Description: COAT-ARM Hastings District Council

 

Civic Administration Building

Lyndon Road East, Hastings

Phone:  (06) 871 5000

Fax:  (06) 871 5100

WWW.hastingsdc.govt.nz

 

 

 

 

Open

 

A G E N D A

 

 

Council MEETING

 

Item 19 - Hawke's Bay Community Fitness Centre Trust Lease

 

 

Meeting Date:

Thursday, 30 November 2017

Time:

1.00pm

Venue:

Council Chamber

Ground Floor

Civic Administration Building

Lyndon Road East

Hastings

 

Council Members

Chair: Mayor Hazlehurst

Councillors Barber, Dixon, Harvey, Heaps, Kerr, Lyons, Nixon, O’Keefe, Poulain, Redstone, Schollum, Travers and Watkins

 

Officer Responsible

Chief Executive – Mr R McLeod

Council Secretary

Mrs  C Hunt (Extn 5634)

 


TRIM File No. CG-14-1-00518

 

 

HASTINGS DISTRICT COUNCIL

 

COUNCIL MEETING

 

Thursday, 30 November 2017

 

VENUE:

Council Chamber

Ground Floor

Civic Administration Building

Lyndon Road East

Hastings

TIME:

1.05pm

 

 

A G E N D A

 

 

19.       Hawke's Bay Community Fitness Centre Trust Lease                                     5

 

     


File Ref: 17/1197

 

 

REPORT TO:               Council

MEETING DATE:        Thursday 30 November 2017

FROM:                           Chief Financial Officer

Bruce Allan

SUBJECT:                    Hawke's Bay Community Fitness Centre Trust Lease        

 

 

1.0       SUMMARY

1.1       The purpose of this report is to obtain a decision from the Council on the lease to the Hawkes Bay Community Fitness Centre Trust (HBCFCT) on the Regional Sports Park land.

1.2       This issue arises from a need to formalise the arrangements for the HBCFCT.

The Council is required to give effect to the purpose of local government as prescribed by Section 10 of the Local Government Act 2002. That purpose is to meet the current and future needs of communities for good quality local infrastructure, local public services, and performance of regulatory functions in a way that is most cost–effective for households and businesses. Good quality means infrastructure, services and performance that are efficient and effective and appropriate to present and anticipated future circumstances.

1.3       This report concludes by recommending that the lease with the HBCFCT be entered into.

2.0       BACKGROUND

2.1       Council has agreed to provide $4m of capital funding to the Hawkes Bay Community Fitness Centre Trust for the development of a new world class regional sports hub and community health centre at the Hawkes Bay Regional Sports Park and to be known as the Hawke’s Bay Centre for Excellence in Human Performance.

2.2       A Feasibility Study prepared by the Trust for this project and updated in July 2017 states the following in reference to this project:

The Hawke’s Bay Community Fitness Centre Trust is planning a new $17 million world-class sports hub and community health centre at the Hawke’s Bay Regional Sports Park.  With $10 million of capital funding already secured, including $4 million from Hastings District Council, the target opening date is early 2019.  In addition to its sports and recreation focus, the facility will underpin a comprehensive regional obesity prevention and reduction initiative.

The planned facility and programmes have a high degree of strategic fit with the Hastings District Long Term Plan, Hawke’s Bay community outcomes, existing school and community health and fitness programmes, and regional health stakeholder initiatives seeking to reduce obesity rates and promote physical activity and healthy eating.  The facility will provide a broad base of services to the Hawke’s Bay for sporting, wellness and physical education purposes.

The development will cater for regional needs around community health and fitness, sporting excellence, health-related education and research.  It will model off the successful example of AUT Millennium in Auckland.  The aim is to integrate community sport, school sport development, community health and fitness and high-performance sport into a leading Centre of Excellence in Human Performance.

The Centre will service three main markets regionally:

·    public (community health and fitness programmes and gym);

·    school groups; and

·    sports users

The planned development will provide programmes for the whole community, from health and wellbeing for all ages through to sports performance development of youth talent in schools and clubs, catering for users from Napier, Hastings Centre Hawke’s Bay and Wairoa.  The Trust anticipates approximately 240,000 annual user-visits, comprising 85 per cent community members and school groups and the remainder being local sports groups and other sports performance development stakeholders.

