EC Meeting Papers March 2018

that could add between £100-£150k to its cost. So from a cost benefit point of view if we are to build a new building it is far more advisable to build it now, even it remained empty for a while. In any event planning permission requirements state that the services to the new building have to be laid as part of this project, this year. 30 If we want to generate maximum income from the Quorn site strategically, it is clear to me that we should build a ‘new building’ as planned in 2018. Our ability to do so depends on the VAT issue and the cost of build issue. 31 If the VAT Issue can be resolved and the cost of build reduced, we should build. If they can’t we shouldn’t. My view is that it is to our advantage to try and make a new building work. A new building will in any event add value to the site and will remain a future asset. 32 If we build a new building in this main project phase we have time consider options of use, but give ourselves a better option on site value and cost of building and maximising potential. The longer any building were empty, the more money we would be losing, but we have nearly a year to consider options for use more carefully. Strategically another building on site is going to add value to assets and more importantly to cash flow. ON the face of it without the build cost figures available, building the building is more advantageous than not. 33 Another cost factor that was not properly accounted for at the tender stage was the need to build new offices for the hotel in the current café area after they are moved from their current locations. Estimates for this work are around £20k and we would want to add this to the chosen contractor’s workload. Nevertheless it is additional cost that was neglected at an earlier stage. 35 The hotel recently requested a loan of £40k on top of the £154k previously owing to assist with cash-flow issues. Following detailed discussion at the F&GP this was reluctantly agreed subject to a signed agreement from the hotel SMT on repayments and penalties. The only leverage the GFTU Has in the event of default on this loan is to take a charge over assets. This was agreed and the existing nursery building would become the new GFTU Offices are the identified asset. Should the hotel default the repayment schedule for two months, the ownership of the old nursery building will transfer to the GFTU. This will have the effect of offsetting any outstanding debt against a new asset on the GFTU’s end of year accounts. 34 We have previously agreed to commission a valuation of the site one year after building work completion.

DN.7.3.18.

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