CORBY BOROUGH COUNCIL LOCAL BROWNFIELD STRATEGY

Date: February 2012 CONTENTS Page No.

1.0 INTRODUCTION 2.

2.0 POLICY AND ECONOMIC CONTEXT 4.

3.0 EVIDENCE BASE REVIEW 11.

4.0 PROPERTY MARKET REVIEW 13.

5.0 REVIEW OF IDENTIFIED SITES 18.

6.0 FINANCIAL ANALYSIS 22.

7.0 POTENTIAL MEASURES TO SUPPORT SITE DELIVERY 24.

8.0 APPROACH TO DELIVERY OF THE DEVELOPMENT ON BROWNFIELD SITES 31.

9.0 MONITORING AND EVALUATION 42.

10.0 CONCLUSIONS 43.

ANNEXES

I MARKET ASSESSMENT II APPENDIX D PROFORMA III SITE EVALUATION PROFORMA IV DELIVERY PERIOD FOR THE SITES V PLANS IDENTIFYING VARIOUS CLUSTERS VI PRELIMINARY VIABILITY ASSESSMENTS 2

1.0 INTRODUCTION

The purpose of the Local Brownfield Strategy (LBS) is to provide a better understanding of a sample stock of brownfield sites taken from NLUD within Corby and identify those sites that can be returned to beneficial use, for hard and soft end uses, the timescales against which this can be achieved and the actions needed to achieve site specific goals.

For the purposes of this Strategy, brownfield land is defined in accordance with Planning Policy Statement 3 (PPS3) as being sites “that which is or was occupied by a permanent structure, including the curtilage of the developed land and any fixed surface infrastructure”.

The Strategy makes specific reference to a total of 21 separate sites comprising 16 Essential Sites of which 15 fall within a further five Desirable Sites. This sample of brownfield sites have been identified by the Borough Council and provide a total gross development area of 235 hectares and estimated net developable area of 181 hectares. An inspection of each of these sites has been undertaken and consideration given to their development potential. This report considers the potential future uses of these sites for a range of uses, the existing barriers to development and recommendations as to the steps which may be necessary to overcome these barriers in the context of current market conditions and the existing public sector funding environment.

The Strategy seeks to identify a potential level of development on the identified brownfield sites for uses including residential, industrial/warehousing and office uses in the short (0-5 years), medium (6-10 years) and longer (11 years and beyond) term.

It is noted that the Local Brownfield Strategy will potentially be used by Corby Borough Council to deliver the following objectives;

 To inform the review of the Core Strategy.  To support the Site Specific Allocations DPD 2009 approach to guide future development across the Borough in a sustainable manner.  To respond to national guidance in PPS3 requiring Local Authorities to undertake strategies and interventions to bring previously developed land back into use in line with local and national targets.  To inform a planning policy context to bring brownfield land back into use.  To improve the understanding of the supply of brownfield land across the Borough and factors affecting the delivery of these sites.  To inform policies and strategies relating to bringing brownfield sites into reuse.  To consider an approach to funding where required to support the development of brownfield sites.  To prioritise key opportunities and early wins in the development of brownfield sites across the Borough.

The Strategy is set out within the following sections;

1.0 Introduction 2.0 Policy and Economic Context – Commenting on national, regional and local policies. 3.0 Evidence Base Review – Considering previous relevant studies and research and their impact on the subject strategy. 4.0 Market Review – A review of current market conditions including commentary on supply and demand related issues within the Borough. The section considers factors affecting the supply side including development viability, site constraints such as site conditions, availability of finance and developer confidence.

______

Corby Borough Council Local Brownfield Strategy – February 2012 3

5.0 Review of Identified Sites – An analysis of the 21 sites is undertaken, including an assessment of the more appropriate future use for each site and anticipated timescale for bringing forward individual development projects. 6.0 Financial Analysis – To consider the preliminary assessment of viability of the development proposals for each site and deliverability of sites on this basis. 7.0 Potential Measures to Support Brownfield Site Development – To consider the various funding opportunities and delivery mechanisms which are available at the current time to support the development of brownfield sites. 8.0 Consideration of Potential Interventions – To consider the specific measures which will support the delivery of the development of brownfield sites across the Borough. 9.0 Monitoring and Evaluation – This section considers the requirement for ongoing update of the strategy to ensure that it may be maintained as a “live” document. 10.0 Conclusions

The Local Brownfield Strategy is set out as follows;

______

Corby Borough Council Local Brownfield Strategy – February 2012 4

2.0 POLICY AND ECONOMIC CONTEXT

2.1 Introduction

The past 18 months have seen major changes within the political landscape and economic structure, which have resulted from changes within the economic climate post recession and also following the election of the Coalition Government, which has seen implementation of radical reform to the public sector and funding regimes. Subsequently, extensive cuts to budgets have been implemented in seeking to address the £156 billion budget deficit. In addition, the Coalition have introduced the new “localism” agenda – the full impact of which is difficult to assess at the current time.

Consequently, the existing structure of Regional Development Agencies including East Midlands Development Agency (emda) who have taken a key role in the funding of economic regeneration within the East Midlands is disappearing (together with the emda investment budget of around £155 million per annum). The Homes & Communities Agency (HCA) which supported the delivery of market and affordable housing has seen its budget cut by over 40% with its role proposing to be reduced from that of landowner, development partner and grant provider to that of development enabler and investor, who would be seeking longer term financial returns in relation to investment made.

Many of the functions of the Regional Development Agencies have now been passed to the recently created Local Enterprise Partnerships (LEPs) and the Northamptonshire LEP comprises one of the 38 LEPs approved by Central Government. However, the new LEPs have not had any allocated revenue or capital budgets until recently, when, we understand the under spend on RGF Round 1 has been allocated to a number of LEPs as the new Growing Places Fund. Ultimately however as private sector led organisations, the LEPs future role is likely to be the coordination and prioritisation of investment within the LEP boundary. Although not specifically determined at this stage, it is clear that Central Government regard the LEP as a key consultee in new policy within this area. The various LEPs are currently seeking to establish individual business plans and working structures.

The March 2011 Budget announced the creation of 21 Enterprise Zones (EZs) across the Country, with similar range of measures as the 1980s models with simplified planning policies, capital allowances and occupiers benefiting from business rate exemption for up to 5 years and capital allowances relief of up to 100% in six of the zones and 18% in the remaining zones. It is noted that EZs are to be identified by the various LEPs and proposals may be made for an EZ within the Northamptonshire LEP area.

The Coalition Government has sought to replace the investment provided by Regional Development Agencies and Central Government Agencies including Business Innovation and Skills (BIS), Constitution and Local Government (CLG) and Department for Transport (DfT) into projects on a national basis such as the Regional Growth Fund (RGF), with a first round of bids received in January 2011. Preferred schemes for RGF were announced in March 2011, with a second round of bids announced in April 2011 with applications invited for July 2011. The announcement of selected projects from the July bidding round was confirmed in October 2011 A total of 119 bids were approved with seven in the East Midlands. The first round of bids were made against an allocation of £150 million while the second round of bids was against an allocation to be around £250 million.

The above changes are made in the context of a reduction in the Central Government funding of Local Authorities which typically provides for a 20-25% reduction in the budget of individual Local Authorities phased over a three year period.

______

Corby Borough Council Local Brownfield Strategy – February 2012 5

The potential ramifications of the severity of funding cuts and radical reform imposed upon an economy beginning to recover from economic recession has raised concerns for the economy to slide into a “double dip recession”. The spending cuts come at a time when private sector activity is hampered through limited availability of private/bank investment thus curtailing private sector operations and growth. The Coalition Government have introduced new measures and programmes to replace some public funding regimes; however the effectiveness of such programmes and whether they enable regeneration of deprived areas to continue remains to be seen.

The current position with the UK economy remains one of fragility and uncertainty, particularly in context of the financial disorder in the Eurozone and potential default by Greece on debt repayment. There are levels of impacts on the global banking sector should Greece default which could see a second financial crisis within the finance sector.

The UK economy has been reported to have grown by 0.1% during the second quarter of 2011, which is 0.2% less than growth for the same period in 2010.

In response to these latest issues, the Bank of England announced a £75 billion expansion of its quantitive easing programme to try and stimulate lending by the banks. However the Bank of England was forced to abandon part of this programme after traders drove up the price of gilts. Whether quantitive easing will be resumed by the Bank of England remains unknown and predictions for the UK economy remain gloomy.

In the context of the above circumstances and future uncertainty in respect of the availability of public funding, areas such as Northamptonshire will be required to identify alternative strategies in order to build upon and drive forward successful regeneration within their area. The LBFS should identify potential mechanisms to deliver physical regeneration within Corby in the context of the current economic and market climate and in seeking to continue with the regeneration of Corby.

2.2 Policy Context

2.2.1 National Policy Context

The Government has announced proposals to replace the collection of planning policy statements and guidance with a single National Planning Policy Framework. In the interim period, relevant policies are summarised as follows;

Planning Policy Statement 1 (PPS1): Delivering Sustainable Development

PPS1 contains the overarching policies and principles that underpin the Government’s approach to planning. It seeks to ensure plans and proposals achieve sustainable development objectives, adopt a spatial approach, promote high quality inclusive design and allow for community involvement.

Paragraph 27 contains the advice note for the delivery of brownfield land, requiring Local Authorities to prepare development plans to seek to promote the more efficient use of land through the use of suitably located previously developed land and buildings. Accordingly, vacant and underused brownfield land and buildings should be brought into beneficial use to help to achieve targets set for brownfield land.

______

Corby Borough Council Local Brownfield Strategy – February 2012 6

Planning Policy Statement 3 (PPS3): Housing

PPS3 was published in June 2010 with the key policy goal of ensuring that all people had the opportunity of living in a decent home, which is affordable and in an appropriate location. This may be achieved by undertaking of the following;

 Broadening the choice of affordable and market homes.

 Improving affordability.

 Increasing the supply of housing.

 Widening opportunities for home ownership.

 Creating sustainable, inclusive and mixed communities.

The requirement for sustainable communities indicates a requirement for the need to provide housing with access to a range of community facilities, jobs, services and infrastructure.

The policy also identifies a requirement that 60% of national annual requirement for new housing is to be built on brownfield land. Local Planning Authorities are also required to consider “strategy for bringing previously developed-land into housing use – and should consider arrangements, incentives or intervention that could help to ensure that previously developed land is developed in line with local housing trajectories.

PPS3 requires Local Authorities to address the following issues;

 Address the obstacles to the development of vacant or derelict sites to resolve land ownership/assembly issues;

 Consideration of whether sites with employment or commercial allocations could be appropriately re-allocated for housing; and

 Use of public sector previously developed land.

PPS3 now places a requirement on individual Local Authorities to produce a Strategic Housing Land Availability Assessment (SHLAA) as part of an approach to monitor, manage and ensure that sufficient, suitable land is available to achieve housing on previously developed land. SHLAAs have assisted in identifying potential sites for residential development including anticipated delivery over a 15 year period. The SHLAA also identifies constraints associated with bringing potential sites forward and how these can be removed to improve the potential for housing delivery.

Planning Policy Statement 4 (PPS4): Planning for Sustainable Economic Growth

PPS4 considers potential for reuse of premises suitable to meet the requirements of businesses, addressing issues of quality, accessibility and proximity to market as well as accessibility by required workforce.