Apart from AUT Millennium in Auckland, no other facility in New Zealand caters for both sports performance training and community health and fitness with on-site sports medicine and sports science support.  This will be achieved by providing a wide range of services at the main facility at the Regional Sports Park and via satellite services managed from the facility.

The community health and fitness gym will adhere to AUT Millennium programme requirements.  A Fitness Trail at the main facility will also be a drawcard.  Proposed group and individualised community health and fitness programmes will be professionally developed and managed:

·    based on best evidence from research-led programmes;

·    supervised by certified instructors/coaches; and

·    with baseline health, nutrition and active exercise status assessment on programme entry.

As part of its consideration of options and overall planning, the Trust has undertaken extensive reviews of research literature to identify what works for obesity prevention and reduction.  The initiative itself will contribute to future knowledge through the development and implementation of health-related research programmes including a longitudinal study.

The Trust also researched existing sport, health and fitness facilities in the Hawke’s Bay region, and identified no existing specific facilities managed by health professionals suitable for community-wide healthy living, wellbeing or active recreation programmes.  Following consideration of many available location and facility options, a staged build at the Hawke’s Bay Regional Sports Park was identified as the preferred option allowing scope for future expansion.

2.3       The Council funding has been provided for through the 2016/17 ($2m) and the 2017/18 ($2m) budgets. To-date the Trust has drawn down $550,000 of the budgeted capital contributions.

2.4       Council currently leases the Regional Sports Park land to the Hawkes Bay Regional Sports Park Trust (HBRSPT) n a peppercorn rental for an initial term of 35 years with two renewal terms of 35 year and a final expiry date of November 2113.

2.5       The deed of lease with the HBRSPT notes the following permitted use:

“Operation as a Regional Sports Park facility in accordance with the Sports Park Concept, for charitable purposes in accordance with the charitable purposes of the Trust as set out in the Deed of Trust dated 28th August 2008 (and as amended from time to time with the prior consent of HDC)”

3.0       CURRENT SITUATION

3.1       The HBCFCT is about to enter into construction contracts for the first stage of construction and requires a lease arrangement to be in place prior to building on Council owned land.

3.2       The preference of HBCFCT was to have a direct lease with Council that had longevity to support the level of investment they were making on this land. In order to achieve this the land area that the HBCFCT is to now occupy had to be excluded from the HBRSPT lease. To achieve this outcome the current lease to HBRSPT will need to be surrendered with new leases put in place for HBCFCT and HBRSPT which largely mirror each other but for the different areas and purposes and permitted uses. The only significant difference will be the information detailed in clause 12 of the HBRSPT lease has been removed from the HBCFCT lease and will be reflected in an Operations Agreement between Council and the HBCFCT rather than included in the lease at the request of the HBCFCT.

3.3       In support of this there is a proposed Heads of Agreement between Council and the two Trusts and an Operations Agreement will be put in place between Council and HBCFCT which records the basis upon which HBCFCT will operate at the Sports Park.

3.4       The HBCFCT, HBRSPT and Council Officers have worked together to create a lease agreement that meets all parties needs and requirements.

Lease

3.5       The new leases for the HBRSPT (Attachment 1) and HBCFCT (Attachment 2) have been developed principally off the current lease with the HBRSPT. They incorporate a level of protection for Council as landowner ensuring that the land can only be used for certain purposes and ensuring the assets are maintained to required standards.

3.6       Heads of Agreement

3.7       The proposed Heads of Agreement (HoA) (Attachment 3) between the three parties acknowledges the intention of the Trusts to merge their assets into a single trust, acknowledging also that Council will need to consent to the terms on any merger.

3.8       The HoA also acknowledges that each Trust has a separate lease arrangement with Council and if the Trusts assets were to be merged, then a new lease would be created or if the merger was unable to proceed by 2040 then a subdivision would be undertaken to provide HBCFCT with a separate title to lease from Council.

3.9       While the HoA states that the Trusts will work together in good faith to agree on the form and terms of the merger as soon as they are reasonably able to do so, it does set out a rather long period to achieve the merger of the two Trusts of 31 December 2040. There is still a lot of work to be done by the two Trusts to establish a shared vision and understand what the future structure will be and how it will operate.

3.10    The HoA also sets out the operational framework for the two Trusts which includes points such as sponsorship, common areas and outgoings, competition and joint use of facilities.

