Income Strip Funding Opportunity – Roots Hall and Fossetts Farm
Southend-on-Sea Borough Council and its partners are looking to develop the Roots Hall and Fossetts Farm site. The development will free up space for the delivery of 502 units at Roots Hall by moving the old, dilapidated football stadium to a new purpose-built arena at Fossetts Farm. In addition, the Fossetts Farm site will accommodate a new rental community comprising 850 homes and a wide range of elements that will benefit the new community including management suite/concierge, convenience store, café and co-working space.
In order to facilitate this, the Council was looking for financial assurance on a proposed funding deal that would see the Council take on a long term financial obligation in return for the financial benefits of the rental properties.
The Role
The Council commissioned 31ten to review the proposed arrangements and financial appraisals and consideration and comment upon:
- The value for money to the Council offered by the proposed transaction;
- How the proposed transactions will affect the Council’s capital and revenue budgets and how revenue will flow through to the Council;
- The prudent retention of a sinking fund and what proportion of the net income should be invested and how this should be held and treated in the Council’s accounts;
- How the various elements should be treated in the Council’s accounts;
- Any specific resources that the Council will require to manage the financial implications of the proposed arrangements; and
- The financial risks and mitigations.
Key Outcomes
Our work allowed the Council to gain a better understanding of the value for money transaction, the affordability of the deal and quantify the potential risks with this approach. By gaining a better understanding of risk the Council was able to impact on the transaction to put management and mitigation factors in place to protect its long term financial position and the sustainability of its medium-term financial plan.
Based on the outcome of the work, the deal was provisionally signed and the masterplan and development activities are now taking place.
