ECC | Information about the business case for Exeter’s new leisure complex

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Information about the business case for Exeter’s new leisure complex

This factsheet is intended to provide high level information concerning the business case for the Exeter Active Leisure Centre Project.
exeter leisure 1_Retail Street West_Press issue
Why do we need a new leisure complex?
Having opened in the 1940s, Exeter’s Pyramids pool has reached the end of its lifetime. It has become very costly to run and needs substantial multi-million pound investment just to consolidate its continued operation before any improvements can be made to enhance the user experience. The physical constraints of the Pyramids building and site mean there is no scope for extension to offer more facilities.
What is the project cost summary?
The council has a total budget of £26 million for the leisure complex.
This figure covers all building work costs, including statutory and professional fees, costs
associated with the acquisition of the site and the cost of procuring a leisure operator.
We are unable to release specific figures at the present time, as they are commercially sensitive and may prejudice the tendering process.
How does this cost compare to other leisure centres of the same standard?
Sport England have confirmed that the base building cost for the leisure complex compares favourably to similar facilities across the UK.
The cost equates to £3,333/m2, which is in keeping with the Royal Institute of Chartered Surveyors BCIS (Building Cost Information Service) rates of between £2,750/m2 to £3,350/m2 for other leisure schemes which reflects the high quality construction required forpassivhaus and the city centre location.
As the design progresses through the ‘detailed design’ and ‘technical design’ stages, the Quantity Surveyor will continue to work closely with the design team to manage and control successful delivery within the project budget.
What is the phasing of this expenditure over the development period?
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What is the estimated revenue income for the council?
The leisure complex is expected to deliver a trading surplus in every year of its operational life, with a share being returned to the council through a profit share agreement with the leisure operator.
We expect overall income (not just expected revenue) after the first full year of trading to be somewhere in the region of £1.7m to £2m.
More detailed information on revenue will not be released until a leisure operator has been procured. To release the information before the tendering process would impact on the council’s commercial interests. However, in the long term the development will pay for itself and offer a long-term source of income to the council.
This income will be re-invested in facilities and services around the city.
How is the development being funded?
The funding is being sourced from money received via the New Homes Bonus and Community Infrastructure levy.
The council has passed a resolution that the underlying need to borrow will not increase as a result of the leisure complex. Therefore long term borrowing costs will not be incurred.
What assumptions have been made when costing the project?
Costs current at Q3 2015.
Anticipated form of contract is JCT.
Anticipated procurement route is Design & Build, with design up to RIBA Stage E / New Plan 5.
Start on site date Q1 2017.
All works to be in normal working hours other than those specifically mentioned.
Total vacant possession at start on site.
Any excavated material which will need to be removed will be categorisedas ‘inert’ beyond allowance.
Ground conditions will be suitable with no significant cut and fill exerciserequired beyond allowance.
The services to the site do not require reinforcement.
Demolition and asbestos removal from the bus station will be undertaken outside of this project.
Building to be constructed to high quality due to city centre location.
External works to consist of only those shown in the site area, no allowance beyond this.
Costs arising from decontamination of site and removal and disposal of contaminated materials/debris beyond allowance.
A dig and dump remediation method for oil, oil filters and brake fluids from vehicles and machines to site area only. The exact volume is unknown, the allowance includes for a disposal volume of approximately 4,000m3. The allowance could vary considerably based upon timeframe for remediation, depth and distribution of contamination, patterns of surface drainage,location of existing on- site services, depth of necessary foundations and below-ground services. (A contingency sum has been set aside to mitigate such eventualities)
BREEAM Excellent energy criteria requirements only.
The commercial retail space will be constructed outside of this project.
Costs for all surveys required have been included within the Design Team Fee.
Have you undertaken a risk assessment in relation to funding?

In respect of the risk assessment, the council has already set aside £7.9m from New Homes Bonus (with the remainder coming from CIL income). Short term borrowing to cover any timing differences will be undertaken (current cost 0.65% per annum, expected torise to 1.75% by 2018). Provision for the repayment of debt is 2% for a long term asset. The cashflow has been mapped to the timings of receipts and on current projections is not significantly different.