The PPS includes a sequential testing approach to ensure that priority should be given to town centre and edge of centre sites before any consideration is given to out of centre development opportunities.

______

Corby Borough Council Local Brownfield Strategy – February 2012 7

Planning Policy Statement (PPS12): Local Spatial Planning

PPS12 promotes the concept of place making and provides one of the principle grounds of justification for the compulsory purchase of land by public sector agencies to allow regeneration projects to be undertaken.

Planning Policy Guidance Note 17 (PPG17): Planning for Open Space, Sport and Recreation

The guidance concludes that the principal purposes of local brownfield strategy should be to identify those sites which can be returned to beneficial uses, the timescales against which delivery can be achieved and actions needed to achieve the site specific roles.

The guidance of PPG17 is aimed at maintaining an adequate supply of open space in sport and recreation facilities, although it is recognised that all land and buildings in recreation use of equal merit and may be surplus to requirements or in need of an alternative use. PPG17 advises the Local Authorities to consider using brownfield sites in preference to greenfield sites when locating new areas of public open space, sport and recreation facilities.

Planning Policy Statement 23 (PPS23): Planning and Pollution Control

The statement notes that bringing brownfield sites back into beneficial use will mitigate risks to health and the environment from polluted sites.

PPS23 notes the present contamination of land can present risks to human health and the environment and can restrict the beneficial use of land although highlights that new development offers the opportunity to deal with these risks potentially for the wider benefit of the communities.

Planning Policy Statement 25 (PPS25): Development and Flood Risk

The statement sets out the Government’s Spatial Planning Policy on development and flood risk.

The policy seeks to ensure that flood risk is taken into account at all stages in the planning process, to avoid inappropriate development in areas at risk of flooding and to direct development away from areas at highest risk.

Local Authorities are therefore required to implement planning strategies that help to deliver sustainable development by;

 Identifying land at risk and the degree of risk of flooding from river, sea and other sources in their areas.  Preparing Regional Flood Risk Appraisals (RFRAs) or Strategic Flood Risk Assessments (SFRAs) as appropriate, as freestanding assessments that contribute to the Sustainability Appraisal of their Plans.

2.2.2 Regional Planning Context

The East Midlands Regional Spatial Strategy currently directs the locations of development and set targets for housing completions within the Region.

The Coalition Government has abolished Regional Spatial Strategies on the basis that they were viewed to be failing and placed too great a focus on housing compared to other ______

Corby Borough Council Local Brownfield Strategy – February 2012 8 elements within the RSS. The responsibility for setting the targets for new housing and other development may reside with individual Local Authorities and/or the LEPs. In the case of Corby the North Northamptonshire Joint Planning Unit (NNJPU) has produced a draft Statement of Intent on housing targets for North Northamptonshire that outlines how housing requirements for North Northants will be assessed. The assessment will be through the review of the adopted North Northamptonshire Core Spatial Strategy (CSS) and how existing adopted requirements should be treated in the interim period, prior to the adoption of the reviewed CSS which is likely to be adopted in July 2013 (as reported to the Joint Planning Committee on 12th July 2012).

2.3 Economic Context

The economic context for Corby Borough Council is summarised as follows;

 Corby at £408.60 has the lowest gross weekly earnings in the County (£474.70) and below the English average of £470.30.  The highest rates of people employed are in lower level occupations at 40.4% and process, plant and machine operatives at 12.4%.  Manufacturing dominates the employment base at 26.9%, three times the England average. Percentage employment in other sectors such as Information & Communication, Professional, Scientific & Technical and Financial & Insurance is particularly low.  The percentage of the population claiming out of work benefits is 16.3%, the highest in Northamptonshire and higher than both the East Midlands and England averages. Corby has the highest unemployment rate in the County at 6.1%.  Corby lags behind other Local Authority areas in the creation of new enterprises with the lowest start up rates in the County.  It is estimated that for the period 2001-2031, Corby has a shortfall in supply of unconstrained high quality employment land of circa. 408,400 sq.m..  Conversely, Corby has a further employment land supply of circa. 732,000 sq.m.; however this is constrained and incapable of being brought forward for immediate development.  The largest proportion of housing in Corby (over 75%) are in the bottom two bands (A and B).  Average house prices in Corby as at December 2010 is circa. £102,622 as oppose to the average price for England being £232,628 for the same period.  The SHLAA produced in February 2009 identifies that Corby has the ability to meet both the five and ten year housing targets through existing planning permissions and Sustainable Urban Extensions. To achieve longer term targets additional residential sites are required to be identified.  In terms of the industrial market, Corby is relatively accessible, particularly to the strategic distribution market. This market has deteriorated over the last two years, with operators concentrating on more prime locations. To accommodate any large scale logistic requirements, significant infrastructure is required to be delivered to prepare sites for such use.  Much of the existing manufacturing space in the town is of poor quality with the requirement for new sites to be brought forward to meet occupier demand.  The office sector is relatively small with limited availability of new high quality space. As the offer of retail, leisure and civic facilities has been significantly improved, this may assist in attracting office occupiers to the town in more favourable market conditions; however dependant upon office accommodation of suitable type and quality being made available.

______

Corby Borough Council Local Brownfield Strategy – February 2012 9

The affects of the aforementioned issues across Corby are identified to impact upon the reuse of vacant and derelict land as follows;

 Areas of low demand for both commercial and residential property from occupiers, developers and investors alike.  Market failure and viability issues for redevelopment across all sectors  Major physical constraints, i.e. infrastructure, access, contamination.  Perception of lack of appropriate skills set within existing labour supply to accommodate growth in the knowledge economy.  Perceptions of the area being dominated by manufacturing and potentially distribution, which may deter investment by high value added business sectors.  Limitations with the supply of existing housing stock and requirements to provide a greater mix of house types to attract and retain employers and employees to reside in the area.

A summary of key economic indicators for the Borough is shown in Table 2.3 below;

Table 2.3 – Summary of Key Economic Indicators for Corby Corby Borough UK Council Population (2009) 238,500 60,003,100 Households (2001 Census) 97,122 Working Population (NOMIS Oct 2009-Sep 2010) 104,400 N/A Unemployment Rate (NOMIS Oct 2009-2010) 13.0% 7.7% Average Weekly Household Wage (2010) £423.30 £501.80 Average House Price (September 2010) £124,584 £232,628 Proportion of Population NVQ 3 and above 35.9% 49.3% IMD Rating out of 328 Local Authorities in England 321 N/A Requirement for New Households (to 2026) 13,411 N/A New Office requirement as per JCS (Strategic Centres) 220,000 N/A (sq.m.)

The key factory affecting Corby evident from brief analysis of the local economy are noted as follows;

 High unemployment rates compared to regional and national averages.  Low wage levels.  Low average house prices.  Low levels of attainment at NVQ Level 3 and above.  High levels of deprivation as measured by the Index of Multiple Deprivation.

The North Northamptonshire Employment Target Report prepared by Roger Tym & Partners in November 2011 has also been reviewed which identifies that employment over the period 1998 to 2008 grew at an average of 1% per annum for the sub region as a whole, resulting in an increase of 12,000 jobs. Although this is anticipated to be consistent with the project target of 24,000 jobs over a 20 year period, it is noted that the period 1998 to 2008 was a period of above average in employment growth. The period from 2011 to 2031 is post recession and therefore employment growth projections are likely to be lower than those previously experienced.

Specifically in relation to Corby the net employment growth during the period 1998 to 2008 actually reduced by 1% and furthermore Corby has been especially hard hit by the recession due to the loss of manufacturing employment. The Corby local economy remains more dependent on manufacturing than the rest of the sub region and is therefore much more

______

Corby Borough Council Local Brownfield Strategy – February 2012 10 vulnerable to national decline in manufacturing employment. It is anticipated that Corby has lost around 5,000 manufacturing jobs in the last 10 year period and has generally been the weaker performer in the sub region generating only around 5,000 new jobs across all growing sectors which is barley enough to off set the heavy manufacturing losses suffered.

The Local Brownfield Strategy should seek to address the above issues.

______

Corby Borough Council Local Brownfield Strategy – February 2012 11

3.0 EVIDENCE BASE REVIEW

3.1 Sub Regional Context

Relevant reports relating to the Northamptonshire Sub Region and wider County area are noted as follows;

a. North Northamptonshire Core Spatial Strategy

This strategy was adopted in June 2008 although is now subject to review. The North Northamptonshire area comprises Corby, Kettering, Wellingborough and East Northamptonshire Councils, together with Northamptonshire County Council who have worked collectively through a joint planning committee to create the overall Town Planning Strategy for the area. The Strategy comprises a key part of the LDF for North Northamptonshire and sets out a Spatial Strategy for development and investment within the Sub Region up to 2021.

b. North Northamptonshire Housing Market Assessment 2007

The Strategic Housing Market Assessment undertakes a review of the Sub Region and profiles current dwellings in terms of size, type, condition and tenure and estimates total future number of households along with future housing needs.

c. Joint LDF Annual Monitoring Reports 2009/10

Produced the monitoring and implementation of the North Northamptonshire Core Spatial Strategy against a range of indicators for key policy areas.

d. Strategic Housing Land Availability Assessment 2009

The SHLAA considers the potential supply of housing for a range of assessments in North Northamptonshire over a 20 year period from a base date of April 2008.

e. Strategic Employment Land Assessment 2009

The study was prepared to inform the future strategic economic and employment land policies and priorities in the County of Northamptonshire.

f. North Northamptonshire Strategic Housing Market Assessment 2007 (SHMA)

This report documents the housing needs survey reports for the four Districts within North Northamptonshire and assesses the housing markets by way of tenure assessments through interaction with a wide range of key stakeholders. The SHMA is an input into a number of formal processes involving future planning and housing strategy. We have been informed that the SHMA for the sub region is currently in the process of being updated.

g. Northamptonshire Enterprise Partnership

Enterprising Northamptonshire sets out the plan to deal with the economic and funding challenges within Northamptonshire which sets out the key priorities with the LEP.

______

Corby Borough Council Local Brownfield Strategy – February 2012 12

3.2 Local Policy Review

Various documentation relating specifically to Corby are identified as follows;

a. The Regeneration Framework

Produced in 2003 by Catalyst Corby, the Urban Regeneration Company set up as part of a national initiative and tasked with putting the appropriate structures in place to be able to deliver the Regeneration Framework for the Borough. Although this is a historic document, key objectives within the Regeneration Framework and in particular requirements for population and economic growth remain key objectives for delivery in present times.

b. The Adopted Local Plan 1997

Provides the planning and development framework for development and investment activity within the Borough.

c. Site Specific Allocations DPD for Corby

Contains the planning policies and allocations for various land duties to be used to guide future developments across the Borough in a sustainable manner. It is noted however that the drafting of this document has been suspended as the majority of this document will be incorporated within the revised Core Strategy.

d. The Sustainable Communities Strategy 2008-2013 (More In Corby)

This is the second community plan which seeks to capitalise on Corby being the fifth fastest growing Borough in the UK and to ensure that everyone shares in the benefit by investing in the revitalisation of the town centre and older residential areas along with the provision of top class amenities.

e. Private Sector Housing Renewal Policy 2007

The policy considers works of repair, improvement and/or adaptation required to private sector housing within Corby in order to be able to meet housing need and create a balanced housing market.

f. The Employment Land and Building Studies 2005

Now considered to be somewhat out of date, this study undertook a review of the condition of employment land and buildings available within the Borough.

