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A decision made (27.03.08) to approve the surrender and renewal of the lease for St. Helier Yacht Club, South Pier, St. Helier.

Decision Reference: MD-PH-2008-0020
Decision Summary Title :	DS – S1 St Helier Yacht Club, South Pier, St Helier – surrender and renewal of lease		Date of Decision Summary:	26 March 2008
Decision Summary Author:	P Griffin – Senior Valuer/Estates Surveyor		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR – Revised Report - S1 St Helier Yacht Club, South Pier, St Helier – Surrender and Renewal of Lease		Date of Written Report:	26 March 2008
Written Report Author:	P Griffin – Senior Valuer/Estates Surveyor		Written Report : Public or Exempt?	Public
Subject: 1666/1 - S1 St Helier Yacht Club, South Pier, St Helier – surrender and renewal of lease
Decision(s): 1. The Minister decided that this decision should override the delegated decision of the Assistant Director of Property Holdings dated 14 January 2008, which was noted under decision MD-PH-2008-0006 of 22 January 2008. 2. The Minister, having considered the accompanying report, accepted the decision of the Minister for Economic Development to surrender and renew the lease to St Helier Yacht Club of its clubhouse at South Pier, St Helier, the lease term being 26 years with a provision for the lessee to extend the term for a further 21 years, at a commencing annual rental of £40,000.
Reason(s) for Decision: 1. Under Standing Order 168 (1) (a) and 168 (3) the Minister hereby notified the States that he had accepted the recommendation of Property Holdings to agree to the above land transaction. 2. Under Standing Order 168 (5) the Minister hereby authorised the Attorney General and the Greffier to pass any contract which is required to be passed on behalf of the Public.
Resource Implications: Other than those detailed in the report there are no further financial or manpower Implications.
Action required: 1. In accordance with Standing Order 168 (3) this decision must be presented to the States at least 15 working days before the contract is passed. After the expiry of 15 working days following presentation to the States the transaction may be concluded. 2. The Director of Property Holdings is to notify the Minister for Economic Development of this decision. 3. The Director of Property Holdings is to instruct the Attorney General and the Greffier to pass the necessary contract, and to copy this decision to the Assistant Minister, Treasurer and Deputy Treasurer.
Signature:		Position: Senator T A Le Sueur, Minister for Treasury and Resources MD-PH-2008-0020
Date Signed:		Date of Decision: 27/03/08

St. Helier Yacht Club - surrender and renewal of lease

TREASURY AND RESOURCES DEPARTMENT

PROPERTY HOLDINGS

Property Transaction for Ministerial Decision - Minister for Treasury and Resources

Revised Report - Surrender and Renewal of Lease: S1 St Helier Yacht Club, South Pier St Helier

PG/1666/1-3

Purpose

To seek a revised approval from the Minister for Treasury and Resources to surrender and renew the lease to St Helier Yacht Club of its clubhouse at South Pier, St Helier.

Background

Reference is made to the previous report dated 11 January 2008 which sets-out the background and heads of terms of the lease surrender and renewal. The principle of the lease surrender and renewal was approved under delegated decision by the Assistant Director of Property Holdings on 14 January 2008, which was noted under decision MD-PH-2008-0006 of 22 January 2008.

The heads of terms of the 1 January 2008 report have been revised as follows:

1. Break Option.

Included in the heads of terms in the 11 January 2008 report was provision for a “Break Option”. This was included at the request of the Waterfront Enterprise Board in the event that redevelopment plans were considered for South Pier. Negotiations between the Yacht Club, Jersey Harbours and WEB have led to an in-principle agreement that the option to break the lease shall be by mutual agreement between the lessor and the lessee.

The revised head of term for the break option thus reads:

BREAK OPTION - By mutual agreement between the Lessor and Lessee, the Lessor shall have the right to break the lease at any time but only due to the redevelopment of the port facilities and on giving 6 months notice in writing to the Lessee.

2. Rental.

The original head of term for the annual rental has also been revised to include additional information on the value of the grant being provided by Jersey Harbours to the Lessee:

RENTAL - The agreed commencing rental shall be £40,000 p.a. payable quarterly in advance (Jersey Harbours has agreed to provide the Lessee with an annual grant of £14,000 by way of a separate agreement).

