Progress update on the Wherry’s Lane development project.
Representatives from Gravitas presented a progress summary in respect of the Wherry’s Lane development project:
· Pre-commencement conditions had been discussed with the Development Management team and proposed materials had been agreed
· Leasehold agreements were being drawn up in preparation for the marketing of the units
· The main contractor had been appointed following a procurement exercise
· The preparation of marketing materials was underway
· Marketing of the development was scheduled to commence in February 2019
· The Section 106 Agreement had been signed
· The ‘Help to Buy’ application had been submitted
Members noted that costs associated with the project had been increased due to contamination found on site. Some of the additional costs had been offset by identifying capacity within the main contract and eliminating duplicated items. The Gravitas representatives were optimistic that the additional costs would reduce significantly as the development progressed and that there would be sufficient scope to mitigate the impact of the additional costs on the project. Members expressed concern about the duplication of costs in the accepted contract and the additional charges for removing the contaminated soil; the Directors were working with the contractor on reducing the costs. As Gravitas had been created to generate financial returns, the Shareholder Committee stated that the target should be to have no additional costs and asked that an update be provided at its next meeting.
Committee Members also discussed the sampling methodology that had been used during the initial site survey and whether there were lessons that could be applied to future projects.
While Committee members noted that the anticipated profit of the development was below the threshold that a commercial company would consider acceptable, there were wider benefits that would be experienced by the Council. These wider benefits included the price of the land paid by the company to the Council, affordable housing delivered through the Section 106 Agreement, income from Council Tax, interest on the loan made by the Council to the company and cross charges between the Council and the company. During this discussion Members referred to the aim with which the company had been formed.
The primary audience for the marketing of the development was homeowners, but Members were made aware that there was a potential for interest to come from investors even if investors were a secondary focus. The intention was to release the properties over two phases; the first would test market appetite and any necessary adjustments would be made prior to the rollout of the second phase to take account of that. It was anticipated that the first phase would be available for completed and ready for occupation in August 2019.
Members of the Committee were assured by the Directors and representatives of Gravitas that, to date, there had been no time slippage in the project plan. Councillors were interested in the clauses and penalties that would be applied in the event of any time slippage; it was requested that these be shared with the Committee at a future meeting.
The Directors advised Members that a company had been engaged to manage getting utilities onto the site, with the Committee noting that the required infrastructure was put in place as part of phase 1 of the development.
Ø Members to be provided with an update on the costs for the removal of contaminated soil together with information on the mitigation of those costs at the next meeting of the Committee
Ø Members to be provided with those contract clauses that pertain to penalties for slippage against the schedule of works at the next meeting of the Committee