Contract award notice
Results of the procurement procedure
Section I: Contracting
entity
I.1) Name and addresses
Knowsley Metropolitan Borough Council
2nd Floor, Municipal Building, Archway Road
Huyton
L36 9YU
UK
Contact person: Mike Dearing
Telephone: +44 1514433672
E-mail: mike.dearing@knowsley.gov.uk
NUTS: UKD7
Internet address(es)
Main address: www.knowsley.gov.uk
I.4) Type of the contracting authority
Regional or local authority
I.5) Main activity
General public services
Section II: Object
II.1) Scope of the procurement
II.1.1) Title
Development of Retail offering in Kirkby Town Centre
II.1.2) Main CPV code
45210000
II.1.3) Type of contract
Works
II.1.4) Short description
As part of the Knowsley Metropolitan Borough Council’s (the ‘Council’) ‘Strategy for Knowsley 2016-2020’, the Council committed to delivering a new retail offering in Kirkby town centre in order to regenerate the area. The Council identified a number of sites in the town centre area, that it wished to purchase in order to achieve its regeneration objective. The sites were owned by St Modwen Developments (Kirkby 2) Ltd (‘St Modwen’). It was a condition of sale of the sites that the Council entered into a development management agreement with St Modwen under which St Modwen would design and build a retail development and manage the leasing of that development. The value shown in the section below is the current estimated value but may vary upwards or downwards.
II.1.6) Information about lots
This contract is divided into lots:
No
II.1.7) Total value of the procurement
Value excluding VAT:
21 500 000.00
GBP
II.2) Description
II.2.2) Additional CPV code(s)
45111000
45351000
45213111
65000000
71220000
71312000
90700000
71530000
70130000
79100000
44212381
II.2.3) Place of performance
NUTS code:
UKD7
II.2.4) Description of the procurement
The Council has acquired further land interests in Kirkby Town Centre to facilitate regeneration. These were Kirkby Town Centre, on land north of Cherryfield Drive, Kirkby; the Shopping Centre known as St Chads Parade; and a bare development site known as land to the south of Cherryfield Drive (which together comprise the ‘Sites’).
The Sites are in Kirkby Town Centre. The Sites were previously owned freehold and long leasehold by St Modwen who agreed to sell the Sites to the Council conditional on the Council entering into the Development Management Agreement (‘DMA’) with St Modwen.
Under the terms of the DMA, St Modwen will be responsible for the redevelopment of Kirkby Town Centre. This will include an obligation to procure, manage, monitor and supervise the design, construction and completion of a new retail development to be anchored by a Morrisons supermarket and, more particularly defined under St Modwen’s planning consent, authorising the erection of a mixed use development comprising a foodstore and non-food retail shops (Use Class A1) food and drink uses (Use Classes A3/A5), petrol filling station, car parking, landscaping, highways improvements and other associated works (including 3 electricity substations) on land bound by Norwich Way, Hall Lane, County Road and Irlam Drive, and the construction of a car park with ancillary works on land off Cherryfield Drive and Cherryfield Crescent dated 9.11.2017 and was issued on 20.11.2017 and referenced 17/00559/FUL) as amended by a further planning permission (referenced 19/00228/FUL) issued on 12.11.2019.
St Modwen as the previous owner of the Sites concluded pre-lets with 3 tenants, conditional on construction of the relevant units. Under the DMA St Modwen are also to be responsible for managing the leases of un-let space in the new retail development. The DMA also includes provision for St Modwen carrying out car park works on the land to the South of Cherryfield Drive.
St Modwen have concluded the terms of a JCT contract to design and construct the development with a main building contractor, GMI Construction Group plc (‘GMI’). St Modwen have also appointed letting agents. Design consultants have already been or will be selected by St Modwen and/or GMI. St Modwen are obliged to procure collateral warranties (containing step in rights) in favour of the Council from the key design consultants, employer's agent and GMI.
It is the intention to start the works covered by the DMA in December 2019.
II.2.5) Award criteria
Price
II.2.11) Information about options
Options:
No
II.2.13) Information about European Union funds
The procurement is related to a project and/or programme financed by European Union funds:
No
Section IV: Procedure
IV.1) Description
IV.1.1) Type of procedure
Award of a contract without prior publication of a call for competition
Justification for selected award procedure:
The procurement falls outside the scope of application of the Directive
Explanation
The Council relied on Regulation 32(2)(b)(iii) to enter into the Development Management Agreement with St Modwen.
As part of the Council’s ‘Strategy for Knowsley 2016-2020’, the Council committed to developing sustainable town centres. As part of this the Council would deliver a new retail, leisure and evening economy offering in Kirkby town centre and in particular the provision of a retail foodstore. Kirkby is a town of over 41 000 population. There is limited space suitable for this type of development within the existing town centre.
