Agenda item

Proposal: Application to modify a Section 106 Agreement dated 20 May 2014 relating to housing development.

The Area Lead presented the application as detailed in the agenda. He provided members with a brief overview of the planning history at the site and the events leading to the current situation with construction on the site having stalled. It was noted the last Section 106 Agreement had not been completed and soon after construction at the site had commenced, the building contractor had gone into receivership.

The developer had now come back with the current application as it was no longer viable to provide the previously agreed affordable housing element.  However they were willing to still provide four affordable dwellings.

The Area Lead noted it was an unfortunate situation, and that in hindsight the costs of the contractor collapsing might possibly have been insured against, or at least more fully. He commented the site was well underway and needed to be completed. He highlighted that the advice of the District Valuer was that the original scheme was no longer viable.

Mr R Powell, spokesman for Martock Parish Council, noted their primary concern was to see the site built out as soon as possible. He acknowledged that contractor insolvency could have been better insured against but there was a need to move things forward. The provision of four dwellings was considered acceptable considering the situation. He referred to the needs of housing associations and supported the officer recommendation.

Mr S Coles, agent, commented that Westco had ambitious plans for South Somerset, but there had been a radical change in circumstances affecting the viability of this site. He noted the proposal was supported by officers, and that retendering for the contract had resulted in a reduced offer from the affordable housing provider. He noted that being a charity they were unable to ring-fence profits. As a way forward they proposed to deliver four shared ownership houses.

Ward member, Councillor Neil Bloomfield, noted it was an unfortunate situation. Referring to the contractor insolvency he commented that for want of an insurance policy SSDC seemed to be being asked to pick up the tab. He did not support the officer recommendation.

Ward member, Councillor Graham Middleton, commented he wished to see the site built out sooner rather than later. He referred to pages 63 and 64 of the agenda and noted that the 12.22% profit would equate to nearly £1 million, and queried if instead of it being incorporated into the charity if it could be used to provide the affordable housing element.

During discussion, comments raised by members included:

·         What’s proposed will get the leisure contributions delivered and the development completed.

·         Further negotiations should take place

·         Martock needs affordable housing and some people had already been promised properties

·         If development not completed it will deteriorate further

·         Feel no option but to accept the officer recommendation

·         Don’t like it but could end up with nothing.

·         If we say no what will the developer do?

·         Don’t feel developer will walk away as too much invested in the site

·         Even if the application is approved there is no guarantee the development will be completed.

In response to other comments made the Area Lead clarified that:

·         The District Valuer advice it is reasonable for the developer to take a level of profit, but we cannot say where that profit should be spent.

·         Unknown if any insurance would have covered the full costs of the contractor collapsing, and would be a risk for any development.

·         Only for the developer willing to take a lower profit were they offering the shared-ownership element now proposed.

·         Negotiations had taken place and the applicants did not feel they could provide any more affordable housing.

The Area Lead acknowledged the strong member concerns. He mentioned it might be possible to look at inserting an uplift clause, however it was probable the developer would be finished on the site within a relatively short period and it was unlikely the viability would improve over that timescale. He explained that an uplift clause might therefore incentivise the developer to complete the site. He advised members a way forward would be to invite the agent to comment on the suggestion of adding an uplift clause.

The Chairman invited the agent to comment – in response, the agent asked for a few minutes to speak with his client who was present at the meeting.

(The Chairman adjourned the meeting for about five minutes to enable the agent to speak with his client, and for the Chairman, ward members and Area Lead to receive legal advice.)

When the meeting reconvened, the Area Lead summarised the discussions that had taken place. He advised that the developer and agent were happy to accept an uplift clause for a final viability review upon occupation of the last house. A proportion of any profits above 12.22% to be recovered as a contribution towards affordable housing in Martock, and the detail of the clause to be agreed with the ward members.  It was proposed to approve the application, as per the officer recommendation, subject to the addition of an uplift clause. On being put to the vote, the proposal was carried, 10 in favour, 2 against with no abstentions.

(Voting: 10 in favour, 2 against, 0 abstentions)