______

Corby Borough Council Local Brownfield Strategy – February 2012 13

4.0 PROPERTY MARKET REVIEW

4.1 Introduction

A Market Assessment has been undertaken which identifies issues of supply and demand across the Borough and also considers values achievable across the various property sectors and the impact of these factors on development viability.

A copy of the Market Assessment report is attached at Annex I.

The findings of the market assessment are summarised as follows;

4.2 Industrial Market Review i. Land

The Northamptonshire Strategic Employment Land Assessment (SELA) identifies that there are circa. 24 sites equating to around 420 hectares of land. Further analysis has identified that around 347 hectares are constrained including planning, contamination/ground stability issues and infrastructure requirements. Land with no serious constraints equates to circa. 73 hectares. Out of the 347 hectares (17 sites) which are constrained, it is anticipated that a number of these sites (around 137 hectares) could address these constraints within one year enabling development to come forward. Overall none of the employment sites are particularly large and are not considered therefore to represent a significant reserve of good quality employment land, particularly for distribution uses within the Borough. ii. Buildings

In terms of availability of industrial units there are currently 55 units available with a total floorspace of 151,781 sq.m. (1,633,808 sq.ft.). The majority of the stock is second hand and there is an identified lack of new quality accommodation available within Corby.

In terms of take up of industrial buildings, this is on average in the region of 32,515 sq.m. (350,000 sq.ft.) per annum. The majority of transactions between 2008 and July 2011 was generally through a predominance of property up to 464 sq.m. (5,000 sq.ft.). It is noted however that there have been a small increase in disposals for properties in excess of 929 sq.m. (10,000 sq.ft.) and although the number of property transactions has fallen from 2008/2009 an increase in size of some of the property transactions has served to increase the overall volume of floorspace transacted.

Analysis of demand and supply shows that supply exceeds demand with around 4.7 years supply of property. Further analysis identifies however; that much of the available supply is second hand space and may therefore be inadequate to meet the requirements of modern businesses. The existing supply may therefore only be adequate to meet levels of demand in the short term.

In respect of rentals received for industrial accommodation, typically these fall between a range of £32 per sq.m. (£2.97 per sq.ft.) to £48.50 per sq.m. (£4.50 per sq.ft.).

Freehold transactions have achieved values in the region of £566 per sq.m. (£52.57 per sq.ft.). Evidence in respect of investment sales achieved in March 2011 recorded a net initial yield of 8.75%.

______

Corby Borough Council Local Brownfield Strategy – February 2012 14

4.3 Office Market Review i. Land

Corby has a very small office sector and in order to achieve any growth within this market it will require significant inward investment of new office occupiers. In order to accommodate the required growth of the office sector a number of sites have been identified within the emerging Local Development Framework for Northamptonshire to 2031 either as independent sites or part of a wider use mixed development. Around 15 sites have been identified providing land of around 50.37 hectares.

It is noted that in terms of supply of office land, there is the ability to accommodate development in the region of 111,480 sq.m. (1.2 million sq.ft.) which significantly exceeds demand. The supply of land does however have the ability to be able to accommodate significant inward investment should this be secured in the medium and long term. ii. Buildings

With regard to available office accommodation it is noted that there are 11 properties available on the market providing a total floorspace of 2,800 sq.m. (30,138 sq.ft.). In terms of demand and take up, between 2008 and July 2011 annual average take up rates of offices was in the region of 1,225 sq.m. (13,186 sq.ft.).

The overall supply of office accommodation is assessed to equate to a supply of around 2.3 years and therefore sufficient only to satisfy demand in the very short term.

Rental values for secondary offices have achieved values in the region of £158 per sq.m. - £170 per sq.m. (£5.45-£9.95 per sq.ft.) for secondary accommodation. New build offices such as that on Headway Business Park have achieved rentals in the region of £164 per sq.m. (£15.25 per sq.ft.).

4.4 Retail Market Review i. Land/Sites

Key retail sites within Corby relate to the second phase of the town centre redevelopment, which comprises extensive new development including a key anchor store and retail units, residential accommodation, leisure facilities and parking. Planning consent is in place for this development subject to execution of a 106 development. The delivery of the second phase of this scheme is uncertain on the basis that Land Securities are in the process of seeking to dispose of their interest in Corby. We understand that Helical Bar have recently completed the purchase of the scheme from Land Securities.

The only large retail development currently permitted in the town centre is part of the Parkland Gateway scheme, which includes cafes, bars, restaurants and specialist retail. It is noted that this scheme and the second phase of Evolution Corby will increase comparison shopping floorspace by circa. 15,500 sq.m. by 2021. ii. Buildings

In terms of available retail accommodation there are 22 units available within the town, 20 of which are second hand and provide a total volume of floorspace of 9,906 sq.m. (106,627 sq.ft.).

______

Corby Borough Council Local Brownfield Strategy – February 2012 15

The current economic conditions remain challenging for the retail sector with falling household disposable incomes and increased costs of living which has impacted and continues to impact on the retail sector. On this basis there is potentially a retail supply of property of 6.4 years supply; however this does not include the second phase Evolution scheme or the Parkland Gateway scheme.

In terms of values achievable for retail accommodation, rental values of secondary accommodation within the town centre have achieved values in the region of £107 per sq.m. (£10 per sq.ft.) for locations such as Corporation Street. Disposals for new accommodation within Willow Place were achieving values in the region of £196 per sq.m. (£37 per sq.ft.) and for less prominent space £292 per sq.m. (£27.15 per sq.ft.).

4.5 Leisure Market Review

Corby has benefited from a number of leisure schemes within the town including the East Midlands Olympic Pool, Corby Cube and those incorporated within the Willow Place scheme. Further provision has also been provided at out of town sites such as Rockingham Park however it is noted that major leisure provision will not be encouraged outside the town centre.

The leisure sector within Corby has been relatively restricted with very little activity since the delivery of the International Pool and facilities within the Corby Cube. At the time of producing this report, we understand Planning Permission has been granted for the conversion of 4 Stuart House on Elizabeth Street from B1 office to D2 ladies gym. It is further noted that a developer competition for a cinema within the Parkland Gateway site has been carried out and planning permission is to be submitted to the committee to consent to this development, which is recommended for officer approval.

4.6 Residential Market Review i. Land

The overall objectives for the residential sector in Corby are the provision of 15,510 new dwellings within the town with target requirements of the first 5 years of 4,865 new dwellings capable of being met with a number of site with outstanding planning permissions. The SHLAA further notes that there will be need to make provision for a further 5,496 dwellings to cover the 10 year period as planning permissions for this period are insufficient; however the target could be reached by utilising some of the other sites within the Borough.

It has further been identified that the longer term dwelling requirements in Corby cannot be met solely from previously developed land. In addition the Annual Monitoring Report and Background Paper on housing and job requirements for North Northamptonshire established that due to the recent recession that housing targets cannot currently be met. A Statement of Intent was produced in Autumn 2010 documenting the shortfall in housing land created by prevailing market conditions with proposals to extend the timescales for achieving housing targets. This Statement was not progressed because the East Midlands Regional Plan and its targets were not revoked as anticipated. The latest indication is that Regional Plans will be revoked in the Spring which will enable locally based housing targets to be set. ii. Existing Dwellings

With regard to existing dwellings, it has been identified that there are currently 788 properties available for sale of which there are 691 houses and a further 50 flats/apartments.

______

Corby Borough Council Local Brownfield Strategy – February 2012 16

Given the current market and economic conditions, activity within the residential housing market is currently at a very low level, has been for some considerable time and is forecast to continue given the gloomy economic outlook. At this time therefore supply currently exceeds demand and there are a limited number of buyers in a position to complete property transactions primarily due to an inability to secure mortgage finance.

In terms of the existing stock, we further understand that there is a requirement to provide a much wider range, tenure and mix of accommodation along with a requirement to increase overall levels of affordable housing provision.

In terms of house prices, average property values for various types of property within Corby at July 2011 are summarised as follows;

 1 bed property - £ 68,032  2 bed property - £102,104  3 bed property - £124,901  4 bed property - £194,902  5 bed property - £182,100

In respect of values achieved for new build dwellings the information obtained relates primarily to schemes at Oakley Vale and Little Stanion;

 Apartment - £1,905 per sq.m. (£175 per sq.ft.)  2 bed dwellings - £2,900 per sq.m. (£266 per sq.ft.)  3 bed house - £2,225 per sq.m. (£210 per sq.ft.)  4 bed houses - £1,496 per sq.m. (£180 per sq.ft.)

4.7 Property Market Review Summary

The Market Assessment therefore identifies that despite the decimation of the town’s main employment base much has been achieved within Corby during the last 10 years, particularly with the establishment of the new railway station with linkages to London, accessibility through a good transportation network and linkages to the surrounding area.

Corby has also seen much significant reinvestment and facilities within the town including the Willow Place Shopping Centre, the International Pool and Corby Cube. There are also a number of schemes proposed for redevelopment including the remaining phase of the Parkland Gateway scheme. i. Employment Land and Buildings

In terms of the industrial and office market, it is identified that there is a good supply of land within Corby; however much of this is constrained and none of the available sites are particularly large and thus there is not a significant reserve of good quality employment land within the town.

Analysis of existing industrial and office buildings shows that supply exceeds demand; however it is noted that much of the available supply is second hand and inadequate to enable Corby to expand its office sector. ii. Retail Market

In terms of the retail market, although much of the available stock within the town centre is second hand, the second phase of the town centre retail scheme recently acquire by Helical ______

Corby Borough Council Local Brownfield Strategy – February 2012 17

Bar will be more than adequate to accommodate the majority of retail development and demand within the town centre in the short to medium term. It is noted however that the North Northamptonshire Retail Capacity update has forecast that floorspace for comparison goods within the sub region could be in the region of 86,000 sq.m. between 2010 and 2031. Anticipated floorspace requirements in Corby for this period are 25,811 sq.m.. Depending on the delivery of the 2nd phase Willow Place scheme and Parkland Gateway sites, there could be a need to provide additional retail accommodation in Corby to satisfy future demand. iii. Leisure Market

The leisure sector has historically been restricted however has recently expanded considerably within the aforementioned new development in the town centre including the International Pool and Theatre.

In order to improve the overall viability of the town centre it is noted that the second phase Evolution scheme will attract major new leisure operators to Corby along with new retail provision. In addition, the Parkland Gateway scheme securing a new cinema operator will considerably enhance the leisure offer. iv. Residential Market

For the residential market, evidence within the SHLAA has demonstrated there is sufficient land to provide the required target for dwellings within the five year period.

It is noted however the 15 and 20 year targets are unlikely to be met from the current existing planning permission and additional land is therefore required to be allocated. Furthermore given the situation relating to current economic market conditions and recent recession, the target identified within the specific sites allocation are unlikely to be achievable and therefore dates for achieving the target number of dwellings are to be extended beyond 2021.

Fundamentally in terms of housing provision within Corby it is identified that there is a requirement across the borough to provide a wider range, tenure and mix of accommodation however affordability remains an issue.

______

Corby Borough Council Local Brownfield Strategy – February 2012 18

5.0 REVIEW OF IDENTIFIED SITES

5.1 Introduction

An inspection was undertaken of each of the 21 sites identified and the Appendix D proforma completed to record all of the required information. It is important to note that the 21 sites represent a sample of brownfield sites and do not reflect the totality of capacity available within Corby Borough.