Operations agreement

3.11    The Operations Agreement between Council and HBCFCT (Attachment 4) sets out to outline that throughout the term of the lease the HBCFCT must operate the area in accordance with the Trusts purpose and the permitted use defined in the lease.

3.12    Jodi Lett of Bannister and von Dadelszen has been providing advice to Council and protecting the interests of Council during the development of these agreements.

4.0       OPTIONS

4.1       Option 1:

i.    Surrender the current HBRSP lease and enter into the new leases with the HBCFCT and HBRSPT under the terms of the lease attached to this agenda.

ii.   Enter into a Heads of Agreement with HBCFCT and HBRSPT.

iii.  Enter into an Operations Agreement with HBCFCT.

4.2       Option 2 – instruct Council Officers to enter into a different arrangement as determined by Council

5.0       SIGNIFICANCE AND ENGAGEMENT

5.1       While entering into this lease arrangement does not meet the thresholds outlined in the Significance and Engagement Policy for this to be deemed a significant decision, entering into a long term lease arrangement is an important decision and one that Council must be satisfied that the risks are being mitigated.

6.0       ASSESSMENT OF OPTIONS (INCLUDING FINANCIAL IMPLICATIONS)

6.1       The deed of lease has been written to be consistent and cognisant of the deed of lease with the HBRSPT, it provides all the necessary protections for Council along with a Heads of Agreement which sets out how the Trusts will operate together on the Regional Sports Park land. To complete the documentation an Operations Agreement between Council and the HBCFCT outlines that throughout the term of the lease the HBCFCT must operate the area in accordance with the Trusts purpose and the permitted use defined in the lease.

6.2       The HBCFCT is now in a position to award the build contract, the building consent is nearing approval, sufficient funding has been secured and the Trust requires this lease arrangement to be put in place before they can commence construction.

6.3       While the HoA states that Trusts will be working together in good faith on the terms of the merger, there is still a lot of work to be done by the Trusts to facilitate this. Council as the landowner is well placed to assist with these discussions and it would be recommended that Council facilitate a meeting of the two Trusts and associated entities to establish a shared vision or future structure.

7.0       PREFERRED OPTION/S AND REASONS

7.1       The preferred option is Option 1. All parties have been involved in this process and the necessary protections for Council have been incorporated in the arrangements recommended.

 

8.0       RECOMMENDATIONS AND REASONS

A)        That the report of the Chief Financial Officer titled Hawke's Bay Community Fitness Centre Trust Lease dated 30/11/2017 be received.

B)        That the Council surrender the lease to the Hawkes Bay Regional Sports Park Trust

C)        That Council enter into the Deed of Lease for the Hawke’s Bay Centre for Excellence in Human Performance with the Hawkes Bay Community Fitness Centre Trust.

D)        That Council enter into the Deed of Lease and for the Hawke’s Bay Regional Sports Park with the Hawkes Bay Regional Sports Park  Trust.

E)        That Council enter into the Heads of Agreement with the Hawkes Bay Regional Sports Park Trust and the Hawkes Bay Community Fitness Centre Trust.

F)        That Council enter into the Operations Agreement with the Hawkes Bay Community Fitness Centre Trust.

 

 

G)        That The Chief Executive of Council be delegated authority to finalise these agreement and make necessary amendments if required.

H)        That Council as the landowner of the Hawkes Bay Regional Sports Park, facilitate a meeting of the Hawkes Bay Regional Sports Park Trust, the Hawkes Bay Community Fitness Centre Trust and associated entities to establish a shared vision or future structure for a merged Trust.

 

 

Attachments:

 

1

HB Regional Sports Park Trust Lease

CG-14-1-00517

 

2

HB Community Fitness Centre Trust Lease

CG-14-1-00513

 

3

Heads of Agreement - HDC, HB Regional Sports Park Trust and HB Community Fitness Centre Trust

CG-14-1-00511

 

4

Hastings District Council and HB Community Fitness Centre Trust Operational Agreement

CG-14-1-00512

 

 

 

 


HB Regional Sports Park Trust Lease

Attachment 1

 

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HB Community Fitness Centre Trust Lease

Attachment 2

 

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Heads of Agreement - HDC, HB Regional Sports Park Trust and HB Community Fitness Centre Trust

Attachment 3

 

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Hastings District Council and HB Community Fitness Centre Trust Operational Agreement

Attachment 4

 

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