Global Professional Services Network Solutions

1
Regeneration Approval Report 03 January 2009
2
Purpose

• To seek approval of the Board to
• Purchase the site at Sedgemoor Road
• Enter into a building contract with McInerney
  Homes for the construction of 17 homes for rent
• The net borrowing requirement for the development
• The Internal Rate of Return for the project

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Background

• The church building was demolished in August
  2006 redevelopment of the site would contribute
  to the general regeneration of the Norris Green
  area and bring back into use and area that has
  become scrubland.
• The proposed mix of the units to be purchased by
  the association is as follows
• 9 no 3b5p houses _at_ 83.6m2
• 8 no 2b4p houses _at_ 73.0m2
• Works are anticipated to commence before the end
  of the current financial year and to be completed
  within 12 months.
• Cobalt has no Social Housing Grant available to
  facilitate the development.
• LHT has Recycled Capital Grant - a formal request
  to transfer the sum of 935 000 from LHTs RCGF
  pot to Cobalt is to be put to LHTs Board at its
  meeting in February.

4
Risk

• Risk
• Non-performance by the contractor
• Failure of contractor

• Mitigation
• Valuations only for completed or fixed work.
• Levying of Liquidated Ascertained Damages on a
  per unit basis.
• A Dun Bradstreet report will be obtained prior
  to contract signing
• A contingency sum of 2 of the construction cost
  is included within the project cost
• A Performance Bond for 10 of outstanding
  construction cost will be provided by the
  contractor

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Recommendations

• That subject to LHTs Board approving the
  transfer of 935 000 from its Recycled Capital
  Grant Fund to Cobalt, the Board approve
• The appointment of Davis Langdon as Cost
  Consultants, Employers Agent and CDM Co-ordinator
  for the project
• Entering into a contract for the purchase of site
  for the maximum sum of 400 000 Four hundred
  thousand pounds
• Entering into a contract for the construction of
  17 properties with McInerney Homes NW Ltd. in the
  maximum sum of 1 388 000 One million three
  hundred and eighty-eight thousand pounds
• The net borrowing requirement of 997 241 for 17
  general needs units
• The Internal rate of Return of 5.22.