PAPER E1

Purpose : For decision

Committee :    EXECUTIVE

Date :              9 APRIL 2002

Title :              PROPOSED RETAIL DEVELOPMENTS - FRESHWATER, VENTNOR, SHANKLIN AND SANDOWN

PORTFOLIO HOLDER - RESOURCES

SUMMARY/PURPOSE

The Council has been approached by Aldi Stores Limited proposing an expansion of its retail business to include the Isle of Wight. The Company has acquired property rights to five sites around the Island and is asking to acquire adjoining lands owned by the Council to make their scheme work. The Council is being asked to authorise negotiations with Aldi Stores Limited for a further report to come back in due course.

BACKGROUND

The attached letter from Aldi Stores Limited outlines the basis of the details put forward by the Company to progress its expansion to the Isle of Wight. Aldi is primarily a discount food retailer and has recently extended its market base to retail some general goods, excluding newspapers, tobacco and flowers. The company was founded in Germany and now has stores throughout Europe and is currently seeking to expand its representation in the UK, all operated from the Headquarters in Swindon.

Aldi Stores generally have a floor area of about 1,000 square metres gross on one floor incorporating some 700 square metres net retail space with associated customer parking nearby. It is the Company’s policy to own the freehold of all its assets and retains a range of professional consultants in all disciplines to progress building proposals.

As Members will see from the attached letter, Aldi proposes to overcome the logistics of serving the Island by locating stores in four or five towns, and possibly two more in the future, around the Island. An initial sketch plan for each site is also appended.

Whilst only a brief outline of ideas and proposals are available at this time, there will be a number of issues for further detailed considerations including : planning; car parking; local benefits; job creation and capital value.

PLANNING IMPLICATIONS

The Planning and Policy Manager advises as follows :

Retail policies set out in the Unitary Development Plan (UDP) 2001 are primarily aimed at supporting proposals which maintain, promote and enhance the retail function of existing town centres. For the purposes of the UDP these are defined as Newport, Cowes, East Cowes, Ryde, Shanklin, Sandown, Ventnor and Freshwater.

At this early stage Aldi have an interest in developing stores in 5 of these town centres and, subject to detailed development control and highway matters, any proposal would need to be considered against the following principle retail policies in the UDP:

Policy S1 - Expects new retail development to take place within existing centres

Policy R1 - Allows for development which protects, maintains or enhances the retail function of the town

Policy R2 - Allows for retail development that takes place within defined town centres

Policy R4 - Sets out a sequential approach for considering proposals outside the defined town centres

Other policies relating to matters such as car parking, design landscaping etc will be subject to further consideration once location and detailed proposals are put forward.

In summary, Aldi's proposals could bring investment into towns which would support their vitality and viability by generating more local shopping and related activities. These benefits will need to be considered alongside the potential impact on issues such as car parking once the findings of the Parking Review have been deliberated.

PARKING

All the sites put forward by Aldi will affect existing local car parking facilities currently owned and operated by the Council. Whilst in general the number of spaces would seem to be maintained or increased, the Council will need to take a long-term view as to the parking requirement and policy implementation for these towns. Currently the Council is able to set charges in accordance with Transportation Policy producing a combined income of some £65,000 per annum net. In the future this income control would be lost in all or in part if the replacement parking is on a “no charge” basis. This may or may not support Transport Policy and benefit the local community. The Head of Highways and Transportation will be involved in more detailed discussions and at this stage wishes to reserve his comments and recommendation pending further information being known.

DEVELOPERS PROPOSALS

Aldi Stores Limited is putting forward a retail development proposal of some 5,000 square metres (about 53,000 square feet) gross floor area with about 450 replacement car parking spaces, all subject to planning with precise details yet to be worked up. Most sites will require clearance of existing buildings to make way for a new building. Main board approval has been given to progress these proposals with sufficient confidence to plan a total potential investment estimated at £15 million. Whilst site sketches have been made available for discussions with Planning and Highway officers, precise details have yet to come forward and would in any case be the subject of a series of detailed planning applications.

At this stage Aldi Stores Limited is asking that the Council enter into negotiations for a conditional contract for a merger of both parties landed interests to provide the appropriate development sites. As with similar retail proposals Aldi has offered to give members a presentation of its scheme, in advance of any planning application to help improve understanding.

LEGAL IMPLICATIONS

In respect of these proposed development sites the Legal Services Manager advises as follows:

The Council’s titles are freehold. The land at Ventnor is subject to covenants restricting use on parts. The land at Orchardleigh Road is to be registered and the land at Fort Street has a defective title, however the Legal Services Manager feels that this can be remedied by an indemnity policy.

FINANCIAL IMPLICATIONS

That any loss in revenue income generated from these sites would need to be off-set by the value of the capital receipt.

CONSULTATION

To date officers in Planning, Highways, Economic Development, Finance, Legal Services and Property Services have been consulted. This paper has also been circulated to local members and each Town or Parish Council.

Ventnor Town Council supports the principle of the development and for discussions to continue.

Freshwater Parish Council has commented as follows :

“The Council has now had the opportunity to consider the application in relation to the above and I have been asked to tell you that they continue to object to this proposal on the same grounds as stated in the letter of 20 February 2002. Freshwater is a village and the Council are concerned about the effect these proposals will have on village life.

The Council suggest that the IWC hold a public meeting in Freshwater to discuss Aldi’s proposals and to give local people a chance to express their views and that the West Wight Business Association should be asked for their opinion.”

In the knowledge of these comments Aldi Stores Limited had reaffirmed that they would welcome the opportunity to talk with the Council and discuss their concerns. Aldi’s intention is to work with the community by becoming very much the local store and reduce the amount of purchasing power that finds its way elsewhere.

Shanklin Town Council considered this matter at their last meeting and resolved that :

“The Isle of Wight Council be advised that the Town Council would like to learn more about the proposal, particularly in relation to traffic and parking implications and, to this end, Members would like a meeting with representatives of Aldi Stores to discuss the matter further.”

Totland Parish Council is happy in principle so long as free parking is provided by Aldi Limited.

Sandown Town Council is happy with the principle of further discussions but is concerned about the current site proposal.

NEXT STEPS

The developer is seeking to agree with the Council a conditional contract to acquire the Council’s property. For such a contract to operate and become unconditional several principle terms will need to be fulfilled. Subject to further discussions these conditions will include :

           (i)        That the developer obtains satisfactory detailed planning consents. This usually includes the right to a planning appeal with time for judicial review.

           (ii)       That the planning consent includes the retail development and the new parking arrangements.

           (iii)       The brief and specification for the new building works.

           (iv)      The programme for the new construction.

           (v)       An agreement to a long stop date.

           (vi)      The incidence of all costs to fall to the developer and be secured by a bond in an agreed sum if necessary.

           (vii)      The capital value of the property in the light of Planning and Highway requirements and any other negotiated benefits.

The process to achieving best consideration in the case of a special purchaser, as is this case, is for the Council to obtain two independent valuations from surveyors selected from the Council’s consultants list. These consultants will provide separate reports to be retained as confidential documents to the Council which assess the market value of the existing property both as a stand alone property and as part of the retail development site as designed by subject to planning. Armed with this information your officers will then negotiate the terms for a conditional contract that will be agreed with the developer and can be recommended to the Executive in a future paper. Throughout this process officers will keep the Portfolio Holder for Resources informed of the progress towards a settlement.

BACKGROUND PAPERS

Unitary Development Plan 2001

Contact Point : Tony Flower, Property Services Manager, ☎ 823263 and Paul Airey, Planning Policy and Environment Manager, ☎ 823556