Agenda item

Report attached.

Councillor Loraine Cox, Portfolio Holder Regeneration and Housing, reported on a proposal to approve the disposal of the Council’s interest in the site at Charter Street, Accrington, for residential development, including accommodation for households on the Council’s housing register, with priority for homeless households and veterans.

Councillor Tony Dobson indicated that he had been initially unsure about the proposal to discount the land and to provide additional one bed apartments in the Borough.  However, the Opposition Group was now happy to support the development based upon the model proposed.  The Leader of the Council commented that Councillor Paddy Short, Armed Forces Champion, had worked hard to bring this scheme to fruition.  The Council had previously signed the Armed Forces Covenant.  Given that the North West was a significant recruitment area for the Armed Forces, there was a strong argument for supporting this development.  A quality design would be produced in partnership with the Council.

Councillor Paddy Short indicated that he had been involved in this project for over two years.  He explained the background to Building for Humanity CIC and its proposals to work with veterans and those requiring support around mental health issues.  Councillor Munsif Dad also commented that the proposals tied in closely with his Lancashire County Council and Borough Council responsibilities and that he viewed this as an exciting development, which would also reduce fly tipping in the area.

Approval of the report was not deemed a key decision.

Reason for Decision

Over the last two years the Council has been in discussions with a local Community Interest Company known as Building for Humanity.  It is a not for profit construction company set-up in Hyndburn, but with its temporary address registered in Cornwall.  Building for Humanity aims to provide affordable housing for deprived households on low income including homeless households and veterans.

Building for Humanity has identified the Charter Street site, which is in the Council’s ownership, for the development of affordable housing for rent and a small number of affordable sales including shared ownership.  The proposed development will comprise of:-

·           15 one bedroom apartments;

·           15 two bedroom apartments;

·           3 four bedroom town houses; and

·           12 x 2 and 3 bedroom semi-detached houses.

The Council is proposing to discount the land and therefore the purchaser would need to agree the standard of accommodation with the Council to ensure high standards that are consistent with Homes England’s Design and Quality Standards, and that the apartments are self-contained with full facilities and not bedsits.

The accommodation is a proposed mix of housing for sale, shared ownership and rent with the apartments let at affordable rents.  In return for a discounted land value, Building for Humanity would be required to grant the Council at least 50% nomination rights to the rented accommodation for initial lets and all relets.

To date, Building for Humanity has not developed any accommodation units and therefore has no track record in developing and managing rented accommodation.  For this reason the Council has insisted Building for Humanity have key reassurances in place to develop a residential scheme of this scale, which includes:

·           Written testimonials and commitments of finance from individual personal backers;

·           Offer of funding in principle subject to legal and financial terms from a specialist finance broker and lender; and

·           Partnership with a construction company with a track record in construction and development.

There has been very limited interest in the Charter Street site for development for commercial, industrial or housing uses.  The only interest within the last ten years has been for a similar housing project, by a charity, for a combined industrial and housing use.  The site has a number of constraints that make it unattractive for development, including:

·           Steel works immediately south, and adjacent to the site;

·           Railway immediately to the north of the site;

·           Potentially contaminated land; and

·           Restricted access with no site frontage.

The site extends to a gross area of approximately 2.25 acres.  The majority of the site is covered by one registered title in the Council’s ownership, but there may be some minor unregistered titles to the edge of the site but not significant at this stage.  In addition, the site is subject to restrictive covenants in favour of the adjoining railway, Network rail etc.  Any development proposals will require prior consent from these.  The actual site proposed for disposal may need to be adjusted to the north of the site to allow for the existing footpath and cycle way to be retained and therefore there is likely to be some adjustment to the site boundary, which would be agreed with the purchaser during legal transaction.

The Council has valued the site for residential purposes at approximately £200,000.  The Council are proposing to dispose of the site to Building for Humanity at nil value which would represent a sale at an under value.  In return, the Council would expect to set minimum design expectations and benefit from nomination rights for households on the housing register.

The Council is permitted to sell land at an under value if it is satisfied that the disposal promotes the social, environmental or economic wellbeing of the Borough or part of it or its residents.  In this case, the proposed disposal meets the wellbeing criteria for the following reasons:

·           Environmental – this is a less than attractive site that cannot be described as a good quality open space and therefore through development of the site there is an opportunity to improve on the local built environment.

·           Social – development of the site will provide much needed new housing accommodation for households in housing need including households on the Council’s housing register.

·           Economic – development of the site would help support the wider economy of Hyndburn.

Alternative Options considered and Reasons for Rejection

The Council could choose at this stage not to agree in principle to disposal of the site to Building for Humanity; however, this could mean forgoing an opportunity to provide new housing for households in housing need including homeless households and veterans.

Resolved                      (1)  That Cabinet notes the proposal made for the Council’s interest in the Charter Street site and agrees, in principle, to the proposed disposal of the site to Building for Humanity at nil value (being satisfied that the proposed disposal promotes the social, environmental or economic wellbeing of the Borough or part of it or its residents as set out in paragraph “3.8” of the report) subject to recommendations (2) and (3) below.

(2)  That Cabinet approves the advertisement of the Council’s intention to dispose of public open space in accordance with Section 123 (2A) of the Local Government Act 1972

(3)  That Cabinet delegates authority to the Head of Regeneration and Housing as follows:

i)   to consider any responses received and, following consultation with the Portfolio Holder for Housing and Regeneration, to decide whether to proceed with the disposal of the Charter Street Site

ii)  subject to a decision being taken to proceed with the sale of the Charter Street site following consideration of the comments received in response to the consultation referred to in recommendation (2) above, to determine the terms of the disposal of the Charter Street site to Building for Humanity, including design standards, disposal mechanism and the site boundaries, following consultation with the Executive Director (Legal and Democratic Services) and provided the sale is made subject to the following preconditions:

a)     The purchaser securing full planning consent for a residential development within nine months of this in principle Cabinet decision to dispose of the site that is acceptable to the purchaser and the landowner, and

b)     The purchaser commencing development within 6 months of securing a satisfactory planning consent for residential development.

c)     For the rented accommodation, the purchaser agreeing to grant the Council a minimum 50% nomination rights in perpetuity i.e. new lets and re-lettings of accommodation, and

d)     The purchaser becoming a registered provider with the Regulator of Social Housing before the transfer of ownership can be concluded.

(4)  That, following agreement and finalising terms for the disposal of the Council’s interest in the Charter Street site, Cabinet authorises the Executive Director (Legal and Democratic Services) to finalise and execute all legal documents and arrangements to secure the disposal of the Charter Street site to the purchaser.