It is noted that in respect of the two sites at Stanion Plantation (NLUD Ref: 001 and 002) that these have been combined within a single proforma on the basis these sites will be brought forward collectively and within a wider redevelopment project.

Due to the nature of the commission and unknown ownership of some of the sites, it was not possible to access all areas and where appropriate the site inspections were undertaken from the boundary of sites. The inspections also included a review of the surrounding uses and viable potential constraints on future development as well as information included within the National Land Use Database (NLUD), to assist in the informing of judgements on the future use of individual sites.

The information obtained from the site inspections including photographs and site descriptions are attached within proformas at Annex II.

A site evaluation proforma for each of the sites is attached at Annex III. This provides a numerical score for sites against criteria such as physical constraints, planning criteria, land ownership and other factors in order to identify a preferred use.

5.2 Characteristics of Brownfield Sites

5.2.1 Location

The 21 selected sites are distributed throughout the Corby Borough. There is a concentration of sites with ten to the north east of the town centre on the existing industrial estates, a further three sites relatively close to the town centre, two just outside the town centre, three in the south east, two in the south west and one on the north western perimeter close to the Local Authority boundary.

For the purpose of this commission a number of the site have also been allocated within clusters and these are confirmed as follows;

Cluster Cluster Name No. Site NLUD Reference / Address No Sites 1A Rockingham Motor 4 280500040 – Shelton Road Sports Zone – East 280500041 – Sondes Road 280500043 – Birchington Road 280500046 – Sondes Road 1B Rockingham Motor 2 280500014 – Steel Road Sports Zone – South 280500061 – North of Steel Road 1C Rockingham Motor 4 280500011 – Genner Road Sports Zone – West 280500027 – Phoenix Parkway 280500048 – South of Sludge Beds 280500093 – Genner Road 2 Corby Central Business 2 280500022 – Station Sidings ______

Corby Borough Council Local Brownfield Strategy – February 2012 19

Cluster Cluster Name No. Site NLUD Reference / Address No Sites Park 280500088 – Corby Community College 3 Eurohub 3 280500001 – Stanion Plantation 280500002 – Stanion Plantation 280500090 – Land off Geddington Road

We understand that the clusters were identified due to the proximity of several sites and the emergence of masterplans meaning that it made sense to consider these sites as clusters.

Plans identifying the various clusters are contained within Annex IV.

Consideration has been given in respect of each of the clusters and the appropriateness of individual site inclusion within these in terms of use and potential delivery and is discussed within later sections of this report.

From the information provided we calculate the gross total site area for all of the 21 sites is 235 hectares (581 acres).

5.2.2 Analysis of Sites by Size

The identification of sites in accordance with size are shown in table 5.2.2 below.

Table 5.2.2 Net Area of Site No. of Sites < 1 hectare 5 > 1 hectare < 5 hectares 9 > 5 hectares < 10 hectares 1 > 10 hectares < 15 hectares 2 > 15 hectares < 20 hectares 0 > 20 hectares < 30 hectares 1 > 30 hectares 3 Total 21

The above table demonstrates that just over three quarters of the sites are less than 5 hectares with only four of the 21 sites being in excess of 20 hectares. This demonstrates that few of the above sites would be capable to accommodate major new uses which has been identified as a major requirement to enable growth of the Borough.

With regard to the larger sites, it is noted that one comprises land at Birchington Road which forms part of the Rockingham Motor Sports Zone Cluster and three sites are situated adjacently at Geddington Road forming the wider Eurohub Cluster.

5.2.3 Analysis of Sites by Occupation

It is noted that out of the 21 sites, 18 are vacant and three are currently in occupation or part occupation.

The sites which are occupied are noted as follows;

 Site 07 - Former TA Centre – Partly occupied by the Volunteer Bureau; however the remainder of the site is vacant.

 Site 11 - Genner Road – Utilised for vehicle storage purposes. ______

Corby Borough Council Local Brownfield Strategy – February 2012 20

 Site 14 – Steel Road – Comprises car parking, service area and storage for Renault as part of their existing site.

It is also noted that although site 61, North of Steel Road, is vacant, this appears to form part of an existing industrial demise and we understand has been retained as expansion land for the existing owner/occupier.

5.2.4 Analysis of Sites by Previous Use

Where it is possible to identify previous uses of sites these have been identified within table 5.2.4 below;

Table 5.2.4 – Previous Use Previous Use Number of Sites Total Area (ha) Gross Former Sewerage Works 1 13.67 Former Factory/Industrial 8 101.44 Site Mining/Tip/Quarry 3 100.59 Existing 4 5.35 Industrial/Commercial Former Residential 1 1.38 Former Educational Use 3 11.29 Former Rail Land 1 1.64 Total 21 235.36

5.3 Proposed Future Uses for Identified Brownfield Sites

5.3.1 Introduction

Following an inspection of each of the sites and with reference to both existing and emerging planning policies as well as to the market assessment report the proposed use and capacity of each of the 21 identified sites is summarised in table 5.3.1 below;

Table 5.3.1 – Proposed Use and Capacity of Sites Delivery No of Gross Net B1,2,8 built B1a built Retail / Community Housing Affordable Period Sites Dev'mt Dev'mt space space Leisure Use No's Content Area (ha) Area (ha) Space

Existing 0.79 ha 0.79 ha 0 m2 0 m2 0 m2 use 1 0 0 0 retained 2011-15 10 39.46 ha 36.17 ha 77,258 m2 24,906 m2 5,960 m2 0 927 278 2016-20 9 181.44 ha 133.37 ha 322,875 m2 0 m2 55,209 m2 0 28 0 2021-25 1 13.67 ha 10.94 ha 37,641 m2 0 m2 0 m2 0 0 0 Total 21 235.4 181.3 437,774 24,906 61,169 0 955 278

The assessment includes an estimated forecast of the time periods when sites may come forward, which is based upon issues such as market attractiveness, timescales to secure vacant possession and the level of anticipated constraints. The above table does not however address viability, which is addressed within Section 6 of this report.

______

Corby Borough Council Local Brownfield Strategy – February 2012 21

Unless individual sites are required to be adjusted to reflect site specific factors, the assessment is undertaken on the basis of the following standard assumptions with regard to site capacity based upon the net developable areas;

Table 5.3.1 (2) – Standard Assumptions Regarding Site Capacity Use Development Density B1, B2 and B8 Development 3,442 sq.m. per hectare B1a Office Development 4,589 sq.m. per hectare Residential - Housing 30 - 35 per hectare - Flats 50 per hectare Affordable Housing 30% of market housing

A schedule identifying all of the sites and identifying the anticipated delivery period is contained within Annex IV to this report.

It is noted that for one out of the 21 sites it is considered that the existing use should be retained through the Strategy period as this forms part of operational land and buildings by Renault. As this land services an existing industrial unit, the land cannot be redeveloped.

A brief analysis of the above identifies the following factors;

 The provision of new B1, B2 and B8 space has the opportunity to enhance the quality of overall supply of accommodation within the Borough, which has been assessed through market analysis as to currently only be available in the short term.

 The market assessment identified there is circa. 2.6 years supply of offices and the NLUD sites therefore provide the opportunity to significantly increase overall volume of supply. It is noted however there would be issues with potential flooding of the market if all of this space was delivered in relatively short timescales and phasing of supply therefore requires to be considered.

 With regard to retail, there is a good supply of retail accommodation and this supply is likely to be enhanced through additional development in the town centre. Any delivery of retail space would need to be carefully considered. In terms of leisure space, it is noted that there has been very limited activity within Corby and the ability to provide new facilities is fundamental in order to provide a balanced offer to support major new commercial and residential development.

 None of the NLUD sites will provide any form of community use and consideration as to the need for any new such uses or whether these are being provided elsewhere will need to be deliberated by the Council.

 The existing forecast for delivery of new dwellings is identified as being capable of being met from existing land supply. It is noted however that timescales for meeting these targets have been extended due to the current market and economic conditions. It is demonstrated therefore that the NLUD sites do have the ability to secure the early delivery of new housing; however support/intervention from the public sector may be required in this regard.

The ability for the early delivery of some of these sites is discussed further within Section 7.0 of this report.

______

Corby Borough Council Local Brownfield Strategy – February 2012 22

6.0 FINANCIAL ANALYSIS OF THE PROPOSED REDEVELOPMENT OF BROWNFIELD SITES

6.1 Introduction

Given current economic and market conditions, it is only likely that regeneration of brownfield sites will take place in circumstances where the value of the alternative use or redevelopment for the existing use is more valuable than the current land use, or where there is public sector intervention through site assembly, deferred land payments or the provision of grant assistance, for instance.

Corby has in the last decade benefited from major new development across all sectors delivered in part by the private sector without public sector funding. Clearly however during and following the recession, new development has stalled, as has demand across all sectors.

On this basis, it is considered appropriate to consider whether the uses proposed on the subject sites are viable without gap funding within current market conditions and assuming there is adequate levels of demand in the market place to justify delivery.

6.2 Basis of Viability Assessment

In order to consider the viability of redevelopment of the various brownfield sites, a high level development appraisal has been undertaken for each individual site based upon the following standard assumptions;

 Sales values are based upon the outcome of the site assessment and the values assessed for the proposed uses within the relevant market assessment.

 A standard construction cost is applied to the gross built areas as follows;

- Industrial/Warehouse £ 538 per sq.m. - Offices £1,076 per sq.m. - Residential o Apartments £ 969 per sq.m. o Houses £ 807 per sq.m.

 An uplift on construction costs is provided to reflect costs of infrastructure, remediation and S106 costs. This figure generally varies between 25% and 40% dependant on our preliminary assessment of site conditions, however a few sites have uplifts of 60-90% where specific site development issues are identified.

 A further allowance of 40% of construction costs is made to reflect the costs of professional fees, finance and developers profit.

 Where provided by the private sector, affordable housing is assumed at 30% of new housing with the value included at 50% of market value as the majority is anticipated to be required as social rented properties. There is no assumption that viability would be supported by affordable housing grant.

Based upon the above assumptions, it is noted that on the basis of current market conditions that the redevelopment of only 5 out of the 21 brownfield sites could generate positive development land values for the proposed used. Three sites assume residential development, with one mixed use and one office scheme. ______

Corby Borough Council Local Brownfield Strategy – February 2012 23

A preliminary viability assessment for each of the identified sites is attached at Annex V.

6.3 Analysis of Viability Assessment and Sensitivity Analysis

It is recognised that the UK economy is at the lower end of the economic cycle and property values have reduced by typically around 20% on a national basis since the peak of the property market in mid 2007 and significantly greater in some areas.

The Strategy assesses the redevelopment of brownfield sites through to 2026 and confirms that it is appropriate to consider that if there is some increase in the real values as the wider economy improves in due course through the economic cycle, the impact of increases in value on the number of sites which would have a positive land value will increase against a range of increases in values in real terms (with costs remaining fixed).

