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Future High Streets Fund Bid

Meeting: 05/09/2019 - Cabinet (Item 36)

36 Future High Streets Fund Bid pdf icon PDF 142 KB

Summary:

 

This is a key decision as the Council could incur expenditure or savings beyond the threshold agreed by the Council.

 

The report provides the Cabinet with details of the Future High Streets Fund bid and sets out the next stages in the bidding process.

 

The Ministry of Housing, Communities & Local Government (MHCLG) is looking for ‘shovel ready’ schemes as part of the bidding process. They have now advised that to be considered as ‘shovel ready’, the scheme would need to have planning in place. In order to progress the Co-op project so that it can form a central part of the Council’s bid, the developer for this project now needs to push forward with the planning application. The developer would normally wait until any viability issues with the scheme have been addressed before submitting a planning application. Therefore, the Council will need to underwrite the planning fees to the sum of £1.4m to mitigate the developer’s risk in the event that the scheme is unable to proceed.

 

Recommendations:

 

1.    That progress on the Future High Streets Fund bid be noted; and

 

2.    That the Council underwrites the planning application fee(s), in the sum of £1.4M, in respect of the Co-Op scheme, in the event that the scheme does not proceed.

Additional documents:

Minutes:

The Cabinet considered a report detailing progress with the Council’s bid for funding from the Future High Streets Fund in respect of the Co-Op development scheme and setting out the next stages in the bid process. The Council’s initial ‘Expression of Interest’ had been selected to go forward to the next assessment stage which would involve producing a full business case for submission to the Ministry of Housing, Communities & Local Government in November 2019 (MHCLG).  

 

The Chairman stressed that this scheme was an important part of plans to reinvigorate the High Street which also reflected the changing nature and mix of offerings needed to have a vibrant High Street. He said that the Council was a key player in taking this forward and that it was right for the Council to invest in the future of the scheme.  

 

The Strategic Director (Internal Services) explained that the MHCLG was looking for schemes that were ‘shovel ready’ and could progress quickly and to be considered as ‘shovel ready’, the scheme would need to have planning permission in place. In order to progress the Co-Op project so that it could form a central part of the Council’s bid, the developer for this project now needed to submit a planning application. In normal circumstances the developer would wait until any viability issues with the scheme had been identified and addressed before submitting a planning application. Given the timescales involved this would not be possible and in order to submit an application the developer was therefore looking for the Council to underwrite the costs of moving the scheme to the planning stage to the sum of £1.4m to mitigate the developer’s risk in the event that the scheme was unable to proceed.

 

The Chairman explained that the Council would be an important stakeholder and that it was proper for the Council to have ‘skin in the game’. He felt that a potential contribution of £1.4M in order to progress a scheme that was likely to involve a much greater total investment was reasonable in order to move the project forward. He noted that some Members of the Cabinet Advisory Panel had expressed concern that the Council was being asked to provide a guarantee to underwrite the developer’s costs, and ultimately their profits, to the tune of £1.4M when there was no certainty that the Council’s bid for Central Government funding would be successful. However the Cabinet Advisory Panel had welcomed the regeneration opportunities arising from the development and strongly supported the bid and endorsed the recommendations contained in the report. It was however suggested that the Cabinet might wish to caveat the underwriting of the developers costs to install a timeframe, or backstop, to the period during which it was prepared to underwrite these costs as well as capping the amount at £1.4M. Cabinet felt that, given that the amount was capped at £1.4M and that any further expenditure would require further Cabinet approval, it was unnecessary to install a backstop.

 

The Chairman thanked the  ...  view the full minutes text for item 36


Meeting: 02/09/2019 - Cabinet Advisory Panel B (Item 9)

9 Future High Streets Fund Bid pdf icon PDF 142 KB

Summary:

 

This is a key decision as the Council could incur expenditure or savings beyond the threshold agreed by the Council.

 

The report provides the Cabinet with details of the Future High Streets Fund bid and sets out the next stages in the bidding process.

 

The Ministry of Housing, Communities & Local Government (MHCLG) is looking for ‘shovel ready’ schemes as part of the bidding process. They have now advised that to be considered as ‘shovel ready’, the scheme would need to have planning in place. In order to progress the Co-op project so that it can form a central part of the Council’s bid, the developer for this project now needs to push forward with the planning application. The developer would normally wait until any viability issues with the scheme have been addressed before submitting a planning application. Therefore, the Council will need to underwrite the planning fees to the sum of £1.4m to mitigate the developer’s risk in the event that the scheme is unable to proceed.

 

Recommendations:

 

1.    That progress on the Future High Streets Fund bid be noted; and

 

2.    That the Council underwrites the planning application fee(s), in the sum of £1.4M, in respect of the Co-Op scheme, in the event that the scheme does not proceed.

Additional documents:

Minutes:

The Cabinet Advisory Panel received a report detailing progress with the Council’s bid for funding from the Future High Streets Fund in respect of the Co-Op development scheme and setting out the next stages in the bid process. The Council’s initial ‘Expression of Interest’ had been selected to go forward to the next assessment stage which would involve producing a full business case for submission to the Ministry of Housing, Communities & Local Government in November 2019 (MHCLG).  

 

The MHCLG was looking for schemes that were ‘shovel ready’ and could progress quickly and had advised that to be considered as ‘shovel ready’, the scheme would need to have planning permission in place. In order to progress the Co-Op project so that it could form a central part of the Council’s bid, the developer for this project now needed to submit a planning application. In normal circumstances the developer would wait until any viability issues with the scheme had been identified and addressed before submitting a planning application. Given the timescales involved this would not be possible and in order to submit an application the developer was therefore looking for the Council to underwrite the costs of moving the scheme to the planning stage to the sum of £1.4m to mitigate the developer’s risk in the event that the scheme was unable to proceed.

 

Members welcomed the scheme and the benefits that it offered for the vitality and development of the town centre. However some Members expressed concern that the Council was being asked to provide a guarantee to underwrite the developer’s costs, and ultimately their profits, to the tune of £1.4M when there was no certainty that the Council’s bid for Central Government funding would be successful. They were also concerned that the development should not experience the same problems previously encountered with the Lowfield Street development and questioned the impact if the Council had to pay the developer out of New Homes Bonus money.

 

The Strategic Director (External Services) explained that this was a key site and that the Council would work closely with the developer to ensure that it went ahead, including exploring other options to ensure that the scheme remained viable where appropriate. The project was substantially different from the Lowfield Street development where delays had been due to the approach taken by Tesco as the landowner. The payment of £1.4M to the developer would only be made if the scheme became unviable and could not progress and would be made to cover the costs incurred by the developer in progressing the scheme to the stage when it could be deemed to be ‘shovel ready’. This money would not come from revenue budgets but from New Homes Bonus money which was held as a reserve.  A Member also asked for an explanation of what viability issues might arise and was advised that this might cover anything which meant that the development was not cost effective for the developer to the point that the scheme then became commercially unviable  ...  view the full minutes text for item 9