3.1 The proposed redevelopment of 2 Marsham Street meant that the Home Office needed to vacate both its leaseholds at Queen Anne's Gate and at Clive House. However, the lease at Queen Anne's Gate of £11.5 million per annum was not due to expire until 2018. Between 1996 and 1999, it was not clear how Queen Anne's Gate or other surplus Home Office buildings could be re-used and the Home Office was unable to identify potential replacement tenants. It therefore negotiated with the landlord an option to terminate the lease at a price equivalent to a then net present cost of £91 million. The Clive House lease, which was due to expire in 2013, was valued as an asset since the rent was minimal at £30,000 per annum.
3.2 In 2000, Property Advisers to the Civil Estate (subsequently the Office of Government Commerce property division) identified the Department for Constitutional Affairs (formerly the Lord Chancellor s Department) as a suitable occupier for Queen Anne's Gate and Clive House in response to separate requests for help from the Home Office and the Department for Constitutional Affairs. Queen Anne's Gate and Clive House are suitable accommodation opportunities for the Department for Constitutional Affairs because they will be available when its existing leases expire. In June 2003, the Department for Constitutional Affairs committed to taking over the Queen Anne s Gate lease, saving the Home Office the cost of its surrender. The Department for Constitutional Affairs will become liable for the lease and for the cost of running Queen Anne s Gate once the Home Office vacates the building in 2005.
3.3 The timing of Queen Anne's Gate's availability fits in with the Department for Constitutional Affairs need for accommodation and there will be some leeway if there is a delay to the construction of 2 Marsham Street. The Department for Constitutional Affairs currently plans a two year refurbishment of Queen Anne's Gate following the Home Office's departure from the building in 2005. However, if there are delays to the Home Office vacating Queen Anne's Gate, the Department for Constitutional Affairs can defer its relocation until 2009 when its lease on its current headquarters building expires. Clive House has already been vacated by the Home Office and its refurbishment for the Department for Constitutional Affairs started in 2003.