 |
|
| LVRPA executive |
|
| ||
| COMMERCIAL DEVELOPMENT PROGRESS REPORT | ||
| Presented by the Head of Commercial Development | ||
| EXECUTIVE SUMMARY | ||
| The purpose of this report is to update Members on progress in the Authority's commercial development activity. | ||
| RECOMMENDATIONS | ||
| ||
| BACKGROUND | ||
| 1 The Authority has set itself specific financial targets to generate additional income (£400K per annum) to assist in delivering the Business Plan over the next three years and longer term to reduce the dependence on the levy. It is envisaged that £150k of this additional income will be generated from existing facilities/services and £250k from new business opportunities. | ||
| 2 In order to achieve the latter (£250k pa from new business opportunities), a Head of Commercial Development (HCD) was recruited in February 2010, Following a period of investigation and consultation, a number of priority areas have been identified. | ||
| 3 The resulting work programme which set out the activities of the HCD, identified key areas of focus, set critical milestones and timing and indicated the likely net A income from each area was approved by the Executive Committee on 29 Jun^ 2010. | ||
| 4 It was agreed that the work programme will be regularly updated by the HCD and managed on a monthly basis by the officer Business Development Group (BDG). The BDG is chaired by the Director of Finance. | ||
| 5 The work programme will also be monitored by the Management Team on a monthly basis with a progress report to the Executive Committee bi-monthly. | ||
| 6 The bi-monthly progress report is attached at Appendices A & B to this report SPECIFIC PROGRESS " OLYMPIC RELATED | ||
| 7 All income figures below are net and subject to commercial agreements. | ||
| 8 Temporary camping and amusements at Water Works Golf Course. We are in tenancy discussions with three companies that want to rent the site - one for amusements and two for camping. We have taken the decision to partition the site so that the amusement park can be negotiated (see 9 below) in a timely manner. The temporary use of the site comes under the Authority's provision for granting tenancies. Officers will ensure that this process produces best consideration for the Authority by checking with the Estate Departments evaluation of the site and, where there are competitive tenants, by using a sealed bid process. | ||
| 9 Temporary campsite at Water Works Golf Course. Technical discussions and site visits have now taken place with the heads of both interested consortia. A sealed bid process as referred to above (paragraph 8) is under way. | ||
| 10 An agreement will be in place before November based on a rental income of approx £1,000 per day plus a profit share. Total income is planned to be in the region of £60,000. | ||
| 11 Temporary amusement park at Water Works Golf Course. We have quoted the interested party on the same basis as paragraph 10 and negotiations are ongoing. The tenancy agreement should be negotiated by October 2010. Total income is planned to be in the region of £40,000. Payment terms are being discussed as part of the commercial negotiation. | ||
| 12 Sochi 2014 Showcase. We have been approached by a marketing company representing SOCOG (The Sochi Organising Committee for the 2014 Winter Olympic & Paralympic Games), who have been asked to find a venue to showcase the forthcoming winter Games during the summer Games in 2012, They are interested in siting this event at the Lee Valley Ice Centre (LVIC). We have provided information and a quotation based on the limited information we have so far. Having spoken to the agency last week, I believe we will not hear anything until late in 2010. Income £125,000. | ||
| 13 Venue Naming Rights. We have been in technical discussions with three sponsorship consultancies with a view to prepare a tender for support in the following areas: | ||
| a. Value of naming rights at Olympic facilities. b. Desirability of adopting the word Olympic in the names of our Olympic facilities. | ||
| c. Preparation of sponsorship propositions. | ||
| d. Research into appropriate partners. | ||
| Depending on the preferred procurement approach, I intend to appoint either one consultant or more before the end of October. | ||
| 14 We are in discussion with the British Olympic Association about the adoption of the Olympic name into our facilities. | ||
| 15 We are in discussions with the Olympic Park Legacy Company to explore whether a common approach to Olympic sponsors might produce a better return for each organisation. The discussions are at an early stage and no conclusions have been reached. | ||
| SPECIFIC PROGRESS - NON-OLYMPIC RELATED | ||
| 16 Accommodation - Lea Bridge Road. We have been approached by a firm of surveyors representing a budget hotel chain. After viewing land at the front of the LVIC, a developer has been found that is interested in taking the project further. We have a meeting with the developer and their surveyors on 19 August 2010. Potential income is in the region of £2 - 300,000 per annum for 25 years. In the event that the technical discussions prove fruitful, a procurement process will be required which means that it is unlikely that a deal could be negotiated before early 2011. A proposal for this site will require planning permission and will have to have regard to the design framework prepared jointly with the local authorities and the Authority's own work on the future of its estate in the vicinity of Lea Bridge Road. | ||
| 17 Broxbourne Riverside. The company that is likely to provide amusements during 2012 has also expressed an interest in taking over this site as a holiday park. Negotiations are on hold while we conclude the agreement on the Water Works but interest remains high. We have sent new photographs now that the landscaping works at the site have been completed. Income likely to be in the region of £30,000 per annum. Given the ongoing discussions concerning the Water Works and the need for some market testing, an agreement is unlikely to be in place before February 2011. | ||
| 18 Advertising. Following approval to explore this income stream at the June Executive, we have been in further talks with JC Decaux (JCD). The company is very keen to work with the Park Authority and they already have a number of sites in mind. The site on the A12 for which they have planning consent is inside the area leased to the Olympic Delivery Authority until after the 2012 Games, but the company wishes to consider other sites. The income from this activity is likely to be in the region of £80,000 per annum with potentially far greater rewards in the event that several sites of significant commercial interest can be identified. At our last meeting we agreed the following actions: | ||
| e. Draft Heads of Terms to be prepared - JCD.
