Appendix C - Leisure Facilities
Perth and Kinross Council · 4 September 2024
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1 Appendix C Leisure Facilities 1. EXECUTIVE SUMMARY 1.1 On 22 January 2024, the findings and recommendations of the Transformation of Leisure Assets Review was presented to Council (Report 24/19 refers). Council agreed to: 1. Note the Review findings set out in section 5 of the report. In relation to paragraph 5.3, considers that the information on past and current usage as well as future trends does not provide sufficient evidence to support the removal of ice from the mix of activities available at PH2O. 2. Approves the recommendations set out in section 6 of the report, subject to deletion of recommendation 2 and replacement with: (i) Further work to be undertaken on curling usage, market trends, and affordability factors, including current curling demand and usage for 2023/24 and consideration of growth opportunities for curling; (ii) Options for the sustainable provision of ice at PH2O being included within the transition plan and rescoping exercise referred to in recommendation 3 in section 6.1. (iii) Officers be instructed to include an ice rink component within a fully costed PH2O proposal to be brought to Council in August 2024. 3. Approves the next steps set out in section 7 of the report and additionally asks that: (i) The Council’s contract for services with Live Active Leisure (LAL) maintains family-friendly leisure swimming as a core service requirement, as an activity which enables a broad section of the local population to be healthy and active. (ii) The design of a new swimming pool for Perth, as part of the rescoped PH2O project, reflects this requirement and will allow a family-friendly leisure swim offering alongside fitness and lesson swims. 1.2 Details of options for ice facilities requested by Council are contained in Appendix E. 1.3 This appendix provides details of the work undertaken to progress the decision of Council on leisure facilities in Perth to support recommendations 3a and 3b in the covering report. 2. BACKGROUND 2.1 The PH2O project commenced in 2005, Live Active Leisure Ltd, commissioned a series of independent reviews and studies. These explored how Perth’s existing sport and leisure services could be effectively developed for the next two decades at least.
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2 2.2 The Leisure Needs Analysis Report (Report 12/487 refers) was presented to the Lifelong Learning Committee in October 2012. It provided an evaluation of the current and future needs for sport and recreational facilities in Perth and Kinross. The report proposed replacing Perth Leisure Pool (PLP) with a modern facility to include a 25m x 8 lane pool, a learner pool and leisure water facilities. The project was noted as being part of LAL’s facilities “Vision” project. An outline business case was developed but not progressed in 2015 through lack of funding. 2.3 In 2019/20 the Council and LAL commissioned work via HubCo to support a Strategic Business Case (SBC) for a major new leisure centre in Perth city centre called PH2O. 2.4 The 2020 SBC examined a range of options in response to the strategic case for change and identified a preferred option for the Council to consider. This was a 15,000 sqm new build on the site of PLP and Dewars with accommodation including large leisure water, traditional swimming facilities, ice, bowling, gym/fitness, health spa and family activities together with flexible conference space and café. 2.5 Further work was instructed by the Council in October 2021 to develop the Outline Business Case (OBC) for the project enabling it to be considered within the Council’s future capital programme. The PH2O Outline Business Case (OBC) was completed and presented to members in February 2022 The OBC tested a long list of options and undertook sensitivity testing on the preferred SBC option which had an increased estimated capital expenditure cost of £85-90M (due to construction inflation), against a smaller scale core option (excluding leisure water, bowling, gym/fitness and health spa) which had a reduced capital expenditure cost of £67-70M. The Council approved the preferred option for PH2O at an outline cost of £85-90M on 23 February 2022 (Report 22/36 refers) 2.6 In March 2023, the Council decided to pause the project and instructed officers to undertake a Transformation Review of Leisure Assets (the ‘Leisure Asset Review’), on the grounds of overall project affordability with increased loan charge rates, energy price rises and general inflation pressures (Report 23/73 refers). The existing budget provision for the project of £90m was retained in the budget pending the outcome of the review. 2.7 The Leisure Asset Review, submitted to Council on 22 January 2024 focussed on: Current and future usage trends for key leisure activities; Accessibility of leisure facilities for the population of Perth and Kinross; Cost and usage analysis for key facilities; Energy efficiency considerations; Perth leisure provision: key issues. 2.8 The review recommended that the facilities mix previously proposed for PH2O should be reduced in light of findings in relation to usage and market trends,
