A Joint Venture (JV) is a business agreement in which the parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets. It is now common practice for councils to form joint venture organisations, to help them to access skills that they may not have in house.
The aim of the Joint Venture is to improve the economic, social and environmental well-being of Craven. The Joint Venture will aim to enable the development of new employment and housing land, increase investment for development, maximise returns and create a revolving fund for future schemes, and increase the speed of project development and delivery.
The partner for the joint venture was selected following a strict and lengthy Official Journal of the European Union (OJEU) compliant Competitive Dialogue procurement process.
Barnfield has the ability to deliver major regeneration projects that will make the difference to Craven’s economy. They have an excellent track record of partnership with other public sector joint ventures, such as in Hyndburn, Pendle, Burnley and Rossendale.
They also have considerable experience of working with third party funding organisations such as Local Enterprise Partnerships, the Heritage Lottery Fund, and the Homes & Communities Agency. This added to a greater access to external financial investment could bring the required funding to regenerate marginal or non-viable schemes.
The company is 30% owned by Craven District Council and 70% by Barnfield Investment Properties Limited and voting rights will be split 50/50.
It will be managed by six directors who will form the Strategic Partnership Board, three directors from Craven District Council and three from Barnfield Investment Properties Limited. A rotating chairman will be nominated on an annual basis. The board will be supported by a Company Secretary, a finance officer from Craven District Council. Craven District Council and Barnfield will have equal voting rights.
Any decisions taken by the Joint Venture Strategic Partnership Board relating to council or third party assets will go before the Council’s Policy Committee for approval. Any planning decisions will also go through the normal planning procedures.
The Joint Venture is currently working together on a full appraisal of all Council owned assets to develop a prioritised pipeline of potential housing and commercial regeneration projects. Third party sites will also be considered particularly where there is development and regeneration opportunity within the Yorkshire Dales National Park.
The Joint Venture will have no dedicated or directly employed staff and will pull on resources from both organisations to suit the needs of each individual project. The two points of contact for the company will be Andrew Wood, Development Manager for Barnfield, and Ian Halton, Assets & Commercial Services Manager at Craven.
The Strategic Partnership Board will be ultimately responsible for the projects undertaken by the Joint Venture. Each project will be supported by an appropriate working group that will comprise of both Barnfield and Craven staff along with external expertise as is required.
The Council will provide Board Members as noted, and economic development, financial and legal advice as requested.
Barnfield will provide a range of services including but not limited to the project development appraisals and business cases, construction on site, and project management. They will also use their supply chain to draw on architects, engineers, designers, planners, and surveyors.
Barnfield will make money through being awarded the construction elements of the projects and their share of sustainable income and profit.
The Council will be compensated by a capital receipt equivalent to the residual land value. The valuation will be carried out by the Project Working Group. It will also be compared to the Open Market Value (OMV) that is estimated independently.
They may be jointly owned or returned to the Council. It is highly unlikely that Barnfield will take ownership exclusively.
Some new properties will be sold on the open market and those that are not will be managed by the Assets & Commercial Services team within the Council.
The Joint Venture has developed a 3-year Business Plan 2017 – 2020 that has been approved by Craven District Council’s Policy Committee. The plan will be reviewed annually and renewed at the end of this period. The plan will be posted on both the Council and Company websites.
There are a number of projects that form a high level pipeline only at this moment in time. The next step is to develop a detailed project plan for each individually. A desire of the Joint Venture is to deliver a “quick win” within the first year of operation. One initial project we are developing is in Back Gate in Ingleton, an under used lorry park that will be redeveloped into six homes for sale on the open market. Another is Low Demesne, in Ingleton, which is allocated in the Local Plan and will create 22 new homes, 15 for sale on the open market and seven affordable homes.
Each project will be independently assessed and a Value for Money report will be produced.