Government Headquarters, Union Street, St. Helier: Acquisition: Structure & Cashflow

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A decision made 16 May 2025:

Decision Reference: MD-TR-2025-356

Public

Subject: New Government Headquarters (office) Union Street St Helier, Jersey, JE2 3DN – Proposed acquisition – structure and cashflow

Report Title: New Government Headquarters (office) Union Street St Helier, Jersey, JE2 3DN – Proposed acquisition – structure and cashflow

Exempt (Article 33(b))

Decision(s):

The Minister for Treasury and Resources decided to:

1) exercise the Option to acquire the new Government Headquarters in line with the pre-agreed terms by using money from the Social Security (Reserve) Fund; and

2) Transfer £3m from the Social Security (Reserve) Fund to the Consolidated Fund in respect of the land value; and

3) subsequently put into place optimal and legally binding arrangements for the new Government Headquarters to be held as a local infrastructure investment for the Social Security (Reserve) Fund; and

4) note that actions in relation to action 3 may incur stamp duty which, if incurred, will be paid using money from the Social Security (Reserve) Fund with the intention of returning the fund to a net nil position through including a transfer back of a corresponding sum of money from the Consolidation Fund to the Social Security (Reserve) Fund in the proposed Budget 2026-2029; and

5) put into place an arrangement whereby the Social Security (Reserve) Fund, will receive internal budget reallocations, which would mirror future lease arrangements, once action 3 is complete. These arrangements shall be dealt with in accordance with a Memorandum of Agreement between the Minister for Treasury and Resources, the Minister for Social Security and the Minister for Infrastructure, on the basis that it would be that it would be timelier, cost effective and financially prudent to exercise the Option without unnecessary delay.

Reason for Decision(s):

In 2021, the Public of the Island entered into a Development Agreement, under which Dandara would construct a new office building on land in the States ownership. Under the agreement, the Public (but in practice the Government), could exercise the Option to pay a fee, within 3 years following construction, effectively paying for the construction work. If this Option was not exercised, then the land would be let to Dandara under a long lease, and the Public would sub-lease the building for 25 years from Dandara for the Government‘s use. In accordance with the Development Agreement, the approved Budget 2025-28, the approval of the Treasury Advisory Panel and the published Investment Strategies, it is the intention for the Social Security (Reserve) Fund to acquire the building, based on an internal rate of return of 5.4%. The Minister for Infrastructure has agreed to initiate the process and this decision represents the next step in the process of exercising the Option, and acquiring the building on behalf of the Social Security (Reserve) Fund.

Resource Implications: The decision would result in a payment to Dandara from the Social Security (Reserve) Fund in respect of the exercising the Option, as well as a payment from the Social Security (Reserve) Fund to the Consolidated Fund in respect of the land value. If incurred, stamp duty will be payable. Relevant approvals have already been put in place through the Treasury Advisory Panel and Investment Strategies, and Budget 2025-2028. There are no additional specific staffing implications.

Action Required: The Department and/or Ministerial Office to update relevant parties of the decision.

Signature:

Signed By: Minister for Treasury and Resources

Date Signed:

Date of Decision (If different from Date Signed):