Agenda item

Under its existing legal contract with WFS, the Council had to shortly decide whether to exercise the Option Agreement (“the agreement”) for the Put and Call on the film studio site (“Site A”) adjoining Wycombe Air Park.  If no decision was made, the P & C would fall away.  Since the existing legal contract was signed in April 2022, WFS had requested a variation in the terms of the P&C to ensure delivery of the overall business plan for developing a major film studio complex on Site A.

Negotiations were ongoing between the Council and WFS and revised terms were close to being agreed.  These terms would result in a greater capital receipt, in accordance with the terms set out in the confidential appendices.  As currently worded, the agreement needed to be signed off by the Council no later than January 2023.  Otherwise, the agreement would fall away.  If the Council decided to serve notice, then it could secure a capital receipt that was greater than the value of the income stream under the current agreement.

Recommendation 1 was whether the Council would agree an extension to this sign off date of the Put and Call option.  On the basis that the P&C did not go live until a planning permission was granted for a permanent consent for film studios on the site, that was likely to be in March 2023, this request for an extension was not a commercially sensitive point and WFS had confirmed that they were ready to progress the extension of time.

Recommendation 2 was whether the Council accepted the variations currently being asked for by WFS.  The key changes sought enabled WFS to acquire the effective freehold for Site A anytime after the agreement was served; in contrast, the Council could not demand a sale until a later date but in the meantime were entitled to a higher rent than currently entitled to.

Recommendation 3 was whether the Council wished to trigger the agreement in either its existing or revised form.  Officers had recommended all three actions as they were all financially advantageous to the Council and optimised the prospects for the film studio to be developed over the short to medium term.

RESOLVED –

1.                         That an extension to the date by when the Council must declare the existing Put and Call Notice (“P&C”) live be authorised.

2.                         That the variation of the terms of the existing Put and Call Notice as set out in the confidential annex be authorised, including:

(a)                      Delaying the date that the Council can service its Put option; and

(b)                      Permitting Wycombe Film Studio (“WFS”) to serve its Call option as soon as the P&C is live, providing the Council’s revised financial position is no worse than that of November 2022.

3.                         That the P&C be declared live, once in its final form, thus enabling the Council to receive the capital receipt form WFS as detailed in the confidential annex.

4.                         That authority to take the actions to implement recommendations 1-3 above be delegated to the Service Director for Property and Assets, in consultation with the Cabinet Member for Accessible Housing and Resources and the Service Director for Finance (Section 151 Officer), it being noted that the capital receipt will be retained for income generation – initially form the interest received on the capital.

The Cabinet Member reported that last year Cabinet had agreed to lease the southern area of Wycombe Air Park to Stage 50 operating as Wycombe Film Studios to build a new film studio complex with obvious benefits for employment and the local economy. The draft lease agreement which came into force once planning permission had been obtained included a Put and Call option whereby Wycombe Film Studios have an option to convert the 25 year lease under the current arrangements into a longer lease in return for a capital sum. This would secure a capital receipt for the Council and a long term income stream and mitigates any risk.

Under its existing legal contract with WFS, the Council had to shortly decide whether to exercise the Option Agreement (“the agreement”) for the Put and Call on the film studio site (“Site A”) adjoining Wycombe Air Park.  If no decision was made, the P & C would fall away.  Since the existing legal contract was signed in April 2022, WFS had requested a variation in the terms of the P&C to ensure delivery of the overall business plan for developing a major film studio complex on Site A.

Negotiations were ongoing between the Council and WFS and revised terms were close to being agreed.  These terms would result in a greater capital receipt, in accordance with the terms set out in the confidential appendices.  As currently worded, the agreement needed to be signed off by the Council no later than January 2023.  Otherwise, the agreement would fall away.  If the Council decided to serve notice, then it could secure a capital receipt that was greater than the value of the income stream under the current agreement.

Recommendation 1 was whether the Council would agree an extension to this sign off date of the Put and Call option.  On the basis that the P&C did not go live until a planning permission was granted for a permanent consent for film studios on the site, that was likely to be in March 2023, this request for an extension was not a commercially sensitive point and WFS had confirmed that they were ready to progress the extension of time.

Recommendation 2 was whether the Council accepted the variations currently being asked for by WFS.  The key changes sought enabled WFS to acquire the effective freehold for Site A anytime after the agreement was served; in contrast, the Council could not demand a sale until a later date but in the meantime were entitled to a higher rent than currently entitled to.

Recommendation 3 was whether the Council wished to trigger the agreement in either its existing or revised form.  Officers had recommended all three actions as they were all financially advantageous to the Council and optimised the prospects for the film studio to be developed over the short to medium term.

RESOLVED –

1.                 That an extension to the date by when the Council must declare the existing Put and Call Notice (“P&C”) live be authorised.

2.                 That the variation of the terms of the existing Put and Call Notice as set out in the confidential annex be authorised, including:

(a)               Delaying the date that the Council can service its Put option; and

(b)               Permitting Wycombe Film Studio (“WFS”) to serve its Call option as soon as the P&C is live, providing the Council’s revised financial position is no worse than that of November 2022.

3.                 That the P&C be declared live, once in its final form, thus enabling the Council to receive the capital receipt form WFS as detailed in the confidential annex.

4.                 That authority to take the actions to implement recommendations 1-3 above be delegated to the Service Director for Property and Assets, in consultation with the Cabinet Member for Accessible Housing and Resources and the Service Director for Finance (Section 151 Officer), it being noted that the capital receipt will be retained for income generation – initially form the interest received on the capital.