’s priorities. It
      is vital that it is linked closely with the service plan vision on property-related
      requirements. The next section covers this part of the programme.

4.    The Area Review

      The Concept and Objectives

4.1   This involves the review of portfolio holdings across a geographical area to
      assess against a defined set of objectives and outcomes. The process seeks to
      identify action plans to deliver and/or support: -

         The Community Strategy and the Corporate Plan;
         The customer access strategy;
         The flexible working and corporate accommodation strategy;
         Property development opportunities;
         Rationalisation and repair;
         Realising capital receipts;
         Improvements to service provision;
         Affordable housing;
         Under-performing sites and properties;
         Partnership working to achieve common objectives;
         Sharing, rationalisation and improvement of buildings used for voluntary and
          community purposes;
         A modern “fit for purpose” portfolio.

4.2   The key stages are data collection, field work inspections, options appraisal, and
      consultation, followed by implementation of the agreed action plan. An area
      review is likely to take 12 months from launch to implementation stage. (Interim
      actions are also enabled throughout the period of the Review.)

4.3   An area review programme is one shared across the Authority in terms of cross
      working and should address all corporate issues as related to Property and land
      provision. It is important that the review has linkage with other programmes
      such as place shaping, residential estate regeneration, housing infill sites, BSF
      and the Adult Social Care programme. In addition the customer transformation
      strategy including access points and community use of buildings (including
      Tenants meeting halls and Community Centres) are key factors in the review

      A Borough Wide Programme

4.4   A programme of area reviews would enable a corporate approach to the use of
      land and buildings linked to the objectives as outlined in 4.1 above. There would
      be many opportunities for joint-working between services with partners from
      outside agencies such as the Voluntary Sector, the PCT and the Police.

4.5   A programme of area review for the whole Borough over a five year period
      would be designed to encompass future service needs, the customer access
      strategy as well as feeding into the Council’s place shaping agenda. It is
      suggested that the area review plan is configured by radial area from key points
      of Council activity. These clusters will ensure cross-over between neighbouring
      wards, and as shown at Appendix 1 the whole Borough will be covered during a
      five-year timetable. It is proposed that the precise sequence of reviews is
      decided by the Head of Property Services and endorsed by the Executive
      Member for Resources upon various criteria including:

         The Council’s Corporate Plan priorities
         The Council’s sustainable Community strategy priorities
         Known Local Issues
         Hubs of Council Service Provision (Public Access)
         Likely Quick Wins
         Identified Areas requiring urgent action
         Areas where the property portfolio has deteriorated and is comparatively in
          need of investment/reorganisation
         Customer access strategy opportunities
         Place-shaping agenda priorities.

      These examples of the criteria need to be balanced with the need for flexibility to
      change the boundaries of a specific review area as circumstances define.

      Voluntary & Community Sector and Residents’ Association Lettings

4.6   An element of this portfolio is in poor condition and may offer opportunities for
      rationalisation projects to effect improvements and the joining up of different
      provision into more fit for purpose accommodation. It is proposed as part of the
      area review programme to include these assets as part of the stock take and
      evaluation / option analysis. In addition, if proposals come forward as part of the
      asset transfer policy, which was agreed in principle at Executive in October, then
      these will be taken forward as individual projects.

4.7   The early consultation and involvement of users and residents will be a
      prerequisite for the consideration of any community asset.

5.    The Kings Cross Campus


5.1   The Council owns or leases a number of assets which may be grouped
      together as office accommodation, civic facilities and the public-facing
      customer services. The portfolio at Kings Cross includes a number of these
      linked assets and this year Members have already approved major changes.

5.2   The programme for Clifton House in 2008 involves the movement of over
      500 staff and is a major driver to change in ways of working.

5.3   New locations have been identified for the 6th, 5th and 4th floors and the
      moves are underway. New locations are required for 2 nd and 3rd floors
      within the Council’s retained portfolio. In addition the future programme to
      rationalise other parts of the property portfolio will similarly rely upon
      improved space capacity and flexible working.

5.4   Vacating the property, given the current rental levels in Kings Cross, will
      also save the Council, in future years, over £2 million per annum in rent and
      rates (if the leases were renewed).

5.5   The Old Town Hall and the Town Hall Extension are key parts of the
      Council’s ownership in Kings Cross. Both properties require replacement of
      the old mechanical and electrical installations, upgrade of services and
      building fabric at a current estimated cost significantly in excess of £20m. In
      addition parts of the buildings are used less effectively than they might be. It
      is therefore proposed to move towards a long-term solution, involving
      consolidating the Old Town Hall into predominantly office accommodation
      and civic space with all the public-facing reception services (including those
      currently within the Town Hall Extension) and further office space
      centralised to the Camden Centre.           It is also proposed to seek a
      development partner to remodel or rebuild the Town Hall Extension.