In order to meet this commitment the Council needed to acquire land in and around the existing town centre in order to regenerate Kirkby town centre. St Modwen were the freehold and long leasehold owner of several strategic plots in Kirkby town centre that the Council wished to acquire. There were no other strategic land owners within the centre other than the Council and St Modwen. The sites that the Council acquired from St Modwen are on land north of Cherryfield Drive, Kirkby; the Shopping Centre known as St Chads Parade; and a bare development site known as land to the south of Cherryfield Drive (‘the Sites’) This notice concerns the Sites. St Modwen had exclusive rights over the Sites as the holder of the freehold and long leasehold interest with the reversion vested in the Council. St Modwen agreed to the sale of the Sites to the Council, despite their existing exclusive rights, on the express condition that the parties enter into a Development Management Agreement simultaneously to the sale and purchase agreement. The Development Management Agreement obliges St Modwen to deliver the works for the Kirkby town centre retail development together with a number of design and build services. St Modwen are also responsible for managing the leasing of the development.
The Development Management Agreement will deliver the Council’s commitment. This site already has the benefit of planning permission for a retail park and has sufficient scale to deliver what is required by the planning permission in terms of parking, servicing and units.
This Development Management Agreement also commits St Modwen to delivering 3 significant tenants who are already signed up to take leases within the retail park.
There was no other site of equivalent scale in the town centre that could have been delivered in the same timeframe at the same cost whether by private acquisition or by utilising CPO powers. The Council concluded that there would be little benefit in undertaking such a development from scratch in an alternative area as any new scheme would fail through competition with the current site. There was not sufficient capacity within Kirkby for 2 such retail parks. The Council therefore had no option but to proceed with this transaction, bound by the position of St Modwen which has existing exclusive rights over the Sites, to ensure that the development was carried out without further delay which would be likely to result in detriment to the local area and local economy.
IV.1.8) Information about Government Procurement Agreement (GPA)
The procurement is covered by the Government Procurement Agreement:
No
IV.2) Administrative information
IV.2.1) Previous publication concerning this procedure
Notice number in the OJ S:
2019/S 216-529280
Section V: Award of contract
Title: Development of Rental offering in Kirkby Town Centre
A contract/lot is awarded:
Yes
V.2 Award of contract
V.2.1) Date of conclusion of the contract
27/11/2019
V.2.2) Information about tenders
Number of tenders received: 1
The contract has been awarded to a group of economic operators:
No
V.2.3) Name and address of the contractor
St Modwen Developments (Kirkby 2) Ltd
Birmingham
UK
NUTS: UKG31
The contractor is an SME:
No
V.2.4) Information on value of the contract/lot (excluding VAT)
Total value of the contract/lot:
: 21 500 000.00
EUR
V.2.5) Information about subcontracting
The contract is likely to be subcontracted
Short description of the part of the contract to be subcontracted:
Under the DMA St Modwen are obliged to award a building contract to GMI and manage it to deliver the development. Specialist construction contractors will undertake specialist works when necessary. St Modwen will sub-contract professional services necessary for a design and build contract and will appoint letting agents in respect of the requirement to manage the leasing of the development.
Section VI: Complementary information
VI.3) Additional information
The Council relied on Regulation 32(2)(b)(iii) to enter into the Development Management Agreement with St Modwen.
As part of the Council’s ‘Strategy for Knowsley 2016-2020’, the Council committed to developing sustainable town centres. As part of this the Council would deliver a new retail, leisure and evening economy offering in Kirkby town centre.
The Council wished to acquire land in and around the town centre in order to regenerate Kirkby town centre. St Modwen were the freehold and long leasehold owner of several strategic plots in Kirkby town centre that the Council wished to acquire. There were no strategic land owners within the centre other than the Council and St Modwen. The sites in question are on land north of Cherryfield Drive, Kirkby; the Shopping Centre known as St Chads Parade; and a bare development site known as land to the south of Cherryfield Drive (‘the Sites’) This notice concerns the Sites. St Modwen had exclusive rights over the Sites as the holder of the freehold and long leasehold interest with the reversion vested in the Council. St Modwen agreed to the sale of the Sites to the Council, despite their existing exclusive rights, on the express condition that the parties enter into the Development Management Agreement simultaneously to a sale and purchase agreement for the Sites. The Development Management Agreement obliges St Modwen to deliver the works together with a number of design and build services. St Modwen will also be responsible for managing the leasing of the development.
Kirkby is a town of over 41 000 population. There is limited space suitable for this development. The relevant site is in the town centre and the Council has a longstanding commitment to new retail facilities in the existing town centre and in particular the provision of a retail foodstore. These arrangements deliver that commitment. This site already has the benefit of planning permission for a retail park and has sufficient scale to deliver what is required by the planning permission in terms of parking, servicing and units.
This site has the benefit of 3 significant tenants already signed up to take leases within the completed retail park and therefore can be income producing for the Council and operational in the shortest amount of time.
There was no other site of equivalent scale in the Kirkby town centre that could have been delivered in the same timeframe at the same cost whether by private acquisition or by utilising CPO powers. There would have been no benefit in the Council undertaking such a development from scratch in an alternative area as any new scheme would have failed through competition with the current site. There was not sufficient capacity within Kirkby for 2 such retail parks.
The Council therefore had no option but to proceed with this transaction, bound by the position of St Modwen which had existing exclusive rights over the Sites, to ensure that the development is carried out without further delay (which would have been likely to result in detriment to the local area and local economy).
VI.4) Procedures for review
VI.4.1) Review body
Knowsley Metropolitan Borough Council
Huyton
UK
VI.5) Date of dispatch of this notice
24/12/2019