f. Investigate whether all of the A12 land (including the river bank) is in ODA land - LVRPA. g. If so, investigate possibility of the land being used before hand back, possibly with the rental income shared between LVRPA and LOCOG - LVRPA. h. Arrange tour of the regional park to look at sites that may be of interest for display advertising - Joint. i. Both parties are keen to progress this in a timely manner and we aim to agree Heads of terms by October 2010. | ||
| 19 Weddings/Civil Partnership ceremonies at Myddelton House. An internal team has been set up to progress this and Enfield registrars have made an informal site visit. We have been advised that, whilst the market is very competitive; two things that are highly sought after are in short supply; 1) Venues that can perform the ceremony outside and» 2). Venues that can offer both the ceremony and the reception. Both of these markets can be satisfied at | ||
| Myddelton House. In order to minimise disruption and maximise our return, our current preference is for fewer, higher cost weddings. Next steps are to apply for a licence which is contingent on specifying the wedding site - this will be done when the current gardens project is complete. Given the planning time involved in most weddings these days, it is likely that extensive marketing through 2011 will lead to our first ceremonies being performed in the summer of 2012. However, we will be in a position to take earlier bookings if they Potential income in the region of £30,000 per annum. | ||
| OTHER PROJECTS UNDER CONSIDERATION | ||
| 20 Accommodation at Pickett's Lock. With the future of Pickett's Lock being considered, we are aware of the need to consider long-term hotel development as part of the site-plan. | ||
| 21 Olympic accommodation at existing campsites. This will be pursued via the BDG. It is imperative that we consider appropriate fees and charges during the Games period to ensure that we maximise return. | ||
| 22 Merchandising. We are considering two options:
a. We are in discussions with LOCOG about the possibility of selling 2012 merchandise. b. We are considering developing our own merchandise, this is contingent on completion of the brand review. | ||
| 23 Hostels and low-impact camping throughout the rural areas of the park. This activity is under consideration to follow on from current areas of focus. Potentially a good income generator post Olympics. | ||
| COMMERCIAL APPROACH | ||
| 24 Throughout negotiations with potential commercial partners we aim to maximise
income and minimise risk in the following ways;
a. By seeking a profit share from the end user to maximise return. b. By seeking deposits on signature and at other points in advance of occupation where possible to aid cash flow. c. By seeking a base level of rent to guarantee a proportion of the income. d. Planning permission where required will be the responsibility of the tenant. | ||
| ENVIRONMENTAL IMPLICATIONS | ||
| 25 Planning permission and advertisement consent may be required for some of these proposals depending on several factors including their exact location on these sites and the length of time which operators intend to use them. The environmental implications of these uses will be assessed during the planning process. The Authority's planning team will assist operators wherever possible. | ||
| FINANCIAL IMPLICATIONS | ||
| 26 In the event of success, there could be significant financial benefit to the Authority. | ||
| 27 Resources, if required, will need to be identified from the current capital programme where existing funds exist, however, these will need to be approved on a scheme by scheme basis by Members and demonstrate a reasonable pay back period on the investment. | ||
| HUMAN RESOURCE IMPLICATIONS | ||
| 28 There are no human resource Implications arising directly from the recommendations in this report. | ||
| LEGAL IMPLICATIONS | ||
| 29 There are no legal implications arising directly from the recommendations in this report. | ||
| RISK MANAGEMENT IMPLICATIONS | ||
| 30 If the Authority doesn't secure additional income on the scale anticipated then the financial targets agreed in it's 3 year business plan are prejudiced. | ||
| FUTURE REPORTS
31 Members will receive the following reports: a. Commercial Policy - Executive Committee, 23 September 2010 b. Sponsorship Policy - Executive Committee, 23 September 2010 | ||