Table 6.3 below sets out the impact on the number of sites which have a positive redevelopment value against a range of increases in values;

Table 6.3 – Impact of Increases in Value on Viability Values As Number Total Ha B1, B2 Offices Residential Affordable Retail and Community per of Viable (Gross) and B8 Sq.m. Units Residential Leisure Assess- Sites Sq.m. Units Sq.m. ment 0% 5 12.30 0 24,906 823 244 5,301 0 +5% 7 14.69 0 24,906 955 278 12,569 0 +10% 9 24.25 1,914 24,906 955 278 61,169 0 +15% 10 27.05 12,928 24,906 955 278 61,169 0 +20% 12 41.23 61,735 24,906 955 278 61,169 0

It can be seen that increases in project values of up to 20% have a relatively small impact on the number of brownfield sites which become viable due to the size of viability gap. It is noted that even with increases in value at 20%, nine sites remain non-viable indicating that public intervention such as funding assistance is likely to be required to facilitate development. In relation to the delivery of commercial schemes, many of these has a gap in excess of 20% in current market conditions.

6.4 Summary

The appraisal has shown that at current levels of sales values around half of residential schemes produce a positive land value for redevelopment purposes. Consideration should be given to the fact that this level of value may not be sufficient to justify the costs of securing all necessary consents, or provide a sufficient land value to justify historic costs, which may have been paid for sites in better market conditions.

It is noted that the viability assessment has been undertaken on the basis of the full affordable housing requirement within planning guidance being met. Many developers are currently arguing that such requirements cannot be justified in current market conditions. Any reduction in the requirement for affordable housing will improve site viability however will require to be balanced with the requirement for affordable housing provision.

It is noted that even with an increase in values of 20% then the substantial majority of office and industrial sites remain unviable for brownfield redevelopment purposes.

______

Corby Borough Council Local Brownfield Strategy – February 2012 24

7.0 POTENTIAL MEASURES TO SUPPORT SITE DELIVERY

7.1 Introduction

The past 18 months has seen a significant change in the Government’s approach to property regeneration and in line with other areas has sought to change the form and nature as well as the scale of the Government intervention into property regeneration activity.

The network of Regional Development Agencies including East Midlands Development Agency is being disbanded along with the various funding programmes operated which included “single pot” funding, Grant for Business Investment, equity and joint venture projects including a range of direct interventions including site acquisitions.

The role of the Homes & Communities Agency is within the process of changing from that of a delivery vehicle to that of an enabling Agency, which is linked to a 40% cut in the resources available to the Agency and a new focus on investment based programmes for housing delivery including affordable housing which is now replacing the previous grant based programmes. Invitations are currently being invited from housing associations and other affordable housing providers for schemes to be included within the National Affordable Housing Programme for 2012-15.

To replace the network of Regional Development Agencies as representative local bodies to promote economic regeneration with the regions, the Government has promoted the establishment of a series of Local Enterprise Partnerships as private sector led bodies to provide a local response to economic regeneration matters.

There have been 38 LEPs approved by the Department of Business Innovation and Skills (BIS) to date which include a wide variety of areas from single Local Authorities to a sub- regional focus against an agreed work plan.

The South East Midlands LEP (SEM LEP) was approved in May 2011 under the Chairmanship of Dr. Ann Limb with a total of 15 Board Members including Chief Executive Officers and Managing Directors from companies including Silverstone Holdings Limited and Bedfordshire Chamber of Commerce. The LEP is currently preparing a business plan for LEP areas and has identified the following key priorities;

 Delivering growth effectively and speedily.  Removing barriers to growth.  Attracting new growth to the area.  Growing objectives.

The business plan has been issued in draft for the period April 2012 to March 2013 on which comments are invited. Following adoption of the business plan the various members of the LEP will concentrate on the development and delivery of local economic development plans in seeking to achieve targets and outputs set for the LEP area.

The various funding programmes being promoted by the Regional Development Agencies have been consolidated into the Regional Growth Fund programme, which has a total budget of £1.4 billion over a three year programme with various rounds of bidding invited. The first round of bidding comprised an initial pot of £150 million, subject to review, targeted at early win projects promoted by the private sector. It is noted that 464 bids totalling £2.78 billion were invited against the first round of bidding.

______

Corby Borough Council Local Brownfield Strategy – February 2012 25

A second round of RGF was launched in March 2011 with 492 bids received totalling £3.3 billion. There were 119 bids approved which are now in the due diligence stage.

We are aware that there are various funding and investment routes available to support the delivery of brownfield sites, which are targeted to either address issues of project viability, securing of finance or risk sharing, some of which is likely to be considered necessary to bring forward brownfield sites in Northamptonshire.

Within the 2011 Budget on 23rd March 2011, Chancellor of the Exchequer, George Osborne announced the creation of 21 new Enterprise Zones (EZs) across England including an initial 10 EZs with one at Northamptonshire Waterside.

The EZ model was used in the 1980s to attract investors into regeneration areas through offering a range of incentives to investors including rate free periods, 100% capital allowances and a simplified planning regime.

It was announced in the 29th November 2011 by George Osborne in the Autumn Statement that there is likely to be a two tier set up in the new Enterprise Zones with prospects for increasing funding and incentives to aid regional economies. It was also announced that the normal 18% capital allowance available for investment in the Enterprise Zones would be raised to 100% in six of the most difficult being The Black Country, Humber, Liverpool, North Eastern, Sheffield and Tees Valley. Full details of the Zones are not yet fully documented; however are likely to be confirmed shortly.

In terms of other funding mechanisms, these are detailed within the following sections of this report.

7.2 Review of Funding Programmes and Mechanisms

The various programmes and mechanisms are set out below;

7.2.1 Community Infrastructure Levy

A Community Infrastructure Levy is an existing funding mechanism set up in England under the Planning Act 2008 whereby the public sector would fund the undertaking of local or sub regional infrastructure and would recover the costs for infrastructure provision once sites are developed out by the private sector.

This mechanism could be applied to a cost per dwelling or cost per sq.m. of commercial development although is more commonly applied on a property by property basis with recent examples comprising of the roof tax applied within Milton Keynes to fund key infrastructure works and the funding of public realm by the HCA within the Greengate area of Salford.

CIL arrangements often sit side by side with Section 106 Agreements operated by Local Authorities but do require the relevant Local Authority to secure access to the relevant capital funding, which is required to fund works on an upfront basis. The normal route would be for a schedule of infrastructure proposals to be incorporated within the Local Development Framework and supported by way of a Charging Schedule which would be consulted upon and form part of the LDF.

CIL is not chargeable in relation to affordable housing and properties used for charitable purposes.

______

Corby Borough Council Local Brownfield Strategy – February 2012 26

The Local Authority would require to demonstrate that the proposed works were not funded from other actual and expected sources of funding and the proposed levy does not have negative potential effects on the economic viability of development across its area as a whole. The scheme has been broadly welcomed by Local Authorities as a mechanism for funding infrastructure works across both local and sub regional areas. In addition we also understand that some Local Authorities are considering CIL as a mechanism to fund the remediation of sites and on site infrastructure provision in order to overcome viability issues and enabling schemes to proceed.

With regard to North Northamptonshire, from discussions we have held with the North Northamptonshire Joint Planning Unit, that work on CIL arrangements were commenced in January 2012. A preliminary draft Charging Schedule for each Local Authority is currently being prepared and is due to go out to consultation early in the Summer of 2012 with the draft Charging Schedule prepared in the Autumn of 2012. It is therefore currently proposed that the CIL Charging Schedule will be submitted by the end of 2012/early 2013 for examination prior to adoption.

7.2.2 Prudential Borrowing by Individual Local Authorities

Individual Local Authorities may make provision within their revenue budgets for an annual sum which would be capitalised to create a capital sum and may be utilised to promote property regeneration projects within the Local Authority area. This fund could then be utilised to undertake investment activity, which could include equity investment within projects, loan finance to developers who are unable to secure investment from traditional banking sources or gap funding providing that the funding is within permitted intervention levels within the approved EU block exemption for gap funding.

Whilst increasing revenue pressure on revenue budgets is noted as a result in reductions within Central Government funding, various Local Authorities have been looking closely at this mechanism to promote continuing economic development within a difficult funding market and build on work undertaken in previous funding regimes.

For example Derby City Council established in September 2010 a £10 million Regeneration Fund (www.derbyregenerationfund.co.uk) to support the delivery of high quality speculative office development within the City centre area and recently announced four successful schemes to be delivered over the next 18 months to 2 years to deliver 13,935 sq.m. of offices. The entire Council investment is projected to be repayable together with interest/share in developer profits over a 3-5 year timescale following letting and disposal of the completed scheme.

Manchester City Council have also announced proposals to establish a similar fund with a 10 year horizon and estimates that as an “evergreen investment vehicle”, all of the receipts may be recycled through the Fund three times within the 10 year period.

In addition, Salford City Council (SCC) announced that they have agreed to take a pre-let of 50% of a 17,651 sq.m. office at Greengate to enable the developer (ASK Developments) to secure funding for the scheme to move forward on a speculative basis. These arrangements have enabled the scheme to be established, which would otherwise require a major pre-let to be secured in advance of the commencement of construction and potentially delaying delivery of the project. The investment by SCC seeks to establish Greengate as an extension of the Manchester City Centre office core following the completion of the Spinningfields scheme.

______

Corby Borough Council Local Brownfield Strategy – February 2012 27

On this basis, prudential borrowing is a useful mechanism to establish confidence in local markets and the ability to recycle receipts within such a facility will be dependant upon viability issues associated with project development.

7.2.3 JESSICA Funding

The East Midlands Urban Development Fund was launched in 2009 providing support across the East Midlands region for the development of commercial property focussed around innovation, science, technology and growth. The objective of the fund is to provide funding to commercial development projects which will create lasting jobs across the Region and kick start opportunities which may have stagnated due to the lack of bank finance resulting from the credit crunch and resulting recession.

The fund has £15 million secured including £5 million from the East Midlands Development Agency and £10 million from the European Regional Development Fund (ERDF).

The fund has been established through a European funding mechanism called JESSICA (Joint European Support for Sustainable Investment in City Areas) and will primarily focus on ERDF Priority Axis 1, which is about creating a physical environment for businesses to innovate and grow.

There has recently been a new call for activity under the fund which closed on the 2nd December 2011.

It is noted that this is the second call for activity under the fund since its inception and it is understood that interest in the fund has been limited due to its restrictive requirements for investment in science parks, innovation premises or high tech employment floorspace. In addition, the fund will offer investment by way of mechanisms such as equity, loans and/or rental guarantees as opposed to providing any grant funding, which may not therefore address viability issues.

The progress with the uptake of the fund following latest call for activity will be made known in due course.

7.2.4 Local Asset Based Vehicle for Investment (LABVI)

In these circumstances, Local Authorities or other public bodies utilise existing land and property assets to establish a vehicle with a joint venture partner (usually a private sector developer) who shall be able to use such assets as security for new borrowing to fund the undertaking of development activity on the sites. Such works would be delivered by the private sector partner in accordance with a phased programme of development agreed beforehand between the parties.

The typical business model for a LABVI would require for the public sector to receive a “coupon” rate of interest on the property assets invested into the vehicle and as such this would typically require to incorporate a number of income producing assets as well as development sites, which often comprise an important element of Local Authority revenue budget.

