Agenda item

To consider the report of the Strategic Director for Place.

 

The Assistant Service Lead – Development Management (Major Projects) presented the application to modify the s106 legal agreement tied to planning permission ref. 21/1104/FUL to pay a financial contribution in lieu of the provision of affordable private rent units to improve scheme viability.

 

Members received a presentation which included:-

• site location plan;
• aerial views;
• overview of permitted scheme;
• approved site plan;
• streetscenes;
• hardworks plan – landscaped gardens;
• softworks plan – pocket park;
• interpretation centre;
• new footbridge;
• LVIA views – Upper Paul Street, Queen Street and proposed landscaped gardens;
• S106 planning obligations; and
• Recommendation.

 

The Assistant Service Lead – Development Management (Major Projects), the Strategic Director for Place and the Planning Solicitor responded to questions from Members as follows:-

·         details on the viability study were set out in the report;

·         discussions with the developer had started in 2023;

·         the S106 money to be paid by the developer would be capped at £7.5m;

·         the developer had agreed to pay some of the money (£2m) upfront;

·         the remaining £5.5m would be subject to a further valuation exercise;

·         the scheme was expected to be delivered towards the end of 2027;

·         it was difficult to determine how many 1- and 2-bedroom units Exeter City Council would acquire with the £7.5m;

·         the money would be spent on any form of affordable housing, as per the National Planning Policy Framework (NPPF);

·         it was incorrect to state that the deed of variation would result in Exeter losing homes;

·         the deed of variation would make the scheme viable;

·         the funds would come to ECC directly;

·         ECC had used S106 money for the purchase of second-hand homes in the past;

·         up to five years after an application has been approved, the applicant would have to seek the approval of the Council for any further deed of variation. After five years, the applicant could make an application to amend the s106;

·         this was very much a one-off situation caused by exceptional circumstances and had not been the first choice of planning officers;

·         if the present application was refused, the scheme would not be built and the site would remain in its current state;

·         there would be no right of appeal against the decision taken at the present meeting;

·         all types of affordable housing were required in the city;

·         there was no evidence that the city centre is more in need of homes for key workers than any other part of the city;

·         the Planning Committee could not direct how the spending of the S106 money would be conditioned;

·         the S106 money would be ringfenced for affordable housing;

·         interest rates and rising building costs were some of the factors considered by the independent valuer in the viability study; and

·         it was expected that the affordable housing would remain so in perpetuity.

 

Speaking under Standing Order 44, Councillor Moore made the following points:-

·         the affordable housing element was a key factor of the original application;

·         allowing the deed of variation would make the housing crisis worse;

·         the Planning Committee was being asked to give up 20% of bed space;

·         this was too big a decision to gamble on affordable housing;

·         while £7.5m was a considerable sum, it would not solve the housing crisis;

·         there was a clear difference between unlocking sites and building homes;

·         the Council did not provide social housing for single young people;

·         demand was indeed greatest in the city centre;

·         the developer left it late to submit the deed of variation;

·         the Building Cost Information Service (BCIS) forecast price rises were now at 17% (compared to 22% in 2022), and changing the S106 conditions would not make it cheaper to build;

·         the value of the site was only what the developer paid for it;

·         the £1m upfront payment was a delaying mechanism;

·         the developer had factored in an exit yield in their own viability assessment;

·         there was a risk of the developer going bankrupt halfway through the proceedings;

·         there would be a risk of harm to the heritage asset (city wall);

·         the parallel made to the exceptional circumstances of the Clarence Hotel was disingenuous;

·         Exeter City Council are not getting more by receiving £7.5m through the change of S106 conditions;

·         the four wheelchair accessible units would be open-market, when they ought to be affordable; and

·         if the Council was clear in its objections, the developer would have to rethink the scheme.

 

In responses to questions from Members, Councillor Moore made the following

further comments:-

·         seeing as the developers had started demolishing, they should pay £1m upfront if the application was approved;

·         she had not been convinced of the benefits of co-living;

·         even though council housing was not available for single young people, demand was high;

·         rather than escalating the housing failure, refusing the proposal would force developers to come up with a better scheme;

·         it would be better to deliver housing suited to people long-term; and

·         she was not attending the meeting to defend the scheme but to stand up for single young people.

 

The Strategic Director for Place made the following concluding points:-

·         an independent, open-book process had taken place in order to establish viability;

·         exceptional circumstances had resulted in the scheme being unable to be delivered as originally applied for;

·         refusing the present application would result in a blight on the centre of town;

·         officers would have preferred the original scheme but the variation would now make the scheme viable;

·         it was highly unusual for developers to offer to pay £2m upfront; and

·         the question of Members’ preferred type of affordable accommodation was not what was being discussed at the present meeting.

 

During debate, Members expressed the following views:-

 

Councillor Knott:-

·         felt that deliverability was key;

·         highlighted the independent viability assessment;

·         saw the approval of the variation as a means for ECC to take the initiative; and

·         reminded Members that it was only one part of the S106 agreement which was being amended.

 

Councillor Patrick:-

·         recognised the risk of further variations being brought back to Committee in the future;

·         was keen for ECC to secure the funds as soon as possible; and

·         felt it was naïve to think that a ‘perfect’ developer would come forward and take over if the Committee refused the application.

 

Councillor M Mitchell:-

·         reminded Members that the application was controversial when it first came to Committee and had first been advertised a purpose-built student accommodation;

·         supported the recommendation but felt it amounted to a ‘get out of jail free’ card for the developer;

·         saw no guarantee that the developer would carry out the scheme; and

·         stressed the need to ringfence the funds for Exeter.

 

Councillor Jobson:-

·         reluctantly supported the application;

·         felt that key workers would be better off trying to find property on the second-hand market;

·         expressed concern that the developer had taken a long time to finally choose to change the S106 conditions;

·         did not like how ECC were essentially being held hostage by the developer but found it preferable to take the money being offered; and

·         called for any approval to be tied up legally as much as possible.

 

Councillor Ketchin:-

·         referred to other co-living schemes in the city; and

·         advised that he would be making a decision on the application based on what he knew to be true rather than assumptions.

 

Councillor Banyard:-

·         regretted that the project as originally applied for was not deliverable;

·         disputed that a price hike in construction costs counted as exceptional circumstances, given that everything was affected by inflation;

·         felt it important to stand up for Exeter City Council’s Affordable Housing SPD; and

·         would not support the recommendation.

 

Councillor Miller-Boam:-

·         expressed disappointment at the unviability of the original proposal but welcomed the reassurances given by officers as well as the upfront payment from the developer; and

·         was keen to see progress being made as quickly as possible.

 

The recommendation was to delegate to grant completion of a Deed of Variation to the s106 agreement relating to planning permission 21/1104/FUL to pay a financial contribution in lieu of the provision of affordable private rent units.

 

The Chair moved and Councillor Patrick seconded the recommendation, which

was voted upon and CARRIED.

 

RESOLVED to delegate to grant completion of a Deed of Variation to the s106 agreement relating to planning permission 21/1104/FUL to pay a financial contribution in lieu of the provision of affordable private rent units.