1.    That members support the proposals for Cascades Leisure Centre, as set out in the report; and

2.    Delegated authority is given to the Director (Communities) in consultation with the Leader and Director (Corporate Services in the role of S151 officer) and the Monitoring Officer; to take all necessary practical, financial and legal actions required to deliver the leisure centre within agreed budgets (inclusive of but not limited to entering into the relevant formal legal agreements required to engage consultant support, agree and commence the procurement process, evaluate and appoint successful contractors, approve the design, commence construction and certify the acceptance of completion of works.

The Director (Communities) informed Members thatthe Council had commissioned Knight, Kavanagh, & Page (KKP) to undertake a feasibility study of the Council owned leisure centres, currently located at Cascades Leisure Centre and Cygnet Leisure Centre. The key focus of the study was to refresh the Council’s Indoor Leisure Strategy and to redefine its needs and options for investment in its facility portfolio.

The study needed to take account of a changed landscape from the original strategy which had been completed in 2016. These changes included the developments of the Lower Thames Crossing, potential developments undertaken in Ebbsfleet Development Corporation and the proposed Garden City, as well as the potential impact of Covid-19 on the leisure industry.

The study was completed over two phases: -

·         Phase One – a refresh of the 2016 Indoor Strategy and based on the refreshed strategy findings; and

·         Phase Two - a feasibility study to investigate whether/how to replace one or both facilities, in a process which incorporated evaluation of capital and revenue costs, as well as a management options appraisal to assist the Council in deciding on the optimal way forward.

The main conclusions of the feasibility study were summarised in section two of the report.

The feasibility study recommended replacing the existing Cascades Leisure Centre at its existing site to address the Borough’s current facility needs assuming that the proposals at Ebbsfleet Garden City for a landmark leisure facility was also delivered as a potential replacement for Cygnet Leisure Centre. As the proposals for a hub leisure facility at Ebbsfleet Garden City were unknown at this stage, the Council had agreed to concentrate on the redevelopment options of Cascades Leisure Centre.

A condition survey of the centre was completed in June 2019 by Set Square Surveyors Ltd. This confirmed that there was a requirement for £464,000 of work over the next two years alone, described as ‘critical’ to the operation of the facility.

In respect of whether to pursue a new-build centre as opposed to a major refurbishment and remodelling programme at Cascades, with regards to the latter previous work had been undertaken which suggested a cost of circa £14m at the site. However, this did not consider any substantial remodelling of the swimming facility, which in itself will be essential to meet the Borough’s existing and future shortfall in provision, specifically with regards to lane swimming and learner pool provision. Whilst a new build will have a higher capital cost, the study outlined that this should be balanced against the significant benefits provided in terms of its attractiveness, potential for co-location of health and wellbeing spaces, and greater capacity to generate revenue via a more cohesive and modern orientation of spaces. It was also important to recognise that development of a new-build facility will enable the Council to further deliver its ambition for its operations to be net-zero by 2030.

In terms of where the new facility should be located, alternative sites for development in the Borough were extremely limited, with the existing urban area being particularly constrained and focus on available sites being placed on delivering the Borough’s housing requirements. Cascades Leisure Centre’s existing car park had emerged as the highest ranked site from the appraisal as it benefits from being owned by the Council and had the potential to create good visibility and site frontage of the new leisure centre. However, this site would require the closure of the on-site Regan’s Bar and associated tenancy to enable development to take place. It should be noted that this location will not affect any other tenants currently on this site.

An initial capital cost estimate of circa £33.8m had been identified. This was inclusive of an allowance of £3.5 million for external works to the site which would include external landscaping, car parking including coach drop off area and creation of an Active Environmental area. The sum did include a 10% contingency amount but did not take into account general inflationary pressures nationally, particularly within the construction industry.

The Council had a number of options in regards to funding the capital cost of the project. The proposal would be to finance the new leisure centre from a combination of the leisure centre earmarked reserve, attributable S106 contributions, capital receipts, revenue reserves and/or external grant contributions (where these are able to be secured), with the remaining balance funded through external borrowing funded from the forecast improved revenue income from the site. Should the improved revenue income from the site not be sufficient to meet the full cost of borrowing, the Council will need to consider other options for how these costs may be met in the longer term.

KKP had produced an indicative revenue business plan for the new leisure centre which was based on a range of key assumptions (both income and expenditure). The plan drew upon KKP’s understanding of the local area through past and current work and a range of live operational examples of where and how other modern leisure centres effectively generate income from their key activity areas. The indicative also assumed that performance of the centre would have returned to pre-COVID levels when it becomes operational.

The revenue business plan had been prepared on the basis of two potential operating models for consideration based on information provided by KKP (a) a trust management option or (b) management by an external (commercial) operator.

The Council’s Finance Team had analysed and reviewed the indicative Revenue Business Plan and appraised the two operating models for consideration based on information provided by KKP. The indicative revenue projections indicate that both operating options would generate a surplus position during the first five years of operation.

In order to deliver on the next stage, the Council will be required to undertake procurement of a range of services in respect of consultancy (design, planning, leisure) and construction.

As set out in the report, the approach will be in a two- stage manner, with the procurement of consultancy services being separate from that of selecting a construction partner.

Options regarding leisure centre development in Gravesham going forward, will also need to take account of the Lower Thames Crossing (LTC) programme, which may have a degree of overlap with the leisure centre construction.

The Cabinet welcomed the report and the benefits that a new leisure centre would bring to the community whilst meeting the Borough’s existing and future shortfall in provision.

The Cabinet stated that the Council must explore all avenues of funding particularly S106 and external grant contributions. The cost estimates must also include a contingency for inflation in construction.

Resolved that

1.    Members support the proposals for Cascades Leisure Centre, as set out in the report; and

2.    delegated authority be given to the Director (Communities) in consultation with the Leader and Director (Corporate Services in the role of S151 officer) and the Monitoring Officer; to take all necessary practical, financial and legal actions required to deliver the leisure centre within agreed budgets (inclusive of but not limited to entering into the relevant formal legal agreements required to engage consultant support, agree and commence the procurement process, evaluate and appoint successful contractors, approve the design, commence construction and certify the acceptance of completion of works.

Note: Cllr Shane Mochrie-Cox left the Chamber during consideration of this item.