6     The Proposals

      Old Town Hall

6.1   The Old Town Hall is currently laid out as a combination of the Post Room and
      public-facing customer services on the ground floor with civic accommodation at
      first and staff offices on the second and third floors. The arrangements do not
      make best use of space and the customer access points are separated from
      other services providing similar direct access elsewhere in the Kings Cross
      Complex. The space on ground, second and third floors is not used to
      maximum effect and there exists a repair and maintenance liability especially in
      regard to replacement of the mechanical and electrical installations. The
      immediate foyer / reception to the Old Town Hall is not considered customer-

6.2   It is proposed to remodel the Ground floor reception area locating the reception
      desk to immediately behind the front doors of the building in a glass pod opening
      up the reception hall and the staircase leading to the first floor Civic space. This

      work will be undertaken during 2008/2009 funded from the accommodation
      improvements budget.

6.3   It is also proposed to look at the feasibility of moving front line services to the
      Camden Centre. The Post Room is also to be located to the Basement with a
      separate service access point from Bidborough Street. The Ground floor then to
      be remodelled as additional staff accommodation .The First floor to remain
      predominately as laid out with the Second and Third floor remodelled as
      necessary to effect space efficiency. Proposals for this wider scheme will be
      reported back to the Executive for decision, following appraisal.

      Camden Centre

6.4   The Camden Centre (a Grade II listed building) is in a poor condition of repair
      and decorative order, is under utilised and provides the opportunity for
      conversion. This building has potential for much more effective Council use.

      The proposal is to convert to four floors of accommodation within the existing
      building envelope and the re-constituted space to include a multi-purpose
      customer centre at the Ground floor with direct street level access from the
      Euston Road. The Ground floor could accommodate all the reception services
      currently provided at Kings Cross from a single location providing clear and easy
      access at one point to Council Services in quality accommodation. Space at
      basement, first and second floor could also be included within the scheme
      providing much needed flexible office space to accommodate staff decant from
      the Town Hall Extension and part of the requirements for the Clifton House
      second and third floors.

      Officers will report back as part of the financial assessment report
      (recommendation 2.6 refers) with an analysis of any community impacts of the

      Town Hall Extension

6.5   The Town Hall Extension built in the 1970s is not laid out internally in the most
      efficient way and requires significant investment in replacement of the
      mechanical and electrical installations. The property suffers as a result and is
      perhaps not the most appropriate design as a key landmark building within the
      Kings Cross locality. The Mechanical and Electrical installations have already
      exceeded their expected life and are in urgent need of replacement. This will
      necessitate vacating approximately half of the building at a time in two stages to
      effect the work. The work is also expected to cost over £12.5m plus decant
      costs and fees, which could in total exceed £20m.

      A first stage options appraisal has been undertaken and this identifies three
      alternative solutions to this:-

      6.5.1 Rolling Refurbishment

             This involves refurbishing the building in phases including replacement of
             the M&E and improvements to space utilisation. This option would
             necessitate decant from the building in phases whilst the work is
             undertaken. There would be a requirement for additional space to house

              services and staff during the refurbishment period and the costs would be
              similar to those reported in 6.5 above.

      6.5.2   Disposals and Single Move

              This requires the Council to identify alternative accommodation either for
              Lease or for Freehold acquisition and the sale of the Town Hall Extension
              free of any Council reprovision requirement.

      6.5.3 Conditional Part Disposal

              This involves seeking a commercial development partner to either
              remodel or rebuild with reprovision free of charge back to the Council of
              the lower floors with Commercial/Residential uses over. The new
              accommodation to be defined by a quality modern brief to create a highly
              efficient and sustainable building. This may net the Council a capital
              receipt and should provide quality accommodation to the Council’s

      The Preliminary Conclusions

6.6   Options 1: Rolling Refurbishment is considered too expensive as a part solution
      to the Council and Option 2: Disposal and Single Move will not leave sufficient
      space at Kings Cross to support the services currently provided. Option 3: part
      Disposal allows the Council, following a decant and relocation process, space
      within the new development which can be linked to the Camden Centre and the
      Old Town Hall for continuity of Service provision. The development partner may
      be able to assist with decant and the other options involve major disruption in
      any event. All the current receptions could move to a converted Camden Centre
      with staff space as well. The remainder might move to the Old Town Hall
      Ground floor or other Council premises as required. On completion of the
      rebuild of the Town Hall Extension, Services could be relocated back into the
      lower floors of the space in a sustainable new building that will be constructed
      for efficient ongoing use and low revenue costs and the Council will occupy on a
      basis of a long lease at “peppercorn rent”.

