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Division(s): Oxford South

ITEM EX9

EXECUTIVE - 6 APRIL 2005

OXFORD CASTLE HERITAGE INTERPRETATION CENTRE

Report by Head of Property

Introduction

  1. The redevelopment of the Oxford Castle site is progressing well and most of the building works will be completed before the end of the summer. This report is concerned with the arrangements to be made for the Heritage Interpretation and Education Centre, and also recommends that there be a further Supplemental Agreement with Oxford Castle Limited to allow for the consequences of changes in the building programme.

    2. Heritage Interpretation and Education Centre

  2. The Executive on 7 September 2004 received a report outlining the funding proposals for the Heritage Interpretation Centre and agreed in principle that:

    3. In any negotiations with HLF in response to an approach by it or a condition attached to its offer of grant, revenue support of up to £50,000 per annum should be provided for the Oxford Castle Heritage Interpretation Centre in the event that there was a revenue deficit over and above the amount underwritten by the Oxford Preservation Trust for the Centre during the first five years of operation.

  3. The offer of funding made by the HLF was subject to several conditions including confirmation that the revenue support referred to above would be provided by the County Council if necessary. Oxford Preservation Trust has already agreed that it will if necessary provide support of up to £50,000 per year during the first five years of operation and any support from the County Council would arise only if further additional support were required and would be subject to all appropriate management measures having been taken to avoid or minimise revenue losses. Subject to the comments below relating to the arrangements for operation of the Heritage Interpretation Centre it is recommended that the County Council’s revenue support is formally confirmed.

  4. The HLF offer was also subject to there being a review of the options for the operation of the Heritage Interpretation and Education Centre and that the review should specifically include the possible involvement of a commercial operator. That review has been undertaken and has considered the following options:

    • Involvement of a commercial operator

    • Operational management by the Oxford Castle Trust

    • Operation by the County or City Council Museum Services

  1. Each option was considered against criteria based on agreed heritage and education objectives. Concurrently, advertisements were placed in appropriate publications inviting expressions of interest from commercial operators.

  2. The outcome of the review was that an agreement between the Oxford Castle Trust and a commercial operator was identified as the preferred option. There were several responses to the advertisement for expressions of interest but with one potential operating partner clearly preferred. Following a presentation from that company to the initial subscribers for Oxford Castle Trust and several trustees of the Oxford Preservation Trust it was agreed that there should be further discussions based on two broad options: the operator to be granted a lease with a rent and profit share but with all risks transferred to the company; or an operating agreement with shared risks and all profits reinvested in the Heritage Interpretation Centre.

  3. Although it was initially expected that the Heritage Interpretation and Education Centre would be operated and managed by the new Oxford Castle Trust it seems evident that there could be significant benefits from an agreement with an operating partner. It is therefore recommended that the Executive should endorse the further discussions with the preferred operator and agree in principle to there being an operating agreement potentially involving the grant of a sub-leasehold interest.

    4. Oxford Castle Trust

  4. The application for the registration of Oxford Castle Trust as a company limited by guarantee has been submitted to the Registrar of Companies. When the registration formalities have been completed an application to the Charity Commission will be made for the Trust to be registered as a charity. The four initial subscribers and [potential] trustees were Debbie Dance and Richard Carter-Jonas (Director and Trustee respectively of the Oxford Preservation Trust), Cllr Margaret Godden and Neil Monaghan (Head of Property) of Oxfordshire County Council. The Lord Lieutenant, Hugo Brunner, has agreed to act as Chairman of the Trust and three other prospective trustees have been identified which will leave a further three to be appointed. Mr Carter-Jonas and Cllr Godden have indicated that they would like to step down when the charity has been established and other appropriate trustees have been identified. Care is being taken to ensure that the 11 trustees have between them the full range of experience, skills and expertise to undertake the duties related to the objectives of the charity. Financial, legal, commercial, heritage, educational, archaeological and fund-raising are all necessary areas of expertise.

