Purpose : for Decision
Date
: 9
JANUARY 2007
REPORT OF THE CABIINET
MEMBER FOR ASSETS, PLANNING AND HOUSING
IMPLEMENTATION DATE: 19 JANUARY 2007
PURPOSE
1.
To approve the offer by Barratt Homes (Barratts) for
the benefit of a right of way across Isle of Wight Council (IWC) owned land, to
enable access to a large development site.
OUTCOMES
2.
The grant of access will enable residential
development in accordance with the Unitary Development Plan (UDP) towards the
requirement of 520 new homes per annum, 30% affordable housing and 20 acres of
employment land.
3.
The access road will be constructed in part across IWC
owned land. Barratts will construct
this to standards set out in the planning permission. Provided the road is constructed to the required standards, the
road will then be adopted by IWC as the Highway Authority
BACKGROUND
4.
IWC own land which is identified in the UDP as the
principal access to a large, mixed use development site in Whippingham.
5.
Barratts are the proposed developer of the site, and
have been negotiating with IWC for some time to purchase a right of access to
it. Their interest is in the grant of
access across IWC land, not the purchase of this land. Once the access road has been constructed to
adoptable standards, the road will be adopted by IWC.
6.
Four landowners own the development site. IWC does not own land within the development
site.
7.
The development site extends to:
·
22.33 acres of residential development land.
·
5.92 acres of employment development land.
·
14.77 acres of marine development land.
·
Landscaping and public open space
8.
A planning application by Barratts was recently
approved, subject to the signing of a Section 106 legal agreement. This planning approval grants permission for
563
homes (of which 165 will be affordable units), as well as bringing forward
c. 20 acres of serviced employment/marine development land.
9.
Section 106 obligations required as part of that
permission, with an estimate of value to the Isle of Wight, are as follows:
|
Off-site
play area |
£85,000 |
|
Education
payment |
£1,022,000 |
|
Bus
provision |
£100,000 |
|
Community
facility |
£250,000 |
|
Public
art |
£35,000 |
Barratts agent has stated that the cost of these Section 106 contributions to Barratts is £1.492 million. Additionally, there is a social housing subsidy or cost of £5.885million.
10.
One of the landowners has requested that the price
agreed for the purchase of his land be kept confidential. This information has been made available to
DTZ, subject to a confidentiality agreement, to enable them to confirm to IWC
that best value is being achieved. This
information has not been shared with IWC.
11.
The earliest offer by Barratts to IWC for the right of
access was £900,000 in August 2005. It
was at this time that IWC instructed DTZ to act on its behalf to ensure best
value was achieved.
12.
Following extensive negotiations, DTZ has reached an
in principle agreement with Barratts at a figure of £2 million plus 2 acres of
serviced employment land that it is prepared to recommend and sign off as best
consideration.
13.
Barratts has agreed to this payment being made as
follows:
·
if the contract is signed within the agreed timescale,
50% of the £2 million (ie £1 million) is to be paid to IWC ten days after
completion of the Section 106 Agreement or by 15 March 2007, whichever is
the earlier.
·
the remainder of the purchase price (£1 million)
to be paid to IWC on 31 July 2008.
·
the two acres of employment land to be transferred to
IWC on a date to be confirmed (date to be confirmed prior to solicitors being
instructed)
·
an overage clause will be included whereby if planning
permission is granted for any additional residential units over 563 Barratts
will make an additional payment to IWC on a pro rata basis.
14.
The payment being recommended for acceptance provides
IWC with a capital receipt of £2 million plus 2 acres of serviced employment
land, and will assist IWC in achieving
the corporate objectives set out in the Aim High Corporate Plan by
providing affordable housing, contributions towards transport, education and a
community facility, and serviced employment/marine development land.
CONSULTATION
15.
This report has been circulated to officers, the
Cabinet Member and Strategic Director.
16.
The grant of access to Barratts will create a
£2 million capital receipt plus two acres of serviced employment land
(value c. £300,000) to IWC, plus the benefit of £1.492m of Section 106 benefits
and substantial affordable housing to the Isle of Wight.
17.
A budget of £35,489 has been agreed to complete the
grant of access, much of which will be payable as abortive costs even in the
event that the offer is rejected.
LEGAL
IMPLICATIONS
18.
The grant of a right of way over IWC land will open up
possible development on IWC land either side of the roadway.
19.
The Council has the power to sell land under Section
123 of the Local Government Act 1972 and in this respect the land is surplus to
requirements and best consideration has been obtained.
20.
This transaction falls within Special Purchaser
requirements, and accordingly two independent valuations are required. One has been provided by DTZ and is attached
as Appendix A. The other has been
instructed and will hopefully be available prior to this report being presented
to Cabinet for approval. If not it is
requested that the transaction is approved subject to receipt of an acceptable
second valuation, which is to be approved by the Cabinet Member
OPTIONS
(i)
Refuse to grant the right of access to Barratt Homes.
(ii)
Agree to grant access to Barratt
Homes for the proposed consideration of £2 million plus 2 acres of serviced
employment land.
(iii)
Attempt to negotiate a higher figure from
Barratts.
EVALUATION
21.
If IWC refuses to grant access to Barratts there will
be a loss of a £2 million capital receipt and 2 acres of serviced
employment land to IWC.
22.
If IWC refuses to grant access to Barratts, there will
be a loss of 563 new homes (of which 140 will be affordable), £1.492 million
of Section 106 benefits, £5,885,000 social housing value/subsidy and c. 20
acres of serviced employment/marine development land to the Isle of Wight.
23.
The site and access is allocated in the UDP for this
use and therefore the principle of this arrangement being acceptable has been
recognised by IWC, the landowners and the developer for some years. Accordingly, refusal at this late stage
would be difficult to justify and would negatively affect IWC’s credibility.
24.
This has been a high profile planning
application/disposal, the negotiations for which have been ongoing for some
years at substantial cost to all parties involved. Once again, refusal at this
late stage would be difficult to justify.
25.
If IWC agree to grant a right of access to Barratt Homes,
all of the benefits noted in above will be made available to IWC and the
Island.
26.
DTZ has confirmed that the offer represents best
consideration. Following extensive negotiations to date, it is not envisaged
that further negotiations would achieve additional value and could, in fact,
prejudice the figures agreed.
27.
IWC approval not being given within the timescale
proposed could prevent the signing of the contract and/or Section 106 in time
for the first tranche of monies to be received within the current financial
year (by 15 March 2007 latest).
28.
The Section 106 not being available for signing in the
timescale agreed may delay the payment.
29.
The legal process not being progressed within the
timescale proposed may delay monies being received.
30.
If the offer is not accepted and access is not granted
then the Council will not benefit from the capital receipt, plus employment
land, and will have to pay abortive costs.
|
RECOMMENDATIONS
31. Pursue Option (ii) to agree to grant access to Barratt Homes for the proposed consideration of £2 million plus 2 acres of serviced employment land, subject to receipt of a second acceptable valuation report to be subsequently approved by the Cabinet Member for Assets, Planning and Housing. |
BACKGROUND
PAPERS
32.
File.
33.
Appendix
A – DTZ report
Contact
Point : Andrea Jenkins, Senior
Estates Surveyor, '
823263, email: [email protected]
|
DEREK
ROWELL Director
of Development and Regeneration |
COUNCILLOR GEORGE BROWNCabinet Member for Assets,
Planning and Housing |