What is the life cycle costing?
At the initial feasibility and options evaluation stage of the project, full 25 year life cycle costing models were developed to consider ongoing running and maintenance costs of the facility. This exercise identified that the selected use of Passivhaus as a build standard would reduce energy consumption by circa 70% per annum. In addition the forecast total spend on plant repair / replacement would be reduced over the 25 year period due to the specification of higher quality products and the improved internal environment reducing normal deterioration and repair requirements.
How will you mitigate against future climate changes?
Exeter University as appointed Climate Change Consultants for the development have assisted the design team in ensuring that the new facility is specifically designed to mitigate future climate changes in the Region up to 2080. This work has influenced the design and specification of the building ensuring it does not overheat in future years, that surface water drainage from the building can drain sufficiently  even in peak flash flood conditions and there is sufficient solar shading. The retrofit of climate mitigation measures can be substantial, for a conventional built building (not
Passivhaus), research undertaken by the Technology Strategy Board on similar projects shows these costs could easily exceed £750,000 over the first 50 year lifetime of the building.
What procurement process have you gone through?
To date, the procurement and appointment of the Professional Team has been competitively tendered via full OJEU compliant procurement procedures. The appointment of the main building contractor will be competitive, in a manner fully compliant with the 2015 Public Contracts Regulations.
Where can I find more information about the leisure complex?

#Theatre4Exeter | An ‘iconic’ building on site of Bus Station

I have been in long-term correspondence over the Exeter City Council’s ‘iconic’ building on the site of the Bus and Coach Station…here’s the latest instalment.

I hope that these discussion help you realise that the decision over the future direction of the Bus & Coach Station development site is much more considered than many people realise.

If you have been following the story closely, you will know that the option to develop the site was awarded to Land Securities and Crown Estate back 2010.

Under the deal,  Land Securities would  draw up proposals for the site  and would be granted a long- term lease by the Council, which  would still own the freehold.

The developer would then pay  for the redevelopment of the site  and lease units to retailers.  Land Securities will now draw  up a feasibility plan and the Council will have the final say  on any proposals.

SEE: Land Securities seal Exeter bus station deal (WMN, 17 March 2014)

Of course this was under the previous LD administration when Leader Adrian Fullam had a letter in the E&E City centre theatre idea is unrealistic (15 March 2010).

Most of his comments then are still valid now.

As a consequence of the recent article in the E&E (“New bus station site plans are due within weeks” 13 June 2015), you highlight 4 points

1) The plans are expected to include a multi-screen cinema
As Adrian pointed out back in 2010, Land Securities are “Land Securities is a commercial company”. The same is true of their successors on the project, TIAA Henderson Real Estate.

They are now responsible for regenerating the current Bus & Coach Station site – they are investing £70m in the project – of course, they will be expecting to make a  substantial return.

The terms of their option gives them full control (subject to the usual planning restrictions) to make best use of that land as they see fit.

As to whether a multiplex is finally delivered on the emerging site is simply a matter of economics.

Each and every one of the 3 multi-screen cinemas operates on a commercial basis – if not, they would close down.

I am assuming that TH Real Estate and Crown Estate have had the relevant conversations with a cinema chain and/or independent and reckon they can get a financial return on delivering a new cinema on this site.

2) It is understood that a new swimming pool is needed to replace the Pyramids.
To be clear the leisure complex is going to much more than a swimming pool, it will have gym and other facilities – more details from Exeter Active, and you see outline details of the building design on Gale and Snowden’s Swim4Exeter page.

Initial design drawing [Gale and Snowden]
Initial design drawing [Gale and Snowden]

As it stands, the research and business case shows that the new leisure complex will NOT be an Olympic-sized pool. I’ve tried swimming in Commonwealth Pool in Edinburgh and it really is daunting.

I am really exciting that this ‘iconic’ building can be built to PassivHaus standards.

I for one would be seriously worried if the new leisure centre were located at one of the suggested alternatives – Arena Park. Many bus route have been threatened by withdrawal of services and I fear that this situation will only get worse in the future.

I want a facility that is easily accessible to all – not just those that can rely on private car use.

I haven’t got the actual usage details of Riverside to hand, but a report to Scrutiny – Economy in January 2014 reported an INCREASE of 44,000 customers at Riverside Leisure Centre in comparison to year one, and a significant rise at the Pyramids Swimming Centre with an increase of 29,000.

I haven’t seen the documents that outline the projected use of the new complex of 500k to 1m (New Exeter swimming pool will ‘attract a million visitors a year’, council claims E&E 19 March 2015), but let’s remember we are talking about visits to the gym and other facilities as well as swimmers.

And to put that in to some perspective – if Theatre Royal Plymouth were open to provide 9 performance a week, there would be an audience of some 1500 (in the 2 venues) per performance, that’s 13,000 each week and totaling 702,000.