6.7   To date the Council’s advisors CBRE have gauged the market appetite for this
      opportunity and confirm that there exists a specific demand for this type of
      partnership and a good level of interest to support taking the project to the next
      stage. Some preliminary work has also been undertaken to test the floor space
      requirements in a re-developed building and this demonstrates that the Council
      could take two or possibly three floors, whilst also obtaining a captial receipt.

6.8   It is now proposed to explore a project brief-based on Option 3 via a market
      testing exercise. This will detail the vision for the site, allow presale due
      diligence work and ensure wide coverage within the market to identify a suitable
      partner. A conditional contract will allow the Council to programme this part of its
      overall works strategy for Kings Cross so that Camden Centre and the Old Town
      Hall can be remodelled in advance of start on site for the Town Hall Extension.

      It is proposed to engage consultants to manage the market testing and selection
      of a project partner. CBRE have advised the Council in the past upon Council
      holdings in Kings Cross and they would provide continuity to the process. They

       are also market leaders in enabling this development partnership model. This
       appointment is subject to review by the Corporate Procurement Team to ensure
       compliance with EU procurement requirements and regulations.

       Security and reception services

6.9    The inclusion of the glass reception pod to the front of the Old Town Hall and the
       transfer of the main customer services to Camden Centre will enable a revised
       security system requiring badged entry, appointments and visitors cards to
       access the Old Town Hall space. A full analysis of reception and security
       requirements will be undertaken in accordance with the proposed new
       arrangements set out in this report.

       Denis Geffen Annex

6.10   Denis Geffen Annex is located at Camley Street, in St Pancras and Somers
       Town Ward and is currently underused and in relatively poor mechanical,
       electrical and decorative order. It is proposed to refurbish and provide bespoke
       space for the Council’s emergency planning and business continuity teams.
       This will separate the service from other Council activities which is considered
       important in the case of response to an incident or emergency. The space can
       also provide one of the key locations for the Street Wardens’ service.

6.11   This follows the principles of the Council’s property strategy by bringing back
       into use a Council freehold building and will free up space within other buildings.

       Work is also to be undertaken to assess opportunities to vacate further
       leasehold buildings.

       Crowndale Centre

6.12   The Crowndale Centre, next phases, will form part of the area review
       programme and will be considered in the light of other Council services in the
       area to identify options for further improvement, both in opening up the building
       and improving reception services and reanalysing space allocation. This will be
       assessed within the context of the Council’s other portfolio provision in the
       review area. Design work is also in hand to improve ventilation to the building,
       with initial funding requirements identified at paragraph 12.

       Other Corporate property

6.13   Other accommodation is also under review and there will be opportunities to
       rationalise occupancy and move some Council services to the Town Hall to
       space, in part freed up by the proposals in this report. This may generate
       potential for new capital receipts.

7.     Flexible working and Customer Transformation Strategy

7.1    The consolidation of customer receptions to a single location in Kings Cross will
       provide clearer arrangements for citizens seeking access to Council services.
       The single access will allow multi-functional service receptions effective use of
       space and will facilitate customers accessing a wide range of services from a
       single location. The precise layout of the service area is to be defined by the

      brief and it is expected that the space could accommodate Cashiers, Registrars’
      reception, Housing options, Revenues and Benefits, Planning, Building Control
      and Housing advice within the single location. The multi-functional access centre
      will require detailed planning and represents significant challenges for the
      Council over the coming period.

7.2   The flexible working strategy is being rolled out to Council premises and is
      providing effective means by which to manage space to its maximum efficiency
      thereby reducing the costs of Civic accommodation and space needs. This has
      to date involved a large part of the Council in significant change processes and
      the management of the programme set out in this paper will require an
      intensification of this good practice and positive contribution from service
      departmental areas. Their work has been enabled by new technology solutions
      that have been tried and tested and make working flexibly at any desk
      (anywhere) much easier. As the programme intensifies the Council will need to
      continue the investment in this enabling technology.

8.    The Preliminary Timetable

       1.    Launch of Area Review First Phase                 July 08
       2.    Town Hall Extension soft marketing                July/Nov 08
       3.    Camden Centre scheme preparation and              Summer 08 – Jan. 09
             planning application
       4.    Report to Executive on full financial appraisal   Spring 09
             and recommendations
       5.    Town Hall extension conditional contract /        Jan 09 – Dec 09
             planning application
       6.    Conversion and occupation of Denis Geffen         March/April 09
       7.    Area Review first year results /                  June/July 09
             recommendations+ 2nd yr start
       8.    Implementation, 1st year area review              July 09 – on going
       9.    Camden Centre Start on Site                       Sept 09
       10.   Old Town Hall Construction                        Phased 2009 to 2011
       11.   Area Review 3 Year start                          June/July 2010
       12.   Town Hall Extension Decant                        2010/2011
       13.   Camden Centre Completion                          2010/2011
       14.   Area Review 4 Year                                June/July 2011
       15.   Town Hall Extension Completion                    2013

9.     Resourcing

       The Area Review Programme

9.1    It is envisaged that each of the reviews will require additional resource allocation
       to secure the required capacity whilst continuing the existing mainstream
       programme. This programme has the potential to produce significant capital
       and revenue advantage to the Authority. Potential quick wins will be brought
       forward at early stages to ensure short-term only impact upon Council

9.2    Funding to complete the first year of the review is estimated at £350k and it is
       anticipated that potential new receipts in excess of £1.5 million will be identified
       early in the first year review. It is proposed that the initial sum of £350k be
       funded as identified in paragraph 12.

