1.
The Cabinet is being asked to agree a delivery plan
for the Pan Urban Extension through the procurement of a development partner to
bring forward the scheme and the master plan.
BACKGROUND
2.
The plan for this Urban Extension and this plan is
adopted Supplementary Planning Guidance (SPG) it can be viewed on www.iwight.com/pan/spg.
3.
This plan is a strategic vision and framework designed
to guide a sustainable housing and employment development with quality
outcomes. It also aims to integrate both new and existing communities and
contribute to the ongoing regeneration and renewal of the area.
4.
The Council now needs to agree a delivery plan that
can be progressed to achieve the development vision for this urban extension
being “a sustainable community where people want to live, work and play.”
5.
There are three ways the Council could progress this
urban extension and they are:
·
offer the Council owned land for sale with the benefit
of the SPG.
·
prepare and submit an outline planning application and
subject to the outcome of that application offer the land for sale.
·
seek a development partner who will undertake the
master planning application based on Council requirements and share proceeds of
sale.
6.
In weighing these options members will want to reflect
on the key elements of information to decide: the affordable housing
allocation; the procurement of a partner and setting requirements of the
development standards.
7.
Housing Allocation
(a)
The development will provide some 750 – 800 dwelling units.
This will help meet the Council’s housing requirements in its Housing Strategy.
(b)
A bid was made to the Housing Corporation for the Pan Urban
Extension for pre-allocation funding for the period commencing 2009. This application is for some 240 homes of
various sizes and with excellent Eco Home Rating.
(c)
This bid comprises :
50 x 1 bed to rent (46m²)
97 x 2 bed to rent (67.7m²)
34 x 3 bed to rent (86m²)
8 x 4 bed to rent (100m²)
10 x 1 bed homebuy (46m²)
35 x 2 bed homebuy (68.9m²)
6 x 3 bed homebuy (86m²)
(d)
The Housing Corporation is expected to make an announcement in
due course based on a commencement for these homes in April 2009.
(e)
As part of the assessment process undertaken by the Housing
Corporation, a detailed assessment of housing need is provided in support of
funding the scheme. The value of a
successful bid to the Housing Corporation in this case is approximately £11.1
million of grant funding available to secure the affordable housing.
(f)
With the aim of providing some 240 affordable homes through
this project, there will need to be a Housing Association lead as the
registered social landlord. The Council
Housing Policy prefers this appointment should be a local Association with the
market knowledge and management capacity.
The application to the Housing Corporation has been made by Medina
Housing Association and it has been agreed with other local RSL’s that Medina
Housing Association will lead this element of the project.
8.
Schools
The
schools serving this area are Barton, Summerfields, Downside and Medina
High. Medina House is an all-Island
special school. Downside a middle school requires the whole of the existing
playing field.
9.
Infrastructure and Design
(a)
The development will require very significant enabling works
to provide new infrastructure such as roads and drains. This cost is currently
estimated at between £8 – 10 million.
(b)
The Council’s policy for planning gain from this scale of
development with contributions towards community benefits and off site works
(usually referred to as Section 106 Agreements) is currently estimated at £7
million. Contributions to off site works have been identified to include:
Education, formal sports facilities, off site highway works, public transport,
off site pedestrian and cycle routes and environmental improvements to the area
in particular the Pan Local Centre and Garden Way.
(c)
The work by Whitbybird provides guidance on the options for
low energy housing at Pan and needs progressing to identify explicit
recommendations that will drive sustainable energy. Detailing this advise for incorporation into the design guidance
is estimated to cost some £12,000 and would be reproduced as guidance for other
developments. It maybe possible to off set some of this cost through grant
funding and this is being pursued.
(d)
The implementation of a bypass would cause a loss of 2.9 hectares
of land and equates to the loss of 116 homes.
A bypass is also estimated to cost in excess of £4,000,000 to
complete. Current guidance provides for
a development with a spine road. How
that is designed will be subject to the Traffic Impact Assessment and the wide
consultation for this element of the masterplan taking into account the
topography of the site and appropriate engineering considerations.
(e)
Provision of starter homes, elderly persons homes and key
worker housing require new innovative approaches that fulfill these needs.
There are several different pilot schemes being tried elsewhere and it is
proposed any developer will be expected to make some provision aimed at
promoting an innovative solution towards these elements of affordable housing.
(f)
To achieve the Council’s sustainability targets there is a
need to set an Eco Home Rating target for this development and it is proposed
that an Eco Home Rating of excellent should be sought throughout the
scheme. Work on providing guidance
towards an excellent rating has progressed and at the same time, building
requirements are changing to drive up sustainable energy conservation.
(g)
Analysis of the above dynamic costs by DTZ specialist advisors
indicates there will be a significant impact on capital receipts 4 a
traditional land sale is undertaken as the number of unknown variables will
affect the assessment of risk and value.
10.
Master Plan and Marketing
The
Master Plan proposals will need to be progressed to form the basis of an
outline planning application. The
outline planning application should include an environmental assessment and be
accompanied by a range of supporting documents as follows:
·
Archaeological evaluation and mitigation.
