North Yorkshire Council
Executive
15 July 2025
Whitby Maritime Training Hub Tenancies
Report of the Corporate Director of Community Development
This report contains a confidential Appendix A which contains information of the type defined in paragraph 3 of Part 1 of Schedule 12A Local Government Act 1972 (as amended) as it contains information relating to the financial and business affairs of the Council and it is considered that the public interest in maintaining the exemption outweighs the public interest in disclosing the information
1.0 PURPOSE OF REPORT
1.1 To enter into a tenancy agreement for a commercial space within the Whitby Maritime Training Hub development for the length of five years pursuant to the Whitby Urban Council Act 1905.
1.2 To request for delegated authority to be granted to the Corporate Director of Resources, in consultation with the Corporate Director of Environment, to be able to complete tenancy agreements for all commercial units within the Whitby Maritime Training Hub development.
2.0 BACKGROUND
2.1 The Whitby Maritime Training Hub (WMTH) project is one of six priority projects chosen for delivery through the Whitby Town Deal. The project received £10m in funding from the Towns Fund programme to construct a mixed-use to provide training and small business space for the maritime industry.
2.2 In January 2025 the Council’s Executive approved the decision to proceed into the construction contract. Construction began on the project on 7 April 2025 and is expected to be complete in April 2026.
2.3 Work is ongoing by officers to secure tenants for the building and establish the operator model.
2.4 This report seeks approval to proceed into the agreement to lease with an interested party that has agreed terms and progressed to agreement to lease. It also seeks approval for all future tenancy agreements decisions to be delegated to the Corporate Director of Resources in consultation with the Corporate Director of Environment.
2.5 Further details regarding the proposed tenant for the Whitby Maritime Training Hub is set out in the confidential Appendix A.
3.0 WHITBY MARITIME TRAINING HUB TENNANCIES
3.1 Following extensive negotiations, one party has progressed to the point of signing an agreement to lease for five years. This tenant is a maritime business and complies with the planning restriction of a water compatible use. In order to achieve financial security for the Council and offer the tenant reasonable terms, a five-year lease is desired. Further information on this tenant can be found in the confidential Appendix A.
3.2 There has been encouraging interest from prospective tenants for the facility, and efforts are ongoing to build on this momentum and secure further confirmed occupancy.
3.3 Further negotiations are underway with another tenant for the facility.
4.0 CONTRIBUTION TO COUNCIL PRIORITIES
4.1 The Whitby Maritime Training Hub will contribute to the following Corporate Plan objectives:
· Place and Environment:
o A clean, environmentally sustainable, and attractive place to live work and visit.
· Economy:
o Economically sustainable, and attractive place to live, work and visit.
o New and existing business can thrive and grow.
· People:
o People can achieve their full potential through lifelong education and learning.
5.0 ALTERNATIVE OPTIONS CONSIDERED
5.1 An alternative option would be to enter into a shorter-term lease with the prospective tenant. This was not considered desirable as it reduces the financial security for the Council and makes investment into the facility less desirable for the tenant. This would reduce the potential value for Whitby and the local area
5.2 An alternative to the delegated authority would be to request Executive approval for each tenancy agreement. These are likely to be in the region of ten separate agreements, relatively low individual value and come about at different times. This would make it disproportionately bureaucratic and inefficient to seek Executive approval for each separate agreement. The negotiation with potential tenants and legal and financial scrutiny are within the normal duties of the Council officers and checks on occupation are required under planning restrictions. It is therefore considered low risk and advantageous to adopt the delegated authority arrangements.
6.0 FINANCIAL IMPLICATIONS
6.1 When constructed, the Whitby Maritime Training Hub will be a Council-owned facility. In approving the award of the construction contract in January 2025, it was acknowledged that there will be a subsidy needed for the running of the facility until it attracts sufficient tenants to reach a break-even point.
6.2 Agreeing to the lease with the tenant will reduce the subsidy needed for the facility. The Whitby Urban District Council Act 1905 requires all harbour income to be ring fenced for the harbour; the rental income from the tenancies at the Hub will therefore be ring fenced.
6.3 There are no additional financial implications for approving delegated decision-making powers to the Corporate Director of Resources in consultation with the Corporate Director of Environment. All financial scrutiny will be managed under the Council’s established financial procedures.
7.0 LEGAL IMPLICATIONS
7.1 The Harbours, Docks and Piers Clauses Act 1847 limits the term of leases of harbour land forming part of the harbour undertaking to three years. The Whitby Urban District Council Act 1905 transferred the harbour undertaking to the Council’s predecessor, the Whitby Urban District Council. Section 30 of the 1905 Act gives the Council wide powers to lease land it acquired by virtue of the Act on terms and conditions as it may think fit, notwithstanding anything contained in any other Act. The Council is therefore able to grant leases of land forming part of the harbour undertaking in excess of three years.
7.2 Functions under the Whitby Urban District Council Act 1905 are Local Choice Functions which are reserved to the Council’s Executive by virtue of the Constitution.
7.3 The building is located within Flood Zone 3b and the planning permission requires the development to be constructed and brought into use in accordance with the flood risk assessment and can only accommodate uses which are defined as 'water compatible' by the National Planning Policy Framework. Any tenants of the Hub must therefore meet this planning restriction in terms of use.
8.0 EQUALITIES IMPLICATIONS
8.1 There are no equalities implications from agreeing to the lease or giving delegated decision-making powers to the Corporate Director of Environment. An Equalities Impact Assessment screening form has been attached as Appendix B.
9.0 CLIMATE CHANGE IMPLICATIONS
9.1 There are no climate change implications from agreeing to the lease or giving delegated decision-making powers to the Corporate Director of Environment. An Environmental Impact Assessment has been attached as Appendix C.
10.0 REASONS FOR RECOMMENDATIONS
10.1 The recommendation is to progress into the five-year lease with the prospective tenant as it supports and fulfils the rationale for the project supporting the maritime industry in Whitby and provides a long-term source of income to support the facility and reduce the subsidy required for its operation.
10.2 Not proceeding into the agreement to lease for five years would result in the loss of this revenue and increase subsidy costs the Council would need to pay towards the operation of the facility.
10.3 Granting delegated decision-making powers to the Corporate Director of Resources in consultation with Corporate Director of Environment will remove the need to bring further requests to enter into leases to the Executive, which will mean prospective tenants can enter into leases and take up occupancy more quickly, helping us to deal with matters professionally and expediently and aiding cash flow.
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11.0
11.1
11.2 |
RECOMMENDATION (S)
To seek approval from the Executive to enter into the agreement to lease for five years with the prospective tenant.
To also seek approval from the Executive to give delegated decision-making power on all future tenancies over 5 years for the Whitby Maritime Training Hub to be granted to the Corporate Director of Resources in consultation with the Corporate Director of Environment.
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APPENDICES:
Appendix A – Confidential Appendix
Appendix B – Equalities Impact Assessment
Appendix C – Climate Change Impact Assessment
BACKGROUND DOCUMENTS: None
Nic Harne
Corporate Director – Community Development
County Hall
Northallerton
Report Author – Ellis Cooper
Presenter of Report – Nic Harne
Note: Members are invited to contact the author in advance of the meeting with any detailed queries or questions.