       Kings Cross Strategy

9.3    Marketing for sale of the Town Hall Extension and preparing the full scheme with
       planning application drawings etc. of the Camden Centre and work to the Old
       Town Hall will require up-front funding which may be reimbursed as a result of
       this project and other corporate accommodation reviews. The feasibility
       preparatory and pre-implementation scheme costs will be significant and it is
       proposed that these are similarly funded from the approved revenue budget for
       the accommodation strategy.

       It is envisaged that the project will be self funded through a combination of new
       capital receipts, existing budget allocation and revenue efficiencies. There will
       be a requirement for forward funding to enable the programme, and the
       Executive will receive a further report (as mentioned at recommendation 1.6);
       once the Town Hall Extension marketing is complete.

10.    Communications

10.1   It is proposed to arrange a consultative forum and invite all elected Members to
       explain the concept of area review and seek suggestions upon the process and
       implementation plan.

11.    Conclusion

11.1   This report represents further corporate working to achieve major efficiencies in
       the use of office accommodation and will build upon the significant reductions in
       floor space already identified through Clifton House, 79 Camden Road,
       Bidborough House and other projects. The programme brings forward a major
       modernisation and improvement of the Council’s property holdings. The funding
       requirements will need to be analysed as a result of the marketing exercise but
       the programme will create a portfolio in Kings Cross to last for 50 years without
       major expenditure or investment. The programme will achieve a fit for purpose
       portfolio and a testimony to the Council’s commitment to improving customer
       services, reducing on-going costs of accommodation and creating sustainable
       efficient, high-quality buildings. The programme will also in the short to medium

       term show a capital repayment on investment both through revenue efficiency
       and Capital receipts from major disposals facilitated by the programme.

12.    Comments of the Director of Finance

12.1   This report sets out a number of proposals as part of the Camden property
       strategy. The strategy has a number of components and for the most significant
       elements a further report will be brought back to Executive for consideration and
       approval before the final proposals are implemented. Savings arising from the
       exit strategy from Clifton House have been identified as £0.6m for 2008/09 as
       part of the Better and Cheaper programme and it is envisaged that further
       savings from this and other elements of the strategy will contribute towards
       meeting budget efficiency targets for 2009/10 and 2010/11.

12.2   Capital Schemes

       The capital schemes set out in this report are as follows:-

                                        2008/09  2009/10    Total
           Scheme                          £’000      £’000   £’000
           Denis Geffen Annex                220        280     500
           Crowndale Centre     Air          400          0     400
           Town Hall Entrance                 200           200       400
           Schemes                            820           480      1,300
           Contingency 10%                     80            50        130
           Total allocation                   900           530      1,430

12.3   Revenue Schemes

       The funding requirements for the revenue proposals set out in this report are as

                                        2008/0   2009/10   Total
        Revenue Scheme                     £’000    £’000               £’000
        Area Based Review                    350      350                 700
        Town Hall Extension                  150         0                150
        Camden centre consultancy            500            0            500
                 design and
        Total                              1,000         350           1,350

12.4   The total costs identified to enable these schemes to progress are £1.9m in
       2008/09 and £0.9m in 2009/10 and the funding for these will be met from the
       existing annual accommodation budget of £1.9m, set aside for revenue
       contributions to capital schemes.

12.5   The capital schemes will be added to the capital programme. It is further
       proposed that as the Area based reviews progress the initial call on any receipts
       generated is applied to re-imburse the capital resources used to support the
       reviews, so that the programme for mechanical and engineering work within the
       office portfolio is not adversely affected.

12.6   The proposals concerning the Town Hall extension and the Camden Centre will
       be subject to financial appraisal and a further report to Executive for decision.

13.    Comments of the Head of Legal Services

13.1   The Town Hall complex is held for the Council’s general administrative purposes
       under section 120 of the Local Government Act 1972, which gives the Council
       power to acquire and hold property for any administrative function, or for any
       purpose which is of benefit to the Borough or any part of it. This gives the
       Council flexibility in deciding precisely how it uses different parts of the Town
       Hall complex.

Appendix 1


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