A recent example of a LABVI arrangement with which Thomas Lister have been involved is PxP West Midlands Limited, which was established between Advantage West Midlands (AWM) and Langtree Group and covers a portfolio covering approximately 52.61 hectares of development land and 55,741 sq.m. of existing workspace. The joint venture was established in June 2007 with major ongoing projects including the former LDV site in

______

Corby Borough Council Local Brownfield Strategy – February 2012 28

Birmingham, the progression of a site for residential development at Brindley Village Phase II and Bromsgrove Technology Park where PxP are currently developing approximately 4,645 sq.m. of new workshop units. Other projects with PxP include proposals for 17,651 sq.m. in three industrial units at Cobalt Park in Willenhall and the development of new industrial units at Hilton Park close to Junction 1 of the M54 Motorway.

It is understood that PxP West Midlands has not delivered the proposed levels of new speculative development agreed within the Business Plan and that AWM have not received the projected returns anticipated when the vehicle was formed. Whilst this may be attributed to changes in market conditions, the approach for a public sector body to rely on a single private sector partner to take forward a wide range of projects on a region wide basis has not delivered significant regeneration benefits at this stage and is regarded by many as tying up valuable public sector assets within a long term vehicle.

7.2.5 Tax Incremental Finance (TIF)

The Coalition Government announced proposals in late 2010 for the introduction of a Tax Incremental Finance scheme, which is a structure frequently used in other countries (including the US) enabling Local Authorities to borrow capital to provide capital funding to appropriate projects based upon future increases in non-domestic rates income resulting from the subject development.

The first TIF projects coming forward are within Scotland where the necessary enabling legislation has already been approved and the first development undertaken at Leith Dockyards with a number of other proposed future schemes at the detailed assessment stage including the redevelopment of the former Ravenscraig Steel Works by Wilson Bowden Developments Limited.

It was originally understood that Local Authorities in England would be invited to submit pilot projects to Central Government in January 2011 for the scheme. However, there have been a number of delays in the preparation of draft enabling legislation due to the potential issues raised in consultations from Local Authorities. There have been criticisms of the scheme where Local Authorities which do not have a significant base of commercial development would be unable to benefit from such arrangements. Furthermore there may be the potential impacts that such a scheme could only benefit areas with existing high demand for commercial property and therefore not benefit areas of need of regeneration where there may be issues of low demand.

Further announcements regarding the framework for TIF and the call for pilot projects in anticipated in due course; however it is clear that these will be required to be restricted on the areas where TIFs may operate and the number of schemes to avoid distorting the market.

7.2.6 Regional Growth Funding

As previously noted, a total of 464 bids were received for the first and 492 in the second round of the Regional Growth Fund with the focus on projects which directly contribute to creating employment opportunities. A total of seven bids were approved for the East Midlands region anticipated to create around 1,241 direct jobs and 7,716 indirect jobs. It is noted that six bids were approved in the second round of bidding within the East Midlands although it is understood that none of the bids approved are located in Northamptonshire.

______

Corby Borough Council Local Brownfield Strategy – February 2012 29

Under the first round of RGF it is noted that three bids were approved in the East Midlands and again it is understood that none of these projects are located within the Northamptonshire region.

In terms of a third round of RGF, we understand Central Government are currently considering whether there should be a third round with a potential announcement to be made in due course.

In the meantime, we understand further funding has been made available for a new “Growing Places” fund and allocated across a number of the LEPs. We further understand this funding comprises under spend from the RGF Round One arising from a number of abortive projects.

On the basis that the Growing Places fund is for projects which are immediately deliverable, funding is anticipated to be available from March 2012.

Expressions of Interest for the SEM LEP Growing Places Fund have been submitted from Corby Borough Council and North Northants Development Company, including Electric Corby, completion of Corby Northern Orbital Road and increasing capacity at Corby Culvert. A decision on these bids is awaited.

7.2.7 New Homes Bonus

A scheme announced by Government in the early stages of the new Parliament, where Council Tax is matched from Central Government funds for every new home built (or brought back into use) in a Local Authority’s area for six years from the date of construction. Examples of Authority areas where this scheme is operating (if any) is not yet known.

7.3 Other Interventions to Support Site Delivery

Local Authorities may also support the development of brownfield sites through other non- financial mechanisms and would briefly highlight the following;

a. Site Assembly and Consolidation - Through the acquisition of brownfield sites together with adjoining areas and offering these as more comprehensive development opportunities. Such an approach requires up front investment by the public sector on the basis of future returns.

b. Use of Compulsory Purchase Powers – To support private sector developers in undertaking site assembly work for key projects which may include the securing of vacant possession to secure comprehensive redevelopment.

c. Preparation of Development Briefs – The early preparation of development briefs will add certainty to the development process by providing a clear indication of permitted use, forms of development and any terms and conditions which are likely to be required in relation to the development scheme. This approach will enable developers to bring forward opportunities without the requirement for lengthy pre-application discussions to establish the nature form of uses which will be permitted. Over previous years there has been a tendency to provide detailed and prescriptive development briefs; however it is felt that such an approach may be overly prescriptive and should focus upon permitted uses, form of development and key design issues.

______

Corby Borough Council Local Brownfield Strategy – February 2012 30

d. Pooling of Public Owned Sites – The brownfield strategy includes a significant number of public sector owned sites and there may be benefits in offering developers a portfolio of opportunities whereas individual sites may not be of a sufficient scale to attract investment. Such an approach would also provide the opportunity for the most valuable sites to cross subsidise less viable development opportunities through linking them within development obligations. For example good quality residential sites could be developed out against an obligation to develop certain element of commercial developments on either the same or separate site within the same ownership.

e. Midlands Local Land Initiative – This is similar to d. above and is an initiative introduced by the HCA whereby the HCA and other public sector authorities release surplus sites to the market. The aim is to take a long term, structured approach to the phasing of public land releases in order to increase housing supply and to secure viable new developments.

The initiative also includes land releases being made available on a deferred payment buy now, pay later basis to assist developers cashflow on development schemes and aim to kick start more housing developments.

f. Joint Ventures – As opposed to disposing of sites for development, public sector bodies can enter into joint ventures with private sector developers such that land could be vested into development schemes with the returns received upon completion of the scheme and ultimate disposal. Such an approach enables the public sector to have an element of control over the development process and improves cashflow for the private sector development partner to improve project profitability. This would normally relate to either the private sector undertaking development on public sector land or the public sector joining with an adjoining development scheme to provide a more comprehensive development however such an approach would need to ensure that it complied with relevant guidance in relation to procurement and obtaining value for money.

g. The public sector entering into a lease for a new commercial property/scheme - enabling a developer to secure finance based upon the strength of the public sector covenant. The public sector would then sublet the property on terms appropriate to secure occupiers within the market. Termination provisions for the head lease would be agreed for example upon 80% occupancy levels.

We would note that the above mechanisms are not mutually exclusive and in some cases a combination of measures such as site assembly and subsequent Joint Venture arrangements have been utilised to facilitate new development.

______

Corby Borough Council Local Brownfield Strategy – February 2012 31

8.0 APPROACH TO DELIVERY OF THE DEVELOPMENT ON BROWNFIELD SITES

8.1 Introduction

The decline of manufacturing and heavy industries within Corby left a legacy of brownfield sites across the area and although a number of these have been subject to reclamation and redevelopment, many of those remaining are constrained by poor site conditions through contamination or historic excavations which have served to increase site development costs.

Additionally some sites have relatively poor accessibility which require considerable infrastructure improvements.

The Draft Core Spatial Strategy for North Northamptonshire highlights the need for delivery of local and strategic infrastructure in order to bring forward major new development. The Strategy identifies that most infrastructure costs can be aggregated into a standard charge or series of standard charges in the case of residential dwellings on a per dwelling basis and this is set out in the Developer Contributions SPD. The SPD will also identify standard charges to support the funding of strategic infrastructure taking into consideration variations in locality, development type, land use, current land value and accounted costs.

The Core Spatial Strategy also seeks a step change in the rate of house buildings in North Northamptonshire in order to contribute to meeting housing shortages in the greater South East of the country. Increased rates of house building are therefore focussed on for the four districts including Corby and it is important therefore that allocated housing land within the Borough can be brought forward for development.

The current position within the Borough is that large areas of land have remained vacant with limited prospects for a number of sites being brought forward within current market conditions, due to the high upfront costs of site preparation which resulted in schemes being too higher risk to developers to be able to undertake such schemes.

For any Local Brownfield Strategy within Corby to be successful then it must seek to address a number of key issues as follows;

i. Address issues of poor site conditions as a result of historic site uses and the impact of these on deliverability and viability of site development opportunities.

ii. Relatively low values achieved for both new and existing housing stock and for commercial property.

iii. Demand from occupiers of commercial property for short term flexible lease arrangements which impact on risk, viability and the ability to secure private finance.

iv. Low demand for housing development opportunities relative to other areas and in particular greenfield sites in out of town locations.

v. Shortage of development finance which impacts on the ability of house builders and commercial developers to undertake development. This is a particular issue where there are high up front costs in relation to site remediation or infrastructure works which require to be undertaken prior to receipt of income from development sales with resultant cashflow issues.

______

Corby Borough Council Local Brownfield Strategy – February 2012 32

vi. Poor environment in some areas as a result of redundant sites, with depressing effect on values.

vii. Requirement to meet the costs of affordable housing provision which impacts on viability together with other Section 106/278 requirements.

viii. To support the establishment of commercial development capable of attracting inward investors and retaining key employers through the provision of high quality offices and industrial premises required to support the diversification of the economy which impacts on development value.

The core of any Local Brownfield Strategy must be a comprehensive approach which impacts upon market confidence both from developers, investors and housebuilders and also from occupiers perspective to create confidence in market conditions. Significant improvements realised over a period of time may be catalytic such that new prospective purchasers/investors are encouraged into areas which would not have been previously considered.

On this basis it is considered that the following approach should be undertaken in relation to various market sectors.

8.2 Local Brownfield Strategy for Residential Development

It is recommended that the following mechanisms be pursued to support the delivery of brownfield sites for new residential uses;

8.2.1 Site assembly

There are two sites which form part of an original single interest formerly part of a school which although located within the same formal boundary are actually in separate ownership. Although the sites did form part of a single interest, it is acknowledged that the sites are separated by the new Kingswood School which is sandwiched between the subject sites.

However, it is considered that the two landowners working in conjunction could create a more attractive or viable brownfield residential development site. The sites in question are noted as follows;

 Kingswood and Pope John Schools, Gainsborough Road (Site Ref: 89)

The two parcels of land are noted to be in the ownership of Northamptonshire County Council and the Catholic Diocese of Northamptonshire and the sites form part of the former Kingswood School complex which has been replaced with new school buildings situated immediately adjacent. The two sites are generally rectangular in shape and level, situated to the north and south of the new school. The estimated net developable area of the combined sites is estimated to be circa. 2.8 hectares.

The sites are considered suitable for residential development; however would clearly benefit from a comprehensive approach to enable an efficient and well designed scheme to be brought forward to the market and to avoid sites competing with each other in terms of redevelopment. Although the sites are physically separated there could be efficiencies potentially achieved in design, provision of services and/or economies of scale in construction costs and professional fees.

______

Corby Borough Council Local Brownfield Strategy – February 2012 33

It may transpire however that the two landowners are in communication and intending to work jointly in respect of bringing these sites forward; however at this time we do not have any information in this regard.

8.2.2 Use of Council Owned/Public Sector Sites in Bringing Forward Development Opportunities

There are a number of sites where the Local Authority or other public sector bodies including Northamptonshire County Council and the HCA may clearly benefit with the public sector owners working collectively in a coordinated manner in terms of bringing sites forward to the market.