But I would once more reiterate that each visitor to Exeter’s Leisure Complex would bring in an income to the Council.

Currently, TRP is a National Portfolio Organisation [NPO] of Arts Council England [ACE] and receives funding to the tune of £1,185,500 – this is committed for the next 3 years. Note I use the phrase committed, rather than guaranteed, as ACE have have stated this could be reviewed if they themselves receive cuts in Government funding.

For your information, the following Exeter-based Theatre Companies receive annual NPO funding from ACE:
Bikeshed – £75k
Northcott – 125k
Alibi – £241k
Kaleider – £110k
and Exeter Phoenix is an NPO for Combined Arts – £125k

As I’ve mentioned in previous correspondence, I think that a new theatre venture in Exeter would be very unlikely to attract such significant funding from ACE.

In addition to susbisdy from ACE,  TRP currently enjoys revenue grant support of £665,000 from Plymouth City Council. The freehold of the Theatre Royal Plymouth (built in 1982) is owned by PCC and let to the operator at a peppercorn rent.

The reality is that a new theatre would cost residents for each and every seat sold.

As a city cllr, I am committed to retaining as much of the current green open space as possible, and any building on the site of Belmont Park would reduce the capacity available for events such as Exeter Respect.

The amphitheatre is an open space within the new development that I would imagine would be used for ad hoc events and informal gatherings (even a new location for the Farmers’ Market?) – rather in the way that Coventry’s Millenium Square is used – rather than for formal money-making initiatives.

3) No reference is made to building a much-needed theatre
I think that in my previous thoughts I have taken issue with this view – the theatre is desired but there is no NEED.

I will admit that’s my view – but with over 5 years of active doorstep work within Cowick, I can honestly say the issue of city centre theatre has been raised with me ONCE. I can take you to the resident, it was so memorable.

I see constant letters from the same people regularly appearing in the E&E expressing their desire, I understand the economic benefits if a city centre theatre, I want “the arts and culture an economic driver of the growth of the city”.

It’s just my view of theatre differs from yours. That’s why I do back the desire of the Theatre For Exeter Development Group to carry out a full feasibility study for the project.  What I’m not prepared to so is fully fund that study – and I believe the T4E Development Group aren’t expecting the City Council to do so.

I would be willing to place a bet – that the feasibility study would find that the financial case for a 1200 seat theatre capable to presenting Number One tours (those seen at TRP) will not stack up.

And I’m willing to place a second one – that a 800-900 seater theatre would be financially viable.

What do I do then?

Ignore the study and plump for the unsustainable venue you want, or the one that we can afford and support?

At the meeting of Exeter Civic Society where the T4E Development Group came into being, there were many who mourned the loss of the resident Artistic Director and repertory nature of the programme at the Northcott.

I have high hopes that the appointment of Paul Jepson up on the hill will start to address these issues – and I feel that his plans will be much more than “developing local production in co-operation with Exeter University”.

You also make mention of parking at the University – there is NO shortage of car parking spaces, albeit a couple of minutes walk away from the theatre. There is also a useful bus service that runs the city centre (and to my home in Heavitree). It is certainly much more accessible to the city centre than Warwick Arts Centre is to Coventy.

The future of the current Pyramids site is still to be decided – I personally would like this to be a major music venue like the Academy chain seen around the country – but I fear I, too, will be disappointed!

You bring back the 1962 closure of the old Theatre Royal – there has been a replacement for this – the Northcott. That was the legacy I inherited when I joined the council in 2011 – I wish different decisions had been taken back then, but they weren’t. We have to progress from where we are now,

Funding cannot be redirected from the ‘unnecessary” cinema no funding from ECC is  being directed there – as I explained earlier, that’s a commercial decision for TH Real Estates and Crown Estates.

The “unnecessary” amphitheatre is something I desire, and have fought hard to retain in the plans – once again there is NO ECC funding for this

Can I refer you to the Bus and Coach Station Development Principles from June 2012 which outlines desires for this sort of  space to be delivered.

4) The City Council must be aware that the small shops are steadily closing in the city
Yet I see thriving independent shops along Paris Street – The Real Food Store (declaration of interest, I’m a minor shareholder), Jelly, The Sandwich Shop, the gift shop (UPDATE: Hyde & Seek!) – and I for one want to see this independent network retained and grown once the new development comes to fruition.

As I say, I’ve given it a lot of thought, as have many of my colleagues.

I’m sure we’ll correspond more once the planning application for TH Real Estates and Crown Estates is lodged with ECC.