Issue details

Proposed decision

To approve the extension of the Old Rectory Business Centre contract for a period of 12 months to allow time to undertake the disposal

The Old Rectory Business Centre in Northfleet is a KCC-owned facility that has offered high quality office space to local businesses since 2009. In September 2024 decision 24/00083 was taken by the Cabinet Member to dispose of the property as a going concern and approve an extension to the current contract for a period of nine months (expires at end of August 2025) to allow time to undertake disposal.  Whilst good progress has been made in preparation for the disposal, a further extension of 12 months is required to complete the process and ensure smooth handover of control once the property is sold.

Options:

Option 1 – Preferred option. Extend the current management contract for a duration of up to 12 months to complete the property disposal process and ensure smooth handover of control.  The Director of Growth and Communities will have delegated authority to enter into a short-term contract extension. The contract will continue as per the current terms and conditions with no amendments proposed. The service provider has indicated that they would agree to a contract extension. The proposed contract extension would be taken in line with Clause 2.2 of the Contract document, which allows up to 48 months of extensions. 

Option 2 - Initiate a procurement exercise to test the market and allow for a short initial contract period of 12 months with extension clauses to ensure minimal disruption to the companies on site.  This would require resource in the form of KCC officer time to run a procurement process but would also be difficult to complete before the end of August. is not a preferred option as it would not be feasible for the Council to re-procure this service for such a limited period, particularly since work is underway to dispose of this asset as a going concern.

Option 3 – Do nothing and allow the management contract to end on 31^st August 2025.  This is not a preferred option, as this could lead to the closure of the centre which would be highly detrimental to businesses located at the centre and damaging to the local economy and local residents employed at the centre.

Alignment to KCC Strategies: Securing Kent’s Future – Budget Recovery Strategy, Objective 3 - Full cost recovery on discretionary spend as the centre is self-funding and returns a profit to KCC on an annual basis. The option also supports the Kent and Medway Economic Partnership’s ‘Kent and Medway Economic Framework’ which looks ahead to 2030 and sets out Kent’s priorities to build and safeguard a prosperous economy: increasingly productive, sustainable and inclusive. The Old Rectory Business Centre contributes to the ambitions and many of the actions identified with the Framework, for example action area 4 “Supporting the conditions for growth” and by ensuring access to the spaces that businesses need to expand and by “embedding economic opportunity at the centre of local regeneration” (action area 16).