This project was the large-scale voluntary transfer of 8,500 homes by Salford City Council to Salix Homes - the arms-length management organisation established by the Council to manage its properties.
A unique part of the project involved advising on the Council’s obligations in relation to a large PFI project, and how these could be dovetailed with the transfer process (as it was proposed that some of the properties that might later be demolished as part of that PFI project should be transferred to Salix Homes on transfer).
What was our role?
We acted as the legal advisors to the Council, in relation to the transfer. This involved a multi-disciplinary team providing advice on commercial, property, employment and development issues.
How did we add value?
- The challenge for all parties was the need to negotiate terms that were fundable by a lender in a challenging financial climate, whilst actively managing the residual liabilities and risks to the Council so they remained acceptable. As with all stock transfers, the project involved a significant degree of active management to ensure all the work streams were delivered in time for completion.
- The Council needed an option over a cohort of transferring homes to add to the Council’s existing multi-million pound PFI redevelopment project. Constructing the arrangements to give flexibility to the parties, whilst ensuring the Council’s potential liability under the overarching development agreement, relating to the PFI project, was minimised, required creative thinking and an in-depth understanding of the development process.
- The Council wished to exclude assets attached to high-rise blocks from the transfer, which were integral to the Council’s ICT and CCTV systems. It is unusual to exclude assets in this way on a wholesale transfer and the location of these assets meant that a solutions-based approach was required to deliver the Council’s objectives.
- The transfer also involved the transfer of a material number of services from the Council to Salix Homes, including the transfer of the Council’s housing options and homelessness service. The need to transfer services of such magnitude, alongside the ‘normal’ stock transfer process, required a coordinated and customer-focused approach to ensure that the transfer date (set by Government due to the associated debt write off) was met.
Throughout the transaction, Anthony Collins Solicitors used their wisdom and experience of stock transfers and public regeneration projects to enable the Council to complete the transfer before the relevant Government deadline. Their creativity and clear focus was particularly valuable in the closing stages of the transaction, when they managed some critical risk exposures for the Council as against the position taken by third-party lenders. This was done without losing sight of the need to complete the deal and not to undermine the Council’s ongoing relationship with Salix Homes.Neil Thornton, Director of Finance and Corporate Business, Salford City Council.
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