deferred receipt mechanisms long lease seminar edinburgh 1 june 2010
TRANSCRIPT
Deferred Receipt MechanismsLong Lease Seminar
Edinburgh1 June 2010
Deferred Receipt MechanismsLong Lease Seminar
Welcome & introductionPatrick Flynn, Scottish Government
Deferred Receipt MechanismsLong Lease Seminar
Long Leases best value, best practice, best outcome?
Alasdair Fleming & Roger CottonBrodies LLP
Long Lease Arrangements and their use in unlocking the latent potential or public sector sites
Development Agreements, Licences and
Long Leases - best value, best practice, best outcome?
Alasdair Fleming
Partner
Head of Urban Regeneration
Brodies LLP
Key issues
Hot topic with pre-credit crunch issues in sharper focus:
Land values
Public realm and infrastructure
Sustainability
Profitability
Fundability
Why innovate?
Balance all parties’ interests
Managing risk
Engaging Public and Private sector
Encouraging activity in a difficult market
Maintaining momentum and meeting demand
Developing communities
Models for future development
Development Agreement Standard agreement for whole site; Contains obligation to enter into Lease; May incorporate Licence
Lease – obligation to enter into long lease (175 year) gives Public Sector control over
delivery of public realm works duty on developer to complete site Overage delivers public sector profit
Models for future development
Sublease – gives private sector right to sublet
Allows introduction of consortium partners
Aids site delivery – social housing
Facilitates commercial development
Encourages and facilitates engagement of private sector
Funding
Security Land Value and Long Leases Step-In Sub-Leases Irritancy Protection Agreements
The way forward?
Residential – the route of out of recession?
Maintaining momentum to meet current and future demand
Further application of model - best solution in current climate
Public sector toolkit
Private sector engagement
including Funders?
Developing Communities
Making development agreements and public procurement work together
Roger Cotton
Partner
Projects
Brodies LLP
Key issues
Much higher on the risk register than before:
Competition for limited public sector investment
Public sector striving for best value, and aversion to risk
New remedies/penalties for getting it wrong
Can be a tool for objectors to a scheme
Identifying the interface
When will the procurement rules apply:
Public sector initiative
Public sector land
Public sector investment
Public infrastructure and public realm
Public sector specification
Steering round the procurement rules
Truly ancillary to a land deal
No obligation to develop
Planning powers only
No public sector contribution or risk
....but watch out for the courts developing the law
Embracing procurement!
Needs to be an early call
There can be no choice but to comply
The process can be streamlined for developers and authorities
Procurement is not an “add-on” – it is at the core
Using competitive dialogue effectively
Since its introduction in 2006, the Competitive Dialogue procedure has received a mixed response: caution in the face of growing costs, yet recognition of the efficiencies gained. Early planning and preparation govern the success of the procedure. If it is run effectively and efficiently, it has the potential to have a positive impact and ensure benefits can be realised by both parties.
The PPP Journal
Using competitive dialogue effectively
Prepare and work with a good set of documents
Avoid “dialogue drift”
Coordinate the different strands of dialogue
Use the freedom of dialogue phase without rushing to final tenders
Deferred Receipt MechanismsLong Lease Seminar
Panel discussion
Deferred Receipt MechanismsLong Lease Seminar
Summary & closing remarks
Deferred Receipt MechanismsLong Lease Seminar
Lunch