EC Meeting Papers March 2018

Quorn redevelopment and new build.

Update. March 7 th 2018.

1 At the time of writing this (7 th March, 1.00pm) there is one crucial document from the Project Manager that is awaited. This is his report and recommendation on the bids received from 3 contractors on Monday 5 th March for our building work. This report will have to be sent separately to the EC. It will also include the additional costs on top of the contractors’ quote. 2 Three competent contractors have bid for this work and it is estimated that it cost each contractor around £10,000 to put their bids together, so we have substantial pieces of work to consider and genuine interest from three experienced and capable companies. 3 The range of prices are all below our internal cost plan, exclude VAT and are around £5m. Remember there are additional costs. These could include approx. £200k VAT on the house build if we can’t sort it, £175k project manager’s fees, potential costs of track access, hotel extension furniture, beds and so on, any additional materials for new GFTU Office, Furniture and kitchens in houses and some fittings, potentially (stamp duty to be checked), potential communications infrastructure work. This could be offset potentially by any capital gains allowances there may be, and I have asked our accountant to look at this also. So as of today the precise and actual cost of the building project is not fully known, but following our project manager’s report on Friday we should be in a better position to know. 4 The cheapest quotation option is also the proposal for the fastest build time, 50 weeks. This compressed build time would entail GFTU Staff moving into a temporary office on site. I am consulting staff on this matter. I do not anticipate a problem with this aspect and the specification of the temporary offices are fine as far as I can see. 5 The substantial issue we have been grappling with is whether to go ahead with the building for which we have planning permission to build as a nursery. Any alternative use would require new planning permission and given the state of the local council, perhaps some time factor in achieving a change of use permission.

6

We currently have around £6m in our investment portfolio.

7 Obviously it is to our financial advantage not to take a loan out on any of the Quorn redevelopment spending. If we can live within our means and not take a loan it is a very strong position for us.

8

If we were to take say £5m out for the rebuild that would leave £1m in the main investment.

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