The following sites are potentially identified for inclusion in the Midlands Local Land Initiative;

 Corby Community College (Site Ref: 88)

The site is in the ownership of the Community College and is situated approximately half a mile north east of the town centre on Cottingham Road.

It is noted that the site is identified as part of a mixed use scheme with adjoining land; however it is recommended that as this site is primarily surrounded by residential uses it is considered that it naturally lends itself to residential development. On this basis this site could be brought forward as a first phase of development to potentially kick start the wider scheme and could accommodate around 278 new dwellings including 83 affordable units.

It is not clear at this stage what the strategy of the college is going to be in respect of disposal; however redevelopment of this land could be encouraged if the college were prepared to include the site as part of the Midlands Local Land Initiative, whereby it is promoted to the market and/or the HCA Developer Partner Panel and payment for the land is on a deferred basis, thereby potentially assisting overall cashflow and viability of the site.

It is also noted that this site could be included as part of three sites potentially offered to the market either simultaneously or on a phased basis.

 Kingswood and Pope John Schools (Site Ref: 89)

As previously noted these sites are situated within the same location albeit are in separate ownership of the County Council and Catholic Diocese of Northamptonshire.

Bringing these sites to the market collectively could accommodate new development for circa. 478 dwellings including 143 affordable homes.

A coordinated approach between the public sector partners has also been recommended to offer benefits in terms of site delivery and furthermore cashflow and viability could also be assisted if these sites were included as part of the Midlands Local Land Initiative whereby payment for the land is on a deferred basis.

 Daneshome Regeneration Area (Site Ref: 97)

This site is in the ownership of Corby Borough Council extending to a net developable area of circa. 1.1 hectare with the ability to accommodate circa. 58 new dwellings including 17 affordable homes. ______

Corby Borough Council Local Brownfield Strategy – February 2012 34

The site is located within an established public sector housing estate and again there is the ability for this site to be vested as part of the Midlands Local Land Initiative whereby a developer partner is sought and the site disposed of on deferred payment arrangements for the site.

It is noted that in order to bring this site forward any issues relating to flood risk are required to be resolved. The Council, in partnership with the Environment Agency have commissioned consultants to undertake hydraulic modelling to better understand and deliberate fluvial flood zones in this location.

Furthermore we also consider there is the opportunity for extending the scheme to incorporate some of the wider existing estates to seek to secure environmental enhancements and improvements, which could be funded in part through the Council agreeing to forego any capital receipt for the land.

Under the Midlands Local Land Initiative there could be a phased approach to the release of the sites depending on the ability and timescales for which these could be brought forward for development along with consideration for payment of the sites to be on a deferred basis which may help kick start development through assisting cashflow of schemes in that developers of the site would not be required to meet the costs of site acquisition on an upfront basis but could make payments for this when receipts are being generated by the development of the site.

8.2.3 Use of Mixed Use Development in Relation to Bringing Forward Development Opportunities

This approach involves linking the delivery of more valuable uses against the delivery of less valuable uses and therefore allowing an element of cross subsidisation between different uses within an overall site. This would typically be for residential schemes to financially support office or leisure development which would otherwise be undeliverable within current market conditions. This approach is generally most relevant to town centre schemes where commercial elements in the ground or lower storeys could be delivered in conjunction with apartments or similar uses on upper floors. A site which may benefit from this approach is as follows;

 Territorial Army Centre (Site Ref: 7)

Extending to circa. 0.39 hectares this is an irregular shaped site with one main building fronting Elizabeth Road and several outbuildings fronting Alexandra Road. The former TA buildings are now occupied by the Volunteer Bureau with the remaining buildings on site being vacant.

It is noted that the site is identified for mixed use within the Corby Town Centre Masterplan. It is noted however that this site does form part of a larger area subject to an outline planning consent granted to Land Securities subject to a Section 106 Agreement which identified the north eastern part of the site being for parking and servicing. We understand from discussions with the HCA that these proposals are unlikely to be acceptable to the HCA based upon the benefits and level of receipt potentially generated.

On this basis assuming that the site is promoted by the HCA for mixed use development, assuming that 19 housing units could be accommodated on site, this may assist in facilitating future provision for circa. 1,308 sq.m. of retail/leisure space. It is noted that

______

Corby Borough Council Local Brownfield Strategy – February 2012 35

this is a small site; however it could be required as part of any planning consent that a certain element of retail/leisure development is required to be constructed against the completion of agreed levels of new dwellings.

 Station Sidings (Site Ref: 22)

This is a relatively small site extending to 0.77 hectares situated approximately ¾ mile east of the town centre and immediately adjacent to Corby railway station and transport interchange.

It is noted that the surrounding area comprises a mix of uses and further note that the potential uses of this site could be either offices or residential or a mix of these uses.

In addition, there may be the opportunity for some small scale ancillary retail adjacent to the station.

The ability therefore to incorporate a number of uses on site, given the excellent location close to the railway station, may assist in mitigating the risk in bringing the site forward for a single use, particularly given the delays in bringing forward the major residential scheme now subject to planning application by Strata Homes and the offices previously developed by Priority Sites Limited some of which are now vacant.

8.2.4 Affordable Housing Provision

The viability assessment for each of the residential schemes has included residential provision on the basis of either existing planning consents or in accordance with Local Authority affordable housing requirements. Whilst the need for additional affordable housing is recognised throughout Corby, such provision does have an adverse impact on development viability and where there are further constraints on sites, associated costs associated with site condition may further prevent brownfield sites being brought forward in current market conditions.

Where there are viability issues on schemes, developers often seek to negotiate smaller affordable housing requirements on the basis that such requirements prevent delivery; however a wider approach to reducing affordable housing requirements would undoubtedly positively impact upon the rate of development of brownfield sites across Corby in current market conditions.

Whilst this strategy does not support such an overall approach, it should be recognised that this would be one route to accelerate the bringing forward of residential development on brownfield sites across the Borough.

8.3 Commercial Development

As previously identified within Section 4.0 of this strategy, current levels of value for both office and industrial development are at levels which are unviable in current market conditions and therefore there is little or no speculative commercial development ongoing within Corby. Developers with sites are seeking pre-sales or pre-lettings in order to bring forward development opportunities.

The existing shortage of good quality commercial and industrial accommodation has contributed to rental levels and capital values being at relatively low levels compared to the wider Northamptonshire sub region which has contributed to a lack of investor confidence. This is less evident in relation to major distribution use, with a far greater impact on

______

Corby Borough Council Local Brownfield Strategy – February 2012 36 development for smaller commercial units suitable for SMEs. Any strategy for the utilisation of brownfield sites for commercial development will require to enhance the levels of values currently obtainable to support project viability. This would require to be undertaken through the delivery of good quality new accommodation in the short term to enhance investor confidence to seek to bring forward increased rates of development on brownfield sites.

In the short term such an approach will require some levels of public sector support to assist project viability particularly for smaller unit schemes; however should such an approach be successful then the requirement for such support should significantly reduce in the future. In bringing forward the development of brownfield sites for commercial purposes then it is proposed to consider the following measures;

8.3.1 JESSICA programme - ERDF

As previously noted an East Midlands Urban Development Fund (JESSICA) is available for commercial development projects within the East Midlands although it is to target specifically science/innovation and high technology type schemes. It is noted that uses such as hotels, residential, retail and leisure schemes are not eligible for funding under such a programme.

The restrictions relating to the JESSICA programme have been identified earlier within this report in that the type of uses that would qualify are restricted and considered difficult to deliver in isolation unless part of a wider scheme and comprehensive network of support and therefore may not be appropriate for any of the sites identified in Corby.

The JESSICA fund is also understood to be time limited with expenditure and financial completion required by 2015, which may make timescales for delivering schemes critically tight in terms of time.

It is worth acknowledging for the purpose of this report that the JESSICA fund is available, although the extent of funding currently available within the scheme is not known given the recent call for activity and whether there has been any significant interest in this regard.

In terms of relevance to the Corby sites, consideration could be given to the use of this fund if for example within some of the larger developments such as Phoenix Parkway there could be an element of innovation or high technology space which could benefit from investment under the JESSICA scheme.

8.3.2 Site Assembly

There are a number of brownfield sites identified which are adjoining and would benefit from a comprehensive approach to development. Such sites could be acquired either by the Local Authority or by one of the existing landowners and marketed as a comprehensive opportunity which would be more viable and attractive to occupiers and investors than individual site ownerships which may also compete in terms of future marketing.

It is noted however that in current market conditions it may be difficult to secure the necessary funding to meet the cost of site acquisition and therefore a more appropriate approach could be to seek and put in place a collaboration agreement between landowners which would identify the basis upon which sites could be brought forward. This may be useful in terms of offering flexible employment sites to the market in terms of size of plot and mix of uses and agreeing phasing so that the more constrained sites are brought forward as a later phase of development.

______

Corby Borough Council Local Brownfield Strategy – February 2012 37

Examples of identified brownfield sites where there may be benefits from a site assembly joint/collaboration approach include the following;

 Stanion Lane Plantation (Site Ref: 1 & 2)

It is noted that the two sites identified in the NLUD register form isolated and individual plots within the wider Stanion Lane Plantation scheme which is to be brought forward by Prologis. These sites are clearly not capable of development in isolation and are proposed therefore to be included as part of a joint venture with Prologis. They have been assessed on that basis. It is noted that these sites form part of the Euro Hub cluster and given the size, nature and location of these sites clearly it is sensible to include these within this cluster and to come forward as part of the wider development.

 Shelton Road, Sondes Road and Birchington Road (Site Ref: 40, 41, 43 and 46)

These four sites form Cluster 1a and there could be benefit if various landowners collaborating in terms of bringing sites forward for a complementary mix of uses on a phased basis. By working collaboratively a flexible range of employment land could potentially be offered to the market as opposed to sites individually competing with each other. These sites are included within cluster 1a and given the location, nature and proximity of these sites inclusion within the cluster is a sensible proposition.

 Phoenix Parkway, South of Sludge Beds and Genner Road (Site Ref: 27, 48 and 93)

These adjoining sites form part of Cluster 1c and some development has already been undertaken by Clowes in respect of the Alpha Court scheme. It may be that the South of Sludge Beds site could benefit from shared infrastructure but clearly would require collaboration between landowners. Potentially the combination of these sites could enable a greater degree of flexibility in terms of size of plot and configuration offered to the market.

The inclusion of the South of Sludge Beds site, contained within cluster 1c and again given the proximity and number of sites in this area, clustering is a sensible approach in terms of delivery.

8.3.3 Midlands Local Land Initiative

As previously noted public sector land can be vested for development on the basis that a private sector partner is selected however payment for the land is on a deferred basis to assist with cashflow. A site which may be suitable for inclusion within such an initiative is noted as follows;

 Seymour Plantation (Site Ref: 73)

Located to the north west of the town centre this site is the one situated furthest out from the town centre.

The location is however reasonably accessible and this site has been considered as potentially suitable for out of town office park type development in the medium to longer term. Potentially this site could provide a complementary range of office space in a location where occupiers do not necessarily wish or need to be within the town centre.

Although the site is not within the ownership of the public sector, given the issues relating to contamination of this site and adjoining site in the ownership of the County ______

Corby Borough Council Local Brownfield Strategy – February 2012 38

Council, we understand that the land will be in the control of the County Council through a 99 year lease to be granted following clean up of the site.