This grant will assist the Club with its ‘Royal Yachting Association’ (RYA) training programme, and following the refurbishment and expansion of the facilities, the Club will be able to offer greatly enhanced courses. This compliments the Jersey Harbours' Coastguard programme of improving safety at sea and the ‘Sail Safe’ card. Yachtsmen who have an approved RYA training certificate will benefit from discounts on training courses, insurance and other marine related items, ie chandlery, maps, equipment. Part of the justification of the grant, is that by undertaking the training, sea safety will be improved.

3. Rent Review.

The rent review heads of terms from the 11 January 2008 report are revised as follows:

RENT REVIEW - The rental shall be reviewed every three years from the commencement date as follows:

- The first review will be at the third anniversary and will be in line with the increase in the Jersey Retail Price Index and six yearly thereafter.

- The second review will take place at the sixth anniversary and will be based upon the Market Value of the demised premises as at the commencement date and six yearly thereafter.

- The basis of establishing the market rental of the demised premises at the time of rent reviews shall include the valuation through comparable market evidence of the constituent parts of the property, ie, storage, offices, restaurant/bar and residential etc.

4. Guarantor.

An additional head of term has been introduced in respect of a guarantor provision in the lease as follows:

GUARANTOR - The Lessee shall provide a named guarantor who will be approved by the Lessor, and who will guarantee to the Lessor the due and proper performance of the terms of the lease by the Lessee, and who will pay, indemnify and make good to the Lessor any costs arising from non-compliance by the Lessee.

5. Option to Renew.

It should also be noted the proposed ‘option to renew’ provision in the lease gives the Lessee an absolute right to extend the term for a further 21 years, thus giving a total period of 47. This is noted in the ‘option to renew’ head of term below.

All other heads of terms remain as per the 11 January 2008 report as follows:

LESSOR - Public of the Island.

LESSEE - St Helier Yacht Club.

DEMISED PREMISE - The land and buildings known as S1 St Helier Yacht Club South Pier St Helier.

LEASE TERM - 26 years deemed to have commenced on 01 April 2008, “the commencement date” or such other date agreed between the parties.

OPTION TO RENEW - The lessee shall have the option to renew the lease for a further term of 21 years on the same terms and conditions save as to rent and this option to renew.

USE - The demised premises may only be used:

1. as a Yacht Club

2. for yachting, boating or other marine related activities or functions for both members and non members of the club

3. nautical and marine related education and nautical and marine related training for both members and non members of St Helier Yacht Club.

REPAIRS & MAINTNANCE - The Lessee will be responsible for the repair and maintenance of the demised premises.

STRUCTURAL

ALTERATIONS - To be with the Lessor’s prior written consent such consent shall not be unreasonably refused or delayed. Such alterations to be removed at the Lessee’s expense at the termination of the lease should the Lessor so require.

ALIENATION - Assignment shall only be permitted at the Lessor’s absolute discretion during the first 21 years of the agreement but shall be permitted thereafter with the prior written consent of the Lessor which consent shall not be unreasonably withheld or delayed.

Sub-letting shall only be permitted at the Lessor’s absolute discretion during the first 21 years of the agreement but it shall be permitted thereafter with the prior written consent of the Lessor which consent shall not be unreasonably withheld or delayed.

SERVICES - It is acknowledged that the lessee shall be responsible for the payment of all costs and services associated with the use and occupation of the demised premises.

INSURANCE - The Lessor shall insure the building.

The Lessee shall insure the contents and put in place Public indemnity cover for a value required by the Lessor.

RATES - The Lessee will be responsible for both foncier and occupiers rates in relation to the demised premises.

FEES - The Lessee will agree to pay all reasonable legal costs and fees incurred in relation to the preparation, drafting and the completion of this lease agreement.

TERMINATION - For the avoidance of doubt at the termination of the Lease, howsoever caused the Lessee shall give up possession of the demised premises, including any additions thereto, including all buildings and the Lessor’s fixtures and fittings therein in good order and condition in accordance with the Lessee’s covenants.

CONDITIONS - The Lessee shall be permitted to undertake all works to the demised premises in relation to planning permit P/2006/0612 dated 24 May 2006.

Recommendation

It is recommended that the Minister accepts the decision of the Minister for Economic Development to surrender and renew the lease to St Helier Yacht Club of its clubhouse at South Pier, St Helier, the lease term being 26 years with a provision for the lessee to extend the term for a further 21 years, at a commencing annual rental of £40,000.

Written By: Paul Griffin, Senior Valuer/Estate Surveyor

Signature …………………………

Authorised By: David Flowers, Director of Property Holdings

Signature ………………………… Date 26 March 2008