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3 and affordability factors and that the three facilities (PLP/ Dewars/ Bells) be co -located on one site for efficiency. LAL remain unable to obtain business and property insurance for both Bells and PLP for flooding risk because of a number of flooding events in Bells and the 2020 flood at PLP. 2.9 While the review assumed the co-location of the functions of the three facilities would be on the PLP/Dewars site the report did note that other site options should be investigated. Since the review findings were considered the site at Thimblerow has become available following the withdrawal of previous commercial interest. 3. OPTIONS APPRAISAL OF APPROVED BASE CASE 3.1 Following the findings of the Leisure Asset Review and as part of the process of updating and revisiting the OBC, the following facilities mix was approved by Council on 22 January 2024 as the base case facilities mix based on user demand and affordable provision. Leisure water, ice and indoor bowling were specifically excluded. 25m Pool 8 lane (Moveable Floor) 12.5m x 8.5m Teaching Pool (Movable Floor); Indoor Play Area (potential Clip n’ Climb or other family play activity) Games Hall Fitness Gym Studio 1 (flexible) Studio 2 (flexible) Studio 3 (flexible) Café 3.2 The swimming pool offer was instructed by Council to be “family friendly leisure”. This is defined as programmed weekend/ holiday inflatable sessions and the inclusion of a toddler splash pad area adjacent to the small teaching pool. 3.3 In addition to these facilities modelling was undertaken to establish the feasibility of incorporating an ice component into the PH2O proposal as instructed by Council on 22 January 2024. 3.4 In looking at options the importance of good transport links to leisure provision and access to appropriate car parking has been considered. The current facilities benefit from significant on-site car parking. Replacing this with like for like parking (374 spaces) at any location would be contrary to current Perth and Kinross planning advice/ NPF4 policy. Initial discussions indicate that 70 spaces would be advised for any new project. Visitor numbers and income and expenditure projections for all options are therefore based on 70 car parking spaces. 3.5 Options for the existing PLP/ Dewars site also include costs for the potential acquisition by agreement of the two third party sites on Glasgow Road to maximise the use of this space and create a frontage on Glasgow Road.
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4 4. OPTIONS APPRAISAL 4.1 This section describes each of the delivery options for the base case facilities mix approved by Council in January 2024. Each of the options are then evaluated against the business case critical success factors in Section 6 to provide a recommendation. Option A - Do Nothing 4.2 This option is to maintain the status quo with ongoing reactive maintenance to address building condition issues as they arise. 4.3 The three current facilities PLP, Bells (services withdrawn) and Dewars are respectively 38, 58 and 33 years old. Each has been maintained appropriately by LAL however significant investment is required across all three over the next 30 years to address the needs of aging buildings as well as to deliver net zero obligations. This is in addition to the significant LAL (and thus Council) annual operating costs. This is why the PH2O project was originally developed and the issues have only grown in the 20 years since it was first identified. 4.4 While still a much-loved facility customer feedback regularly highlights that the PLP is tired, and it is showing significant signs of age. Parts of the building are out of operation with long standing technical issues – walkway from Glasgow Road, Health Spa and Outdoor Pool. Unplanned shutdowns are more frequent as a result of building failure. In 2020 £2M was spent on plant improvements as a result of flooding. Energy costs are significant. In 22/23 the operating subsidy was £769,927. 4.5 Dewars is the youngest building of the three but is dominated by the curling facility used six months of the year. The indoor bowling hall has recently been transformed into a new 100+ station fitness gym and fitness studios following LAL’s decision to withdraw services from Bell’s Sports Centre In 22/23 the operating subsidy was £570,856. 4.6 Bell’s is in the process of being handed back to the Council as a result of LAL relocating health and fitness activities to Dewars. Alternative accommodation is being provided in the school estate for most of the previous sports hall users from Perth. Daytime sports hall access will be restricted and facilities are not available for national events/ organisations e.g. Scottish Gymnastics. The Gannochy Pavilion is sublet to Perthshire Rugby Football Club on a long- term lease with full costs being met by LAL/ the Council. The building also provides public toilets/ changing places toilets on the North Inch seven days a week. 4.7 Long term maintenance and investment costs under the ‘do nothing option are currently estimated to be £56M across Dewars and PLP over a 25 year period. Reactive maintenance would likely cause significant planned and unplanned interruption to services.
