Issue - meetings

(Cabinet Member with Special Responsibility Councillor Mace)

Report of Corporate Director (Regeneration).

(Cabinet Member with Special Responsibility Councillor Mace)

The Corporate Director (Regeneration) submitted a report updating Cabinet on progress on this key regeneration project, explaining why this development is currently stalled and to present proposals for how the Council might facilitate a satisfactory and timely project delivery.

The options, options analysis, including risk assessment, were set out in the report as follows:

Options:

Market conditions severely constrain what can reasonably be done. To make progress the only option available is

Option 1 is for the NWDA to grant the Council funding for it to clear and remediate the site and undertake essential infrastructure works and thereby ready the site for development when the market starts to recover. (The Developer costs such works at some £5.2 million).

The alternative, Option 2, is to do nothing.

Analysis:

Officers consider that option 1 is the only one available. Doing nothing is not realistic, not least because obligations on the Council under the JFA and its contract for ERDF funding put it at substantial financial risk until it delivers or at least can assure full development delivery. In total, funding for some £5 million of expenditures already made is at stake and, in the worst-case scenario, the Council would be left with expenditure to this amount unfunded.

In addition, doing nothing would have serious implications for regeneration and planning. The full potentials of this development in terms of the environmental improvements, homes and jobs that it should deliver will not be realised. There will be no significant inward investment into the wider Luneside area for years to come.  Failure to develop out this site and, because of this, prospectively other sites, will also mean the Council’s total housing delivery is lowered and developers will be in a stronger position to force the Council to release Greenfield sites instead.

A related point is that terminating the involvement of the Developer is neither sensible nor reasonable at this stage. The developer has undoubted capacity, knowledge, commitment and readiness to deliver and the Council can mitigate its risks significantly by keeping the Developer with it so it can draw on its knowledge and experience. Further, the reasons the Developer cannot proceed as planned are no fault of its own. 

Option 1 is also deliverable (subject to a positive funding decision). The NWDA (and also the HCA) has the discretion to grant the Council sufficient funding to undertake the works described and a variation to the JFA would be the mechanism. The Corporate Director (Regeneration) has the delegated authority to apply for such external funding. The Council owns the whole site and therefore would have full site control. It is practised as an accountable body. Planning Services’ Engineering Team has the capacity and expertise to act as client for the works. This team is well versed in mechanisms for managing and mitigating risk (including cost risk) in contract management.  To maximise efficiencies and minimise costs the Council should secure services from the Developer’s expert consultancy team to assist  ...  view the full minutes text for item 165