Agenda item

            The Committee considered the undernoted report in relation to the Shaftesbury Community and Recreation Centre:

“Purpose of the Report

      To advise the Committee of a situation which has developed in relation to the carrying out of extension works at the Shaftesbury Recreation Centre (SRC) and steps which have been taken by the Director of Legal Services in order to protect the Council’s legal interests. 

Relevant Background Information

      The land upon which the SRC is situated was acquired by the City Council in 1980.  At that time there were old industrial buildings on the site which were subsequently, apparently, bulldozed into the ground as part of the demolition exercise.  It now appears that the material which was crushed into the ground included an old corrugated asbestos roof, comprising of white asbestos material, which is relatively low risk but is nevertheless required to be dealt with under current legislation as a hazardous material.

      In October 2000, the Recreation Centre and adjoining ground was leased for a ten year term to the Lower Ormeau and Markets Community Forum, with the building being managed as a community/recreation centre by the Lower Ormeau Residents Action Group (LORAG).  LORAG subsequently approached the Council seeking a longer lease in order to allow it to carry out a major scheme of alteration and extension works to the centre and the Council agreed to grant an extended lease of twenty-five years, running from February 2009, for the purpose of facilitating the scheme.  The cost of the scheme is approximately £1.7M plus fees and VAT, and LORAG applied for and received a suite of funding from Sport NI (SNI) and DSD/BRO.

      When the construction works commenced in January 2009, fragments of the white asbestos material (the presence of which was hitherto unknown) were discovered in the course of the excavations for the ground beams at the rear of the site. 

      The consultants involved in the project were then tasked with costing the excavation, testing and removal of the contaminants from the site and the costings which they have produced currently amount to £96,500, although this figure does not include VAT and fees, so that the gross additional cost could potentially amount to a sum of approximately £120,000. 

      The main difficulty which has arisen as a result of the discovery of the contaminants has been in relation to the funding viability of the scheme, given budgetary constraints which SNI and DSD/BRO are operating under and, at one stage, the entire scheme was under clear threat of having to be closed down.

      However, discussions then ensued between the statutory agencies, namely the Council, SNI and DSD/BRO in an endeavour to ensure that the works could proceed at the minimum additional cost and on the basis that all parties agreed to work together in order to find a solution to dealing with the question of the additional costs.

      A proposal has now been tentatively agreed that, as between SNI/DSD on the one hand and BCC on the other hand, it is agreed that for purposes of negotiation, all parties will operate on the basis that there will be a cap on the additional expenditure amounting to the sum of £100,000.  DSD have agreed to contribute £20,000 of this additional cost, and the proposal now is that BCC and SNI will share the remaining sum of £80,000 between them on an equal basis.

      The foregoing suggested settlement is, however, conditional on the basis that these sums will be reduced by any sums left outstanding upon completion of the works and which still remain in the contract contingency funds.

      The Director of Legal Services has obtained advice from Senior Counsel as to the appropriateness of the Council participating in such a rescue arrangement, and he will verbally update the Committee in relation to that advice, will appropriate recommendations flowing there from. 

Resource Implications

      The Council would be required to contribute up to a maximum of £40,000 towards remedial/ disposal costs, subject to any reductions becoming possible as a result of any contributions which might be available from the contract contingency funds.

Recommendations

      It is recommended that the Committee notes the current position and takes steps on the basis of advice from the Director of Legal Services.

Key to Abbreviations

      BRO       –   Belfast Regeneration Office

      DRD       –   Department for Regional Development

      LORAG –   Lower Ormeau Residents Action Group

      SNI         –   Sport Northern Ireland

      SRC       –   Shaftesbury Recreation Centre.”

            The Director of Legal Services elaborated on the main aspects of the report and pointed out that the advice which had been received from Senior Counsel had indicated that the proposal in relation to the £40,000 contribution on the terms outlined would represent a favourable outcome for the Council.

            After discussion, the Committee agreed that the Council contribute up to a maximum of £40,000 towards the remedial/disposal costs associated with the hazardous material, subject to any savings which became available from the contract contingency funds.