URGENT BUSINESS

DEVELOPMENT CONTROL COMMITTEE – 25 FEBRUARY 2003

TCP/12658/G – P/339/02 – OUTLINE FOR RESIDENTIAL DEVELOPMENT OF 7 TERRACE HOUSES WITH REAR PARKING, ACCESSED OFF DENMARK ROAD (REVISED SCHEME) (READVERTISED APPLICATION), STRAINSTALL UK LIMITED, 23-27 DENMARK ROAD, COWES.

SUMMARY

To consider a request from Strainstall Limited for a variation to the terms of the planning obligation required in connection with the above.

BACKGROUND

In December 2002, this Committee resolved to conditionally approve a planning application for the above development, subject to the conclusion of a planning obligation under Section 106 Act 1990. The agreement was required to be under the broad headings set out in the report considered by Members at that time, as follows:

1.  Relocation of the existing business to new premises at Somerton within six months of date of permission;

2.  Reasonable endeavours to use the Somerton site for relocation and thereafter for carrying on the business;

3.  All proceeds from Denmark Road sales used for relocation with any surplus proceeds invested in the business. Full production and inspection of documents and records for the Council in order to satisfy compliance;

4.  During fitting out and up to relocation, business to continue to trade from Denmark Road site;

5.  No development at Denmark Road until Council’s confirmation of satisfaction with item 3 above; and

6.  Access for the Council to both sites in order to satisfy compliance.

The reason for requiring an agreement in these terms is to ensure continuity of the business use and that the proposed residential development would not result in loss of employment. Providing the safeguards were in place, it was considered that the proposal would be in accordance with UDP policy E3, regarding changes of use of employment land.

When the decision to approve the application subject to the planning obligation was made, it was thought that the terms had been agreed, but subsequent discussions between the Legal Section and lawyers acting for the other signatories have identified that the contract terms required in order to meet the agreement create significant cash flow difficulties for the applicants. Those difficulties have been identified in an e-mail note from the applicant received on 21 February 2003 which states that the current terms the deal will ‘fall through’.

A copy of that statement is attached to this report for Members information, and confirms Strainstalls’ commitment to its relocation to Somerton. It also indicates that the requirement that the residential planning permission shall not be implemented until the proposed new unit at Somerton has been ‘fitted out’, has resulted in the current landowner at Somerton and prospective purchaser of the Denmark Road site requiring financial guarantees which the applicant is unable to afford.

The request therefore is that the Section 106 wording should be altered to allow the agreement to come into force at completion, i.e. when Strainstall has committed the purchase price of its site (£465k) towards the cost of the Somerton site.

The Council’s suggested wording ensures that the residential development cannot be undertaken until the Somerton site is ready for relocation of business. Common sense indicates that the residential development cannot be undertaken until Strainstall’s have moved out of the Denmark Road premises and they have been demolished. However the wording suggested by the applicants would not secure the relocation of the employment use to Somerton, merely a commitment of monies towards this site’s purchase.

Members may recall that similar agreements were initially required at other locations.

FINANCIAL IMPLICATIONS

None.

OPTIONS

1.  To agree to the request by the applicants and amend the Section 106 Agreement to allow implementation of the residential planning permission for the Denmark Road site on completion of purchase of the site at Somerton.

2.  Not to agree to the request and instead require the agreement to be conditional: a) on relocation and commencement of trading having taken place or b) on fitting out.

3.  To require further negotiations between the Isle of Wight Council and the other parties prior to accepting any changes to the proposed agreement.

CONCLUSION

The Council’s policy under the UDP is not to allow the change of use of employment land to other uses, unless, amongst other things, alternative equivalent floorspace can be found within the area. The applicant is proposing to relocate to an existing premises in the locality by using monies gained from sale of the site for residential purposes. The applicant in its recent statement indicates its’ past successes and its requirements to relocate in order to expand and build on these successes and that these would be prejudiced under the proposed wording.

It appears from the information available that a requirement to retain the wording will mean that the move will definitely not because of the safeguards required by the landowner of the Somerton site, but that the purchase of the site at Somerton by the applicants would go ahead if the wording was amended. The judgement has to be made whether it is likely that, if the applicant buys the Somerton site, it will relocate and the only information available on this point is the statement recently received, which gives assurances, but no direct commitment which can be included in any formal agreement.

If option 1 is agreed, there is an increased risk of failure to achieve the Council’s policy objectives contained in UDP policy E3. If option 2 or 3 is agreed, there is a danger that the relocation will not take place.

The proposal to redevelop the Strainstalls site provides residential development close to the town centre and achieves the aims of the UDP in terms of sustainability, providing the relocation can be safeguarded. Although the request is made to vary the timescale in which the residential consent can be implemented, it would still be a requirement of the planning obligation that within six months of the date of the signing of the agreement, the Somerton units would be fitted out and the applicants relocation completed and the operation of the business using the staff at the Somerton units commenced.

In the circumstances, Members may feel that the request of the company could be supported and therefore, on balance, I recommend that option 1 be adopted.