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5 Option B - Base Case, New Build on Site of Existing Dewars Centre 4.8 Construction of a new build PH2O leisure centre on the site of the existing Dewars Centre, with the base case facilities detailed at 3.1. Existing PLP to remain operational (if possible) throughout the construction of the new build and demolished once PH2O opened, but loss of ice facilities from date of closure of Dewars and loss of gym facilities for at least 2 years. Significant disruption on site over an extended period. Option C – Base Case - Refurbish Dewars, Demolish Perth Leisure Pool 4.9 Refurbishment and extension of the existing Dewars Centre to form PH2O, with the base case facilities detailed at 3.1. Existing PLP to remain operational (if possible) throughout the refurbishment and extension works and demolished once PH2O opened, but loss of ice facilities from date of closure of Dewars and loss of gym facilities for at least 2 years. Significant disruption on site over an extended period.
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6 Option D – Base Case - Refurbish Perth Leisure Pool, Demolish Dewars 4.10 Refurbishment and extension of the existing PLP to form PH2O, with the base case facilities detailed at 3.1. Existing Dewars Centre to remain operational (if possible) throughout the refurbishment and extension works and demolished once they are completed. Significant disruption on site over an extended period.
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7 Option E – New Build, Thimblerow 4.11 Construction of a new build PH2O leisure centre on the site of the existing Thimblerow Car Park, with the base case facilities as at 3.1. 4.12 Added benefits: transition benefits (no disruption to LAL services, continuity of employment for LAL staff) relocating a 400,000 footfall to the city centre supporting economic growth; and opportunity to deliver a significant priority housing site in Perth in the medium term. 5. CRITICAL SUCCESS FACTORS 5.1 Critical success factors have been developed to appraise the options as they were for the original PH2O project and are as follows: 1. Delivers facilities which meet usage demands as per the approved recommendations of the Transformation of Leisure Assets Review 2. Reduces environmental impact through significant improvement in energy consumption and supporting a just transition to net zero Strategic fit 3. Represents the best use of available land with Council control/ ownership Value for money 4. Maximise the reduction in operating deficit vs business as usual
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8 Supplier capacity and capability 5. Solution reflects an appropriate/ manageable level of construction risk 6. The project can secure funding to the proposed level of capital expenditure Affordability 7. The project represents the most cost efficient way of delivery the services as per the approved recommendations of the Leisure Asset Review Achievability 8. Maintains access to services during construction phase and maximises ongoing LAL financial viability during transition periods between facilities 6. BASE CASE OPTIONS ASSESSMENT 6.1 The site options were assessed by the Senior Officer Group against the Critical Success Factors noted in section 6. Critical Success Factor Option 1 2 3 4 5 6 7 8 A – Do Nothing N/A N/A B – New build, current site C – Refurbish Dewars, replace PLP D – Refurbish PLP, replace Dewars E – New build, Thimblerow Base Case Preferred Option 6.2 The preferred option (Option E) is the construction of a new-build facility, but on the alternative Thimblerow site. This site is considered a more efficient capital cost solution for PH2O primarily due to the smaller land footprint that it accommodates. It also creates an ability to continue the operation of both PLP and Dewars unimpeded during the construction phase. Development on Thimblerow represents efficient use of Perth estate as PLP/Dewars can accommodate significantly more housing than currently planned at Thimblerow (150/250 versus circa 50).