This report provides an update with respect to the Wherry’s Lane, Bourne Development Project.
The Chairman introduced the agenda item to the Committee noting that due to an administrative error, the exempt appendices to the report had been published publicly. Questions would be welcome on the report and appendix, however as the Company was an ongoing business concern Members were to be mindful of what was being discussed publicly. The Chairman stated, if necessary, Members would need to consider resolving the exclude the press and public, to continue discussions.
It was re-iterated that on the completion of the project and sales within Gravitas Housing Ltd, the Committee would have a full review of the business, in the public domain.
The Committee were presented with a report of Gravitas Housing Limited, the report provided an update on the Wherry’s Lane, Bourne Development Project.
The Leader noted that when the scheme was first enacted it was with a 5% profit target, this being different to most private sector developers who would aim to make a 20% profit. The main aim of the project was regeneration of Bourne Town Centre, part of Gravitas Housing Ltd aim was to bring forward projects that the private sector would not. The Council also received as part of the project £150,000 in New Homes Bonus, but also received Council Tax from those occupied properties and added town centre affordable homes.
Members were advised that the Company were working with their property agents to ensure the remaining units were sold. The remaining units did not have gardens, due to the pandemic the market had changed, gardens were much more desirable than pre-pandemic. The Company had addressed this with the agents and a re-evaluation of the market value had taken place and the property asking prices were amended accordingly. This had therefore had a negative impact on the profit margin. One further unit had sold since the publication of the report, with now only 7 remaining units.
Members of the Committee raised the following:
· When Gravitas Housing was set up Members re-called that it was described as the way of working for the future, was that still anticipated?
The Company’s aim was to encourage regeneration within Bourne Town Centre, to bring forward development opportunities that the private sector would not necessarily have brought forward, due to low anticipated profits. Its aim was not to be in competition with private sector developers.
· When all of the properties were sold would Gravitas Housing Ltd cease trading, or were there any other future projects?
No decisions had been made on the future of Gravitas Housing Ltd, as the shareholder, Council would need to debate and take any decisions. Companies Committee would be a part of that process and make any recommendations.
· When would Bourne see the benefit of s106 funds paid as part of the development?
The section 106 funds had been used towards the HRA project - Manor Court, Bourne, which was almost at completion.
· Why had the Company considered the Council using the remaining unsold properties as council housing?
Members were advised that this had been investigate, it was noted that Housing Revenue Account (HRA) properties were subject the Right to Buy and there would also be tax implications for the company which would have further impact on its projected profits.
· It was noted that Gravitas Housing had part repaid the loan from South Kesteven District Council and Members enquired if the loan would be paid back in full.
The loan was to be paid within its maturity period of 15 years, Gravitas Housing Ltd had part repaid with funds they had available. This reduced any interest charges on the loan for the Company, the ability to part repay was set out as part of the loan agreement. It was confirmed that the loan would be re-paid in full.
· Requested detail on the difference of the forecasted costs for construction and actual costs.
· What benefit in monetary value of what the project to the Council, but also any costs.
It was confirmed that the information would be included within the final report to the Committee, on completion of the Wherry’s Lane, Bourne Project.
That the full costs of construction of the Wherry’s Lane, Bourne Development be included within the final report, on completion of the Project.
That costs and benefits of the project to South Kesteven District Council also be included within the final report of the Wherry’s Lane, Bourne Project.