Bas du Mont Flats, Pier Road, St. Helier - sale to the Christians Together in Jsy (CTJ) Housing Trust

STATES OF JERSEY

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BAS DU MONT FLATS, PIER ROAD, ST.  HELIER: SALE TO THE CHRISTIANS TOGETHER IN JERSEY (CTJ) HOUSING TRUST

Lodged au Greffe on 30th September 2003 by the Housing Committee

STATES GREFFE

PROPOSITION

THE STATES are asked to decide whether they are of opinion

( a) to approve the sale of the property known as Bas du Mont Flats, Pier Road, St.  Helier, to the

Christians Together in Jersey Housing Trust for a sum to be agreed by the Finance and Economics Committee, and otherwise on such terms and conditions as may be agreed by the Finance and Economics Committee with the approval of the Housing Committee –

  f o r t h e r e fu r b i sh  m e nt of this site, to provide 3  x  on-ebedroom, 4  x  2-bedroom and 9  x  3-

bedroom flats for social rented accommodation, with associated amenity space;

(b ) to authorise the Attorney General and the Greffier of the States to pass the necessary contracts on

behalf of the public;

(c ) to authorise the Treasurer of the States to receive the agreed sum when it becomes due.

HOUSING COMMITTEE

Notes: 1. A p lanning application has been submitted to the Environment and Public Services Committee. 2 .  T h e Finance and Economics Committee supports the proposition.

REPORT

Introduction

Bas du Mont Flats, Pier Road, St.  Helier were constructed by the Housing Committee in 1952 for social rented housing.

Bas du Mont consists of 16  units of accommodation (one  x  on-ebedroom, 4  x2-bedroom and 11  x  3-bedroom flats). At present 3  flats remain occupied and vacant possession of the entire building is expected at the end of July 2003.

The Housing Committee commissioned Godel Architects to prepare a Feasibility Study for the various options for the redevelopment of this site. The proposed design is an extensive refurbishment of the existing building that focussed on upgrading the existing building fabric with minor internal alterations to ensure that the building meets current standards. A replacement heating system, double-glazed windows, an insulated roofing system, external cladding, internal sound insulation, new bathrooms and kitchens and improved mechanical and electrical systems are included within the works.

This refurbishment will provide 3  x  on-ebedroom, 4 x  2-bedroom and 9  x  3-bedroom flats. Residents will enjoy the benefit of an open amenity space to the rear of the building.

The Property Services Department is currently negotiating the extinguishment of part of a vehicular and pedestrian right of way over Vine Lane, to the rear of the flats, to the benefit of the scheme.

In order that the existing building may be externally clad the Housing Committee requested that a strip of land forming part of the footpath on Pier Road be transferred to its administration from the Environment and Public Services Committee. The appropriate Report and Proposition was brought to the States for their approval and adopted on 9th September 2003 (P.112/2003).

Christians Together in Jersey (CTJ) Housing Trust

The CTJ Housing Trust is an association incorporated under the provisions of the Loi (1862) sur les teneures en fidéicommis et l'incorporation d'associations for the purpose of providing residential accommodation to persons in need.

The Trust presently administers 3  units of social rented accommodation, Nos.  8, 12 and 12A Lemprière Street St.  Helier.

The Trust is keen to expand its portfolio of properties and assist in the provision of social rented accommodation for those persons in the greatest housing need. It is hoped, therefore, that the sale of Bas du Mont will be one of a number of housing sites which the Trust will develop.

The States will be aware, given its approval of previous propositions, that local housing trusts are obliged to sign a legally binding agreement with the Housing Committee in respect of loan subsidy arrangements, maximum rents, nomination rights, tenant consultation and the processing of financial surpluses, in advance of a new law on the regulation of Housing Trusts. The CTJ Housing Trust signed the said interim agreement with the Committee in April 2001.

Furthermore, the contract of sale will include previously agreed clauses which restrict the future use of the site for social rented accommodation and place restrictions on the onward sale of the property.

Funding

The funding for this project will follow the precedent set by other housing trust developments. The CTJ Housing Trust will borrow the capital funds from its bank, to be repaid over a maximum period of 25  years, subject to the necessary Letters of Comfort being issued by the Finance and Economics and Housing Committees. An interest subsidy will be paid by the States to the Trust on any interest paid above 4% over the period of the loan.

The intention is to sell the site for a sum to be agreed, as the anticipated rental income stream will exceed the full development costs of the project. A copy of a Debt Redemption Model is attached to this Proposition, which gives an indication of the costs of this project. It is for guidance purpose only. Final costings will not be known until the detailed development design has been completed and tenders received. The detailed financial arrangements are subject to the final approval of the Finance and Economics Committee. The Housing Development Fund will fund any interest and capital development subsidies.

Conclusion

It is evident that States funding for this and other new housing developments is not available given the enormous pressures on the capital fund. Housing Trusts have been successful in providing social rented accommodation in the past and this method of procurement is tried and tested and has been supported by the States. It is worth noting that by the end of 2003 over 860  families and individuals will be tenants of local housing trusts.

This proposition, if approved, will not have any manpower implications for the Housing Committee, but will affect its revenue budget with regard to the payment of rent rebate in the sum of approximately £74,000 per annum.

_______________________________________________________________ Re-issue note

This projet has been re-issued because the debt redemption model now attached at the Appendix was omitted from the original version.

APPENDIX

Name of Scheme: B a s du Mont Rental Projections

Capital Investment

£

Contract Works 1,886,700

Inflation (4% p.a.) 167,559

Fees (@ 15%) 308,139

Relocation Costs 20,000

Legal Costs 5,000

Finance Costs 35,554

CTJ Contribution to land value 314,000 Balancing figure  £ 19,625 Per Unit Total 2,736,952

Parameters

Investment Fund Interest Rate 4.00% Capital Fund Interest Rate Variable Overall Interest Rate

Annual Inflation Rate 3.50%

Expenses as a Percentage of Rentals Agents' Fees 5.00% Service Charges 3.00% Maintenance 7.00% Voids 3.00% Total 18.00%