Forward Funding Agreement

Description

On 12 November 2020 Warrington Borough Council entered a Forward Funding Agreement (FFA) with English Cities Fund (acting by its General Partner, ECf (General Partner) Limited) (Developer) in respect of a site currently owned by the City Council of Salford (the "Landowner") known as Plot B7 New Bailey Square, New Bailey, Salford ("Site"). Once developed the Site will comprise new Grade A office accommodation of approximately 175,592 sq ft NIA (the "Development") which shall be leased to a commercial tenant for a 20 year period from completion. The Site forms part of a wider development area known as "New Bailey" which has been developed on an exclusive basis by the Developer pursuant to an underlying Development Agreement dated 15th December 2006 between the Developer and the Landowner ("Development Agreement"). Under the terms of the Development Agreement only the Developer can bring the Site forward for the Development and the Landowner cannot deal with any developer other than the Developer. The Development Agreement is due to expire in December 2026. Under the terms of the Development Agreement the Developer has an exclusive right to put forward a "development proposal" in respect of the land forming the wider development area, New Bailey and if approved by the Landowner, develop New Bailey on a phased basis during the term of the Development Agreement (unless terminated earlier). The Developer has subsequently brought forward the Site for development and has agreed with WBC that the latter shall fund and acquire the Site upon completion. No-one other than ECF can do this, and the Council cannot deal with any other developer other than ECF. The FFA was entered into at the same time as an Agreement for Lease (AfL) between WBC, the Landowner and the Developer for the grant of a 250 year headlease once the development process for the Site is concluded under the Development Agreement and the land is drawn down for the purposes of the Development. At this point the FFA will become unconditional and the Developer shall have a contractual obligation to carry out the Development in accordance with the requirements of the FFA (the Works). The AfL is conditional upon a corresponding Agreement for Underlease (AfUL) between the Developer and a commercial tenant (Tenant) who will enter into an occupational lease upon completion of the Development. It is under the AfUL that any detailed design is developed by the Developer and approved by the Tenant. Those Works have not been specified by WBC nor has WBC had nor will it have under the terms of the FFA any decisive influence over the design of those Works.