Agenda item

Report from Gravitas Housing Ltd.

(Enclosure)

Decision:

The Committee

1.    Notes the details of the scheme set out in the report submitted by Gravitas Housing to develop the land for sale at market value, including the updated financial appraisal and the phasing of the project over an 18-month period

2.    Recommend to Cabinet the sale of Council owned land at Wherry’s Lane to Gravitas at the market price of £220k which reflected the Council’s affordable housing policy requirement

3.    Note that funding of the scheme had already been approved by the Council

4.    Note the arrangements for procuring the scheme by way of a design and build contract tender process

5.    Note that regular reports would be submitted on the progress of the scheme

In presenting the report, the directors of Gravitas Housing explained that the Council had been commissioned to put together a proposal for a site at Wherry’s Lane, Bourne, which would form phase 2 of the development of the area. At its meeting in April 2017, the Shareholder Committee had considered the principle of development on the site and tasked the directors to provide more information on potential yields, tenure and composition.

In order for the development to proceed, the Committee was asked to recommend to Cabinet, the release of the land for market value, which had been assessed through the independent appraisal of the district valuer.

The report included an indicative timetable for delivery. Members were advised that the site was an attractive first development for the company because of its scale and the speed with which it could be delivered.

Some discussion ensued on the financial benefits that the company could deliver for the Council and the potential tax implications for both the company and the authority. Committee members were informed that the Council would receive a return on its financial investment through the repayment of the commercial loan it made to the company. The Council would also re-charge the company for the time the directors spent on company business and for the use of Council facilities or equipment for the purposes of the company.

A question was asked whether Gravitas intended to set up project companies that could be disposed of when development was completed and the company’s liability had ended. The directors advised that they would consider this option but would need to have arrangements in place for ongoing responsibilities for the common parts of the development.

A question was also asked about the planning risks associated with the project. Pre-application advice had been sought on the proposal; the site was a brown-field site in a town centre and the development of such sites was strongly advocated by government.

A request was made that the development should be built to a high environmental standard and that this should be incorporated within the tender documents for the design and build contract. The company directors gave assurances that they aimed to deliver a high quality development and would take advice on market demand for such enhancements. However they affirmed that the development would be based around the best market solution and commercial return.

11:41 – Councillor Lee left the meeting

The recommendations in the director’s report were proposed, seconded and agreed.

11:51 - The exempt session was closed