Agenda item

DECLARATION OF INTEREST

During discussion of the following item of business, the Convener declared an interest due to his membership of the Union Terrace Gardens Board. He did not feel it necessary to withdraw from the meeting.

With reference to article 16 of the minute of meeting of Council of 30 June, 2010, the Committee had before it, a report by the Director of Enterprise, Planning and Infrastructure which (a)  provided further information on Tax Increment Funding (TIF); and (b)  requested that a number of other projects in the city be included in the business case that was to be presented to Council on 27 April, 2011.

The projects which officers requested be included were as follows:

• the public realm works associated with the creation of a high quality pedestrian route linking Union Square, the City Garden, Aberdeen Art Gallery, the Bon Accord Centre, and St Nicholas House (in anticipation of its future redevelopment;
• the demolition, site preparation, and enabling infrastructure related to the regeneration of Upper Denburn (inclusive of the Denburn Health Centre and car park);
• enabling infrastructure and construction costs related to the Aberdeen Art Gallery extension; and
• the demolition, site preparation and enabling infrastructure relating to the redevelopment of St Nicholas House.

Having previously agreed to hear two deputations on this matter (article 1 of this minute refers), the Convener invited Mike Miller to speak, followed by Mike Shepherd.

Mr Miller was of the opinion that the ‘loose coupling’ approach that had been proposed was a risky option for the Council, and that this type of approach was usually utilised in areas of deprivation where the rates were low to begin with, and could be increased.  He continued to explain that he felt that a ‘direct coupling’ approach would be less risky to the Council, and that the use of TIF schemes should be reserved for when pump priming was needed to ensure that development took place.

Mike Shepherd, who was speaking on behalf of the Friends of Union Terrace Gardens group, requested clarity on the statement made within the report that the project would have zero financial risk to the Council, which, in his opinion, would be impossible to achieve.  Mr Shepherd suggested that the Council should not be borrowing funds when it was in such a stringent financial position; he further requested an explanation as to what contingencies would be put in place for the project given that the Council would not be providing any capital or revenue funds.

Members asked a number of questions of the deputations, and of officers.

During the course of debate, Councillor Laing made a remark concerning officers’ knowledge of TIF.  A number of members commented on the nature of these remarks, and Councillor Laing subsequently apologised to any officer who may have taken offence in this regard.

The report recommended:-

that the Committee -

(a)       approve the inclusion of several other important city centre projects (as detailed above) within an expanded Tax Increment Funding (TIF) business case;

(b)       note that these are projects which the Council would wish to progress regardless of whether or not the City Garden project is realised;

(c)        note that a subsequent paper may require to be submitted to the next meeting of this Committee of 2 December, 2010, requesting a Council contribution towards additional consultancy costs, over and above the agreed £100,000 being provided by Scottish Enterprise, which are directly related to the inclusion of additional projects within an expanded TIF business case; and

(d)       note that a final business case will be reported to the Council meeting of
27 April, 2011.

The Convener, seconded by Councillor Fletcher, moved:

            that the Committee approves recommendation (a) as detailed above; instructs that a report be submitted to the next meeting with an update on the consultancy costs; reiterates that the Council would not be making any contribution towards additional consultancy costs that may arise from the expanded business case; further reiterates that Pricewaterhouse Coopers’ assignment is to bring forward a business case that contains zero financial risk to the Council; and to approve recommendation (c) as detailed above.

Councillor Graham, seconded by Councillor Cooney, moved as an amendment:

            that the Committee takes no action on this matter.

On a division, there voted: for the motion (11) – the Convener; the Vice Convener; and Councillors Cormack, Dean, Farquharson, Fletcher, Leslie, May, McCaig, Wendy Stuart and John West; for the amendment (4) – Councillors Cooney, Crockett, Graham and Laing.

The Committee resolved:-

to adopt the successful motion.

Councillor Graham intimated that he wished the report dealt with in the preceding article (Tax Increment Financing for the City Gardens Project) to be referred to Council for a final decision, and was supported by Councillors Cooney, Crockett, Laing in this respect.  As the proposal did not have the required number of members supporting it in terms of Standing Order 36(3), the report was not referred to Council, and the decision of this Committee as detailed above, was final.