·
A transport assessment.
·
An ecological assessment.
·
A survey and assessment of trees and other vegetation
on the site.
·
A detailed design guidance or design code.
·
A drainage strategy.
·
An assessment of flood risk.
·
A visual impact assessment of the proposals.
·
Sustainability criteria or targets for the development.
·
A phasing programme setting out how the delivery of
market and private housing will relate to the delivery of infrastructure,
landscape and other community developments.
11.
The price of the outline planning application with all its
elements including the combined work of the entire team is estimated at
£300,000.
12.
Whilst the construction of this development could be directly
commissioned by the Council this is not core Council business. Neither does the Council have the sufficient
skills in house. The procurement of
this development to achieve the Council’s objectives is best in the hands of an
experienced developer or a joint development partner. In either case this is likely to be a national house builder and
several such companies already have an established presence on the Island and
expressed an interest in being considered for selection as a partner. Clearly important elements of this selection
process will include experience and examples of quality development.
13.
The alternative to a traditional land sale is the joint
development partnership approach with the Council receiving a percentage of
gross development value (GDV). Under a partnership scheme the Council
collaborates with the developer by selling each plot as building works proceed
and market forces permit. This way the developer carries the capital risk of
infrastructure, but not land costs. In return the Council will receive an
annual income flow of capital over the development period estimated at upto10
years.
14.
By partnering with a master developer the Council should be
able to secure some 25% of GDV which is greater than a traditional sale value
and will depend on developers bids.
15.
Because the selection process includes the transfer of Council
owned property either in the short term or over a longer period the Council is
required to obtain best consideration. As such the Council will be seeking
competitive bids for its property according to a range of targets.
16.
It is recommended to undertake a two stage marketing
process. Firstly to draw up a shortlist
of developers following national and local advertising, this list will be
selected according to quality and ability.
Secondly developers will be asked to bid against the criteria set out in
the range of targets.
17.
The public engagement and consultation for the Pan Urban
Extension is beginning and links are in place with the Local Strategic
Partnership and Pan Neighbourhood Partnership.
This engagement will be ongoing as the master plan comes forward whether
led by the Council or a Developer Partner. The Partnership is helping the Council with many aspects of the
scheme, in particular environment work such as the ecological quality of
streams.
18.
By working with a development partner the Council as landowner
will be able to influence: quality; affordable housing; traffic impact;
environment assessment; sustainability; fix design standards and guidance;
agree off site works, and overall agree the best solutions for the existing and
the new communities. This will be best
achieved by working with Medina Housing Association to help draw down Housing
Corporation funding to support the delivery of affordable homes.
19.
The benefits of working with a development partner outweigh a
traditional land sale because it will avoid interest charges on land
acquisitions thereby enabling substantial start up infrastructure costs. It should also improve financial outcomes
where the development period is over many years during which time the property
market may go up or down but generally is expected to move upwards. By enabling a lead partner that it will more
readily coordinate infrastructure; formulate an over view and plan for
affordability sustainability and quality in liaison with the RSL. A development partner working with a longer
term investment strategy will also have confidence to invest in staff training
and relationships with the existing community.
STRATEGIC
CONTEXT
20.
By enabling the Urban Extension at Pan the Council will be
fulfilling several corporate objectives and the aims of the Local Strategic
Partnership. Most important among these
aims and objectives are the provision of housing, building a quality
environment, promotion of the economy, economic development and creating a
sustainable community.
21.
By collaborating with other agencies in particular the Isle of
Wight Economic Partnership (IWEP) and the South East England Development Agency
(SEEDA) the Island has an opportunity of attaining sustainable development
through economic lead regeneration.
Both IWEP and SEEDA are able to target new employment opportunities for
the Cowes Waterfront Initiative for the whole Medina Valley and Newport
including Pan by scoping resources and proposals not available to the
Council. Discussions are ongoing with
SEEDA how best to develop the employment zone for this Urban Extension and at
this time the continuation of this collaborative working is being developed
through the Island Investment Company which is the subject of a separate report
on this agenda.
22.
By aiming for a quality development designed to a high
standard the scheme will be better placed to secure and attract the significant
initial development investment and build confidence in the marketplace.
23.
By working with Cowes Waterfront Initiative the aim is to make
Cowes, East Cowes, the Medina Valley and Newport collectively a place of
distinction with a sense of wellbeing.
CONSULTATION
24.
The public engagement and consultation for the Pan Urban
Extension is already widely based through the SPG exercise and links are in
place with the Local Strategic Partnership as well as the Pan Urban Renewal
Project. This engagement will be
ongoing as the outline planning application comes forward whether led by the
Council’s consultants or a partner.
FINANCIAL/BUDGET IMPLICATIONS
25.
