Vaughan Road Development Site
To consider the report of the Director of City Development.
Additional documents:
Decision:
Agreed:
RECOMMENDED that Council:-
(1) note the content of the report and the funding arrangements to deliver phases B and C of the scheme;
(2) approve a Capital Budget of £22 million to deliver phases B and C;
(3) grant delegated authority to the Director Finance (Section151 Officer) and the Director City Development in consultation with the Portfolio Holder for Council Housing Development and Support Services and the Leader of the Council, to finalise the most advantageous combination of borrowing, Homes England grant and Housing Revenue Account capital to successfully deliver the scheme; and
(4) approve that notice be given to Exeter City Living Limited in accordance with the Development Agreement between Exeter City Council and Exeter City Living Limited to carry out and complete phases B and C of Development.
Reason for Decision: As set out in the report.
Minutes:
The Executive received the report on the Vaughan Road development site to develop 91 homes. The first phase (phase A) of the scheme was approved at Executive on 7 February 2023 and was underway to deliver the first 35 homes. In order to address ongoing viability challenges for the final 2 phases of the scheme commercial work had been undertaken to consider the cost for phases B & C, in delivering 56 new homes.
Particular reference was made to:-
· the first phase of the development had received a budget allocation of Right to Buy receipts and the requested allocation would come from HRA right to buy receipts;
· modelling had been based on current interest rates, and financial markets would be considered to minimise borrowing and refresh the viability model; and
· work was being undertaken with contractors on reducing costs and timing was critical to move the project forward.
Councillor Jobson, as an opposition group leader, had submitted questions, which were tabled at the meeting and appended to the minutes.
Councillor M. Mitchell, as an opposition group leader, spoke on this item, he enquired on the potential of the project not breaking even over a 50 year period, if interest rates rise.
Members welcomed the report and noted the risks related to cost rises impacting on the financial modelling, but acknowledged delays would impact on the development of the new homes.
RECOMMENDED that Council:-
(1) note the content of the report and the funding arrangements to deliver phases B and C of the scheme;
(2) approve a Capital Budget of £22 million to deliver phases B and C;
(3) grant delegated authority to the Director Finance (Section151 Officer) and the Director City Development in consultation with the Portfolio Holder for Council Housing Development and Support Services and the Leader of the Council, to finalise the most advantageous combination of borrowing, Homes England grant and Housing Revenue Account capital to successfully deliver the scheme; and
(4) approve that notice be given to Exeter City Living Limited in accordance with the Development Agreement between Exeter City Council and Exeter City Living Limited to carry out and complete phases B and C of Development.