Author: Adam Pritchard, 01992 709 884, apritchard@leevalleypark.org.uk APPENDICES ATTACHED | ||
| Appendix A Commercial Development Work Programme 2010-2012 (Summary) | ||
| Appendix B Commercial Development Work Programme 2010-2012 (Action Plan) |
| LIST OF ABBREVIATIONS | |
| HCD | Head of Commercial Development |
| BDG | Business Development Group |
| SOCOG | The Sochi Organising Committee for the 2014 Winter Olympic & Paralympic Games |
| LVIC | Lee Valley Ice Centre |
| JCD | JC Decaux |
| LOCOG | The London Organising Committee for the 2012 Olympic & Paralympic Games |
| ODA | Olympic Delivery Authority |
| LVRPA | Lee Valley Regional Park Authority |
Appendix A to Paper E/79/10 COMMERCIAL DEVELOPMENT WORK PROGRAMME 2010 - 2012 (SUMMARY) |
| Activity | Site | Potential Agreed Date | Income Received date | Perm. /Temp. | Likely? | Priority | Cap ex. | Ongoing income | One off income |
| Naming Rights/Corporate Partnerships | Velo Park | Mar-2011 | May-2013 | P | H | 1 | 20 | 200 | |
| Holiday Park | Broxboume Riverside | Feb-2011 | Jun-2011? | P | H | 1 | 0 | 30 | |
| Accommodation | Lea Bridge Road | Feb-2011 | Aug-2011 | P | H | 1 | 0 | 200 | |
| Advertising | Park-Wide | Oct-2010 | Jan-2011 | P | H | 1 | 0 | 80 | |
| Temporary Campsite | WaterWorks/Lea Bridge Road | Nov-2010 | Jul-2012 | T | H | 1 | 10 | 60 | |
| Temporary Amusement Park | WaterWorks/Lea Bridge Road | Oct-2010 | Jul-2012 | T | H | 1 | 0 | 40 | |
| Theme Park | Showground | TBA | TBA | P | H | 2 | 10 | 100 | |
| Weddings | Myddelton House & Gardens | TBA | Summer 2012 | H | 2 | 5 | 30 | ||
| Corporate Hospitality | Lee Valley White Water Centre | Apr-2011 | May-2011 | P | I | 1 | 5 | 25 | |
| Naming Rights/Corporate Partnerships | Lee Valley White Water Centre | Mar-2011 | May-2013 | P | I | 1 | 10 | 100 | |
| Corporate Partnerships | Park-Wide | Mar-2011 | May-2013 | P | I | 1 | 15 | 100 | |
| Temporary Campsite | Lee Valley Leisure Pool Site | Jan-2011 | Jul-2012 | T | I | 1 | 0 | 28 | |
| Sochi 2014 Showcase | LVIC | Jan-2011 | Oct-2012 | T | I | 2 | 0 | 125 | |
| Naming Rights/Corporate Partnerships | Eton Manor | Mar-2011 | May-2013 | P | I | 3 | 15 | 35 | |
| Temporary Campsite | Gunpowder Park | Jan-2011 | Jul-2012 | T | L | 2 | 0 | 28 | |
| Temporary Campsite | Pickett's Lock | Jan-2011 | Jul-2012 | T | L | 2 | 0 | 28 | |
| VIP Car Park/Arts & Water Festival | Three Mills Green | Dec-2010 | Jul-2012 | T | L | 2 | 0 | 50 | |
| Theme Park | Gunpowder Park | TBA | TBA | P | L | 3 | 0 | 100 | |
| Corporate Hospitality | Velo Park | May-2013 | Aug - 2013 | P | L | 3 | 5 | 5 | |
| Corporate Hospitality | Eton Manor | May-2013 | Aug - 2013 | P | L | 3 | 5 | 5 | |
| LOCOG Training venue | Leyton Marsh | Jul - 2012 | T | L | 3 | 0 | 30 | ||
| Likelihood high | (sub totals) | 45 | 640 | 100 | |||||
| All | (sub totals) | 100 | 1,010 | 389 | |||||
|
Figures subject to revision as commercial terms become clearer | |||||||||
| Likelihood Key: | |
| Low | L |
| Medium (Intermediate) | I |
| High | H |
| Site | Activity | P r i o r i t y | Perm/ Temp/ Long Term | Current status | Constraints | Next Actions | Date | Offi -cer | Potential Comple -tion Date | Income Received Date | L i k e l i h o o d |
| WaterWorks/Lea Bridge Road | Temporary Campsite | 1 | T | Two suppliers still interested. Decision taken to partition the site and let out one section for amusements (see below) and one for camping. | Planning permission. Internal Procedures. Inability of suppliers to work together. | Sealed bid process Initial discussions v. positive. Invitation to present plans to Development Committee at LBWF | 27-Aug-10 TBA | AP AP | Oct -2010 N/A | 01/07/2012 (deposite of 35% on sig?) | H |
| WaterWorks/Lea Bridge Road | Temporary Amusment Park | 1 | T | Funporium interested in using the site during 2012 Games. AP met with CEO and his lawyer on 23 July 2010 and proposed a rent of £1,000 per day plus a profit share. That is being considered. | Amount of land required. Price. | Await Funporium response | TBA | AP | Sep -2010 | Deposit on Sig | H |
| WaterWorks/Lea Bridge Road | Accommodation | 1 | P | A developer has come forward via Strettons -meeting 19 August to look at proposals and intial plans. Strettons have been made aware of Chair's concerns. | Exec opinion. Low value of site. | Metting with developers | 19-Aug-10 | AP | Dec-2010 | TBA in 2011 (poss deposit early in 2011?) | H |
 |