Including extra land acquisitions and SPG the Council has
already committed £1,600,000 to bring forward this urban extension. This is in
addition to holding the existing asset value. Clearly a development on this
scale with such significant infrastructure investment has a major planning
requirement. The cost of national marketing for a master developer will be
£45,000. On balance given the projected
income to be generated from 2009 onwards by this development in the form of
capital receipts then a marketing requirement is prudent and can be managed as
part of the capital programme.
LEGAL
IMPLICATIONS
26.
The Council will in due course dispose of land under s123 of
the Local Government Act 1972. The 1972 Act and part 1 of the Local Government
Act 2000 empower the Council to undertake work in preparation for the
development where to do so is consistent with the Community Strategy. The terms
being proposed must represent best consideration unless an exemption from the
Secretary of State is granted. The matter of disposal will be the subject of a
further report after the marketing process has taken place.
OPTIONS
27.
(i) To sell its
entire property holdings now, given the benefit of the Supplementary Planning
Guidance and take a capital receipt whilst also fixing certain goals, such as
affordable housing requirements and leave the highest bidder to work through
the detailed planning process, this would in effect be the do nothing option
for the Council.
(ii)
To bring forward an outline planning application for the area
and subject to the outcome of that application sell the entire property to the
highest bidder.
(iii)
To seek to appoint a joint venture partner now who in
partnership with the Council becomes the master developer for the site and
brings forward the detail planning proposals at no cost to the Council.
EVALUATION/RISK
MANAGEMENT
28.
This is a large scale development which will take place over
many years. Various dynamics will
affect the pace and ongoing standard of development major among these
influences includes local and national prosperity, building and energy innovation,
cost planning and legislation. An
annual report should be produced by the Council to keep stakeholders and the
community advised of progress whichever option is chosen.
29.
There is a need to widen the community engagement and the
provision of information to clarify how the development is proposed to be taken
forward.
30.
Selling the site with the existing SPG would be easy and
relatively straightforward. There would be little or no risk and the Council
would leave the planning process to secure its primary goals. This in effect a do nothing option where the
developer/purchaser bears unknown risks, will bid accordingly and would not
maximise receipts or outcomes for the Council.
31.
By bringing forward an outline planning application most
development constraints will be addressed. This will give potential developers
much more information and confidence about the development and make for a
competitively higher bid. It will however take more resources initially to
achieve the outcome and the Council would need to buy in that capacity.
32.
Through a Development Partner making the application the
Council as landowner will be able to influence: quality; affordable housing;
traffic impact; environment assessment; sustainability; fix design standards
and guidance; agree off site works, and overall agree best solutions for the
existing and the new communities. A
development partner will find solutions to these questions and work to maximise
rewards. By partnering the outline
application as landowner the Council will clarify further for itself the value
of its land asset. Once these key issues are decided it will be reasonable and
usual for the developer/partner to progress the detailed planning applications.
33.
The likely benefits of working with a development partner out
weigh a traditional land sale option because it avoids interest charges on land
acquisitions and infrastructure costs enabling an earlier start up on
site. It should also improve financial
outcomes where the development period is over many years during which time the
property market generally is expected to move upwards. A partner will be more readily able to
coordinate infrastructure; formulate an over view and plan for affordability
sustainability and quality whilst also investing in staff training and
relationships with the existing community.
34.
By appointing the developer and RSL from the start they will
build relationships and in this way gain an understanding in the decision
making process. Having the developer in place at this stage could also support
a referral to Government Office and help economic planning of the employment
zone with SEEDA.
35.
The competition to appoint the developer would be in two
stages. Those short listed will be required to make a commitment in terms of a
development programme; confirmation as to the acceptance of design codes and
the design guidance for incorporation in a future detailed planning
application; the scheme for site supervision and sales marketing. The selected
developer will therefore enter into a comprehensive agreement to provide
housing on the Council’s property at no cost to it, with the Council having
little or no development risk. In the
case that the development partner was to fail, then the Council will be entitled
to step in and appoint a replacement developer to continue the project.
|
RECOMMENDATIONS
36.
It is recommended that :
(i)
The Director of Economic Development and
Regeneration is authorised to market the opportunity to develop the Pan Urban
Extension to secure a Joint Venture Partner in consultation with
Members. The appointment and terms
will be the subject of a further recommendation to the Executive.
(ii)
That the development should provide 240 affordable
homes of various sizes to meet the needs of Island people for affordable
housing.
(iii)
That the target for Eco Home Rating is to be
excellent with an aspiration to achieve exemplary standards in the provision
of sustainable energy.
(iv)
The Council identifies Medina Housing Association as
the lead registered social landlord for this project to maximise the
investment of Housing Corporation funding.
|
Contact
Point: Mr A J Flower, Head of
Property Services ' 01983
823263 email [email protected]
|
TONY
FLOWER
Head
of Property Services
|
COUNCILLOR
JILLY WOOD
Portfolio
Holder for Resources, Audit, and Efficient Council and Customer Champion
|
|
COUNCILLOR
IAN WARD
Cabinet
Member for Environment Transport and Planning Policy
|
COUNCILLOR
DAWN COUSINS
Cabinet
Member for
Care,
Health and Housing
|
