Issue - meetings

The Cabinet received a report which provided an overview of how the joint venture Aylesbury Vale Estates (AVE), which was 50% owned by the Council, operates. It also summarised how AVE was performing against the current business plan and presented the draft business plan for 2021-2024 and the strategy for delivery. The Cabinet was invited to provide comments on the future business plan for consideration by the AVE Board.   It was noted that if the Board felt unable to make any changes required to the plan as a result of the feedback, this would be reported back to the Council.

RESOLVED –

i)                    That the performance of Aylesbury Vale Estates against the Strategy and Action Plan for 2020-21 be noted; and

ii)                  That the Strategy and Action Plan in the draft Business Plan for 2021-24 be agreed.

J Chilver, Cabinet Member for Property and Assets, introduced the report which provided an overview of how the joint venture Aylesbury Vale Estates (AVE), that was 50% owned by the council, had operated.  It also summarised how AVE was performing against the current business plan and presents the draft business plan for 2021-2024 and the strategy for delivery.  The Cabinet was invited to provide comments on the future business plan for consideration by the AVE Board.  Further information in support of the recommendation was contained in the commercially confidential Appendix 1 to the report.

The report included information including:

-          An overview of Aylesbury Vale Estates (AVE) and the background to the formation of the joint venture between the council and private investors who collectively form Akeman Partnership LLP.

-          That at inception, most of the AVDC’s property portfolio had been transferred to AVE but operational buildings assets had been  excluded. Several community assets such scout huts, doctors’ surgeries were also transferred but no sale or development could take place without AVDC approval.

-          That as part of the joint venture formation with Akeman Partnership LLP, the management was also contracted at the time of formation from AVE to Akeman Asset Management LLP. The latter was granted a 20-year contract to operate the portfolio from rent collection, asset management, debt management, accounting and reporting.

-          A Members’ Agreement, signed by both sides of the Partnership, set out in detail how the Partnership operated including the process if the council and the private sector partnership did not agree on a voting issue.

-          The management contract provided for quarterly asset management and financial reports to be presented at a meeting of the AVE representative members, with interim monthly reports as necessary. The agreement sets out in detail the delegation process, responsibilities, fee calculation, Key Performance Indicators and Key Performance Targets. Akeman report on these quarterly with an annual review.

-          As an LLP, AVE did not have a “Board” of Directors as such but representatives of both parties had 3 seats at the table.  The Council was currently represented by two Cabinet Members and one officer.  Each side of the JV had one vote at any decision making stage.

-          On the stated aims of AVE.

Financially, AVE was designed to distribute surplus profits both from revenue and capital sales, but it was not allowed to distribute any of the original equity. This meant that an asset acquired for £1m if sold for £1.25m, then £250,000 could be distributed but the remaining £1m must be reinvested.

AVE was now nearly 10 years old and overall has performed well over this period.  The starting portfolio was valued at £36.1m and the purchase by the JV had been financed by non-interest bearing loans from each member of £4m plus two loans from AVDC.  The senior loan was for £27.08m at 6% interest and the second £3.61m of mezzanine loan at 20% pa interest.  After set up costs this gave the members a combined  ...  view the full minutes text for item 17