  5. The County Council is required to nominate two trustees, who do not need to be either serving members or officers. The trustees have an obligation to act in the interests of the Trust in their capacity as trustees rather than in the interests of any organisation which may nominate them (i.e. in this case the County Council). Having in mind the need for the 11 trustees to have the full range of experience and expertise it would be preferable to defer consideration of appropriate nominations by the County Council until such time as the remaining trustees are appointed. It will be for the Democracy & Organisation Committee formally to make nominations, for which there is a procedure agreed by the Committee according to the status of the body concerned: for bodies "useful to the Council’s work" this involves consultation with the relevant Executive Member and the relevant Scrutiny Chair/Deputy. It is suggested that the Oxford Castle Trust should be placed in this category and that in this case consultation could usefully include also the Council’s current nominated trustees and the Trust’s Chairman and Chief Executive.

    6. Development Agreement between the County Council and Oxford Castle Limited

  6. The Development Agreement as signed assumed the completion of the various buildings on the site in a certain order with the granting of the headlease to Oxford Castle Limited dependent upon the completion of the restoration of the Ancient Buildings and the completion of other building works to ‘shell and core’ stage. Although the work on the restoration of the Ancient Buildings, the hotel and restaurant are well ahead, the works to the Tidmarsh Lane site and to B Wing are behind the original programme. In order for the hotel and restaurant operators to be allowed possession of their premises so as to commence fitting-out works it is now proposed that the headlease for the main part of the site be granted to Oxford Castle Limited in advance of the completion of the full works as originally anticipated with the expectation that this would be triggered on 15 April 2005 or as soon as possible thereafter.

  7. This will be subject to Quasar Management, the Council’s Project Manager, being satisfied that all works specified in a revised schedule of works currently being negotiated have been completed to the proper standard, to the issue by Quasar Management of Completion Certificates to that effect, and to the level of the Bank Guarantee Bond remaining in place adequately protecting the Council’s interests until the remaining works are completed. At the same time it is proposed to make provisions to allow Oxford Preservation Trust access to the site for the works to the Heritage Interpretation Centre whether or not the lease for the remaining part of the site has been granted. It will be necessary to ensure that there is coordination between the programme for the works to be undertaken for the Heritage interpretation Centre, Education Centre and shop by OPT and the main scheme, but at present it is not expected that there will be any difficulties with OPT being granted access to the site when needed.

  8. These changes will need to be the subject of a further supplemental agreement between the Council and Oxford Castle Trust and it is recommended that approval be given to such an agreement. Oxford Castle Limited has agreed to pay for/contribute to the Council’s legal costs in preparing the supplemental agreement.

  9. Members should note that SEEDA’s approval is also required and will be sought as soon as the Supplemental Agreement has been prepared. Discussion has already taken place and no problems are anticipated.

    10. Financial Implications

  10. The Executive has already agreed in principle to provide financial support of up to £50,000 per year for the first five years of the operation of the Heritage Interpretation and Education Centre in the event that such support is necessary over and above the support already agreed to be given by Oxford Preservation Trust.

  11. There should be no adverse financial implications for the County Council arising from the further Supplemental Agreement with Oxford Castle Limited but as the Council will be entitled to a share in future profits arising from the granting of the lease of the hotel it would not be in the Council’s interests to delay the fitting-out and opening of the hotel. Any risks arising from the granting of the headlease in advance of the completion of the works should be minimised by the retention of an appropriate level of bond and the very advanced stage of the construction works.

    12. RECOMMENDATIONS

  12. The Executive is RECOMMENDED to

          1. confirm formally that revenue support of up to £50,000 per annum will be provided for the Oxford Castle Heritage Interpretation Centre in the event that there is a revenue deficit over and above the amount underwritten by the Oxford Preservation Trust for the Centre during the first five years of operation;

          2. support further discussions on the operation and management of the Oxford Castle Heritage Interpretation Centre with a prospective commercial operator and authorise an agreement on terms to be agreed with the Oxford Castle Trust, in the event that this is selected as the preferred option;

          3. endorse the process set out in the report for the future nomination of County Council nominated trustees for the Oxford Castle Trust;

          4. authorise a further supplemental agreement between the County Council and Oxford Castle Limited providing for the headlease of the Oxford Castle site to be granted to Oxford Castle Limited upon completion of building works to be detailed in a revised schedule (this to include the ancient buildings on the site), retaining adequate protection from the Bank Guarantee Bond, making provision for access to the site for Oxford Preservation Trust, and including such other incidental provisions as may in the opinion of the Head of Property and Solicitor to the Council be required.

NEIL MONAGHAN
Head of Property

Background Papers: Nil

Contact Officer: Neil Monaghan, tel (01865) 815712

March 2005

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