On this basis discussions with the County Council may identify that this site could appropriately be included within any Midlands Local Land Initiative and identified for development in the medium to long term.

8.3.4 Production of Development Frameworks

Development frameworks provide a key role in providing certainty to landowners and developers in bringing forward development proposals and avoid potential delays at the consultation and planning stages if inappropriate uses are pursued. There are various costs associated with the preparation of development frameworks; however these maybe offset against the benefits of bringing forward sites where landowners are not prepared to invest in securing planning consents in current market conditions. It is noted that development framework documents should not be overly prescriptive in terms of design detailing where this is not required for specific purposes and should generally be limited to the nature and overall form of development.

An example of where such an arrangement may be appropriate is set out below;

 Sondes Road, Birchington Road and Shelton Road (Site Ref: 40, 41, 46 and 43)

Delivery of these sites could be considered in the context of a comprehensive development scheme, associated with adjacent opportunity sites. It is noted that these sites are allocated for B1, B2 and B8 use with the exception of land at 40 Shelton Road that was not allocated in the saved Local Plan. The development framework could provide clarity as to where potential uses could be best located, densities and potential mechanisms to deal with site constraints and to maximise viability for development.

8.3.5 Use of Community Infrastructure Levy Arrangements (CIL)

The use of a CIL arrangement is effective in the overcoming of high upfront development costs which may include local or sub regional infrastructure and remediation works, which would then be recovered by the Local Authority through the development period.

The arrangement would be established in accordance with a charging levy as part of the adopted LDF.

It is anticipated that the Local Authority may need to secure the upfront funding potentially utilising external funding sources secured against other Council assets. Due to the nature of the arrangements and the costs associated, this would normally be used for large scale projects with a limited number of ownerships. On this basis we consider the following sites where this arrangement could be considered;

 Stanion Lane and Former Car Storage Depot (Site Ref: 01, 02 and 90)

It is noted that these sites are in three main private sector ownerships with one of the key issues being the necessity for significant new on site infrastructure including the potential for rail connection in order to accommodate new development. We also understand that there may be remediation works required in order to prepare the site for development.

The use of CIL type arrangements could therefore potentially assist in meeting some of the costs of on site remediation and new on site infrastructure being provided to the site ______

Corby Borough Council Local Brownfield Strategy – February 2012 39

including rail connection, which could then be recovered during the redevelopment of these sites.

The inclusion of these sites within part of the Euro Hub cluster is considered to be appropriate given the nature, location and proximity of the sites and potential for shared infrastructure facilities and enhancements.

8.3.6 Utilisation of TIF Provisions

As previously noted, there is no existing enabling legislation for the set up of TIF projects within England at the current time; however a number of pilot projects are currently being delivered and a further announcement in this regard is anticipated and the first programmes operating within around 12 months.

Potential areas where a TIF may be considered could be the brownfield sites located to the east of the town centre where for a number of these, as already noted, major remediation and in some cases upfront infrastructure works are required to be able to unlock development and facilitate accessibility.

Clearly the opportunity in relation to bringing forward a TIF is uncertain and unclear at this time; however could be an appropriate mechanism to be considered in the future for a number of the brownfield sites.

From the review of the Enterprising Northamptonshire document we are aware that the County Council has identified two major infrastructure gaps which need to be filled to enable future economic growth to be delivered. Potentially TIF could be utilised for the A43 Northampton to Kettering improvements and the Daventry Development Link. Northamptonshire Enterprise Partnership are to work with the County Council to develop and test the business case for using TIF to bring forward these projects and potentially other key infrastructure projects. Ultimately the ability to roll out additional TIFs including any which may directly be within Corby can be identified in due course.

8.3.7 Regional Growth Funding

A number of different funding regimes have been combined by the Coalition Government under the Regional Growth Fund, with the first two rounds of bidding completed under the scheme.

Initial feedback from the bidding process has indicated that many of the successful projects are likely to be those which directly deliver new employment opportunities such as support for business expansion in a similar way to the previous Grant for Business Investment (GBI) programme that was previously operated.

We understand from discussions with various LEPs throughout the Country that given potential under spend on the previous RGF bidding rounds that other funding mechanisms are being put in place such as the Growing Places Fund which has the opportunity to support both residential and commercial development schemes which are immediately deliverable. A Growing Places Fund allocation has been awarded to SEM LEP and as previously noted bids have been submitted via the Council and North Northants Development Company for three schemes seeking funding.

______

Corby Borough Council Local Brownfield Strategy – February 2012 40

8.3.8 Use of Prudential Borrowing Arrangements

In the absence of other forms of development, a number of Local Authorities have sought to secure prudential borrowing facilities to support new development within their area. Such facilities may be utilised to provide equity investment, loan finance or gap funding to bring forward projects which would otherwise not be delivered within current market conditions however would require to comply with the appropriate state aid legislation.

The use of such facilities within the current funding market is considered to reduce developer risk for commercial development projects as down side risks are shared with a third party and also note that many developers take confidence from acting in a joint capacity with the relevant Local Authority. It is important that should prudential borrowing be secured then this should be targeted carefully at specific areas which will have the maximum impact upon the development of brownfield sites and on the local economy. Funding could be utilised to support a programme of site remediation to ensure that sites were immediately available to developer requirements in areas where there is anticipated to be existing levels of demand.

For projects such as the Derby Regeneration Fund, there is an expectation of recovery of investment and therefore an ability to recycle monies within the fund (dependent upon the eventual financial outcome of individual projects) and therefore may support future schemes on brownfield sites within the medium or longer term.

It is recommended that consideration be given to the securing of prudential borrowing facilities and an appropriate programme of investment which may utilise such a facility.

 Phoenix Parkway (Site Ref: 27)

This site is in the ownership of Clowes Development extending to a net developable area of circa. 13.93 hectares. The first phase of development has been undertaken on this site and is largely occupied being the Alpha Court scheme.

Subject to demand, there could be the potential to encourage further development in the short to medium term whereby Prudential Borrowing could potentially be offered by the Local Authority either to address viability issues or restrictions in the availability of development finance.

Prudential Borrowing might also facilitate the construction of complementary space to the adjoining scheme with subsequent disposals/rental income potentially paying off both the interest and capital elements of the Prudential Borrowing sum if any subsequent development on the site were successful.

 Genner Road (Site Ref: 93)

This site has been identified to be potentially suitable for new office development given the excellent location and potentially deliverable in the short to medium term.

We understand from discussions with agents that there are considered to be viability issues in terms of bringing this site forward as values are insufficient to support the costs of development.

On this basis investment in the site either on a joint venture/equity basis or potentially through some small element of gap funding may be adequate to kick start development in addressing any viability issues and establishing confidence in order for new development to be delivered on this site. ______

Corby Borough Council Local Brownfield Strategy – February 2012 41

8.4 Development Vehicles and Tax Efficient Structures

As an incentive for the regeneration of brownfield sites, the Government has introduced a series of tax incentives including capital allowances for the undertaking of decontamination and remediation work undertaken particularly for sites which have historic contamination for a period in excess of 15 years. It is noted that only private sector companies are eligible to receive such benefits and a number of specialist development companies are currently working within the area who are seeking to undertake qualifying site remediation projects to benefit from the specific tax breaks appropriate for site decontamination.

Such companies would also consider site remediation over a number of adjoining sites which would provide potential economies of scale and particularly where a site remediation framework may be agreed with the Environment Agency which would allow materials to be moved between individual ownerships without the payment of appropriate levels of landfill tax (i.e. the various sites are treated as a single project).

______

Corby Borough Council Local Brownfield Strategy – February 2012 42

9.0 MONITORING AND EVALUATION

It is considered an important element that the Strategy should be regularly updated and maintained as a “live” document as opposed to a statement at a moment in time which will quickly become outdated.

It is considered appropriate that the Corby LBS will be reviewed on a regular basis to update the facts and figures that have been presented from various sources, in order to ensure that it represents a robust and up to date position to inform the various authorities approach towards brownfield land.

Related to this, the supporting strategies and monitoring mechanisms will be updated to help monitor the take up of brownfield land and therefore provide a measure of the success of the LBS. The following provides a commentary on how each document or process will be reviewed;

i. Annual Monitoring Report – The AMR will be published each year and will demonstrate the various authorities performance against national and regional targets and indicators, including the progress against the housing trajectory and the national brownfield target.

ii. National Land Use Database – The Councils will submit its NLUD return to the Homes & Communities Agency annually as appropriate, to ensure that brownfield land statistics are kept up to date and the stock of vacant brownfield sites may be assessed within the Borough.

iii. Annual Housing Report – This report provides a factual update of the housing land supply position each year and details the characteristics of the year’s housing completions and overall supply including sites under construction and with planning permission.

iv. Strategic Housing Land Availability Assessment – The SHLAA will continue to be reviewed and updated to take account of the general housing market and changing circumstances on particular sites, such as a site gaining planning permission or commencing construction. The update also takes account of new sites that have come forward or have the potential to come forward that were not included in previous versions of the SHLAA.

v. Contaminated Land – The Environmental Services office will continue to assess and respond to site investigation reports submitted in support of planning applications and will keep land contamination records up to date as sites come forward, to ensure that up to date advice can be given out on the potential risks and challenges to sites.

______

Corby Borough Council Local Brownfield Strategy – February 2012 43

10.0 CONCLUSIONS

The decline in traditional manufacturing and heavy industries which have been core to the Corby economy over the past left a legacy of brownfield sites within the borough. As identified within the Core Spatial Strategy for Northamptonshire, the successful reutilisation of these sites is critical to the future economic prospects of the area in terms of creating good quality housing to meet housing need in the borough, to increase choice and particularly for aspirational housing required to attract skilled workers and managers.

Furthermore, the supply of well accessed brownfield sites can be used to attract new employers to the area and in particular to provide the opportunity for Corby to rebalance the economy, support an increase in wages through the attraction of higher added value businesses which can support increased wage levels and thus close the output gap.

There are very few greenfield development opportunities within Corby because the town is set for considerable expansion with sustainable urban extensions to the North East and West of the town that will provide extensive greenfield development opportunities. Therefore the reuse of brownfield sites is critical both in terms of land supply but also to address the dereliction which affects many areas within the borough.

However the combination of addressing costs of site remediation and the relatively low values has resulted in viability issues in bringing forward regeneration projects on brownfield sites and in particular for commercial developments. Many sites have remained derelict through the economic boom between 2005-2007 with viability further declining within falling property values over the past 2-3 years.

The public sector spending cuts have impacted on the ability of landowners and developers to secure grant assistance to deliver regeneration projects.

Accordingly, the Local Brownfield Strategy considers the nature and scale of the 21 sites identified to us which provide the capacity for circa. 955 new dwellings, 462,680 sq.m. of industrial and commercial development as well as 61,169 sq.m. of retail/leisure uses.

However, whilst there is reasonable prospects of residential schemes to come forward with some improvement in market conditions, the viability of commercial schemes remains questionable and it is important to consider key measures to support delivery which includes the potential to utilise public investment mechanisms including Prudential Borrowing facilities.

Any strategy will also need to consider key opportunities for a proactive approach which may include site assembly, Tax Incremental Finance initiative and Community Infrastructure Levy to unlock key sites which are affected by issues such as the high uplift costs of site remediation or infrastructure works. It is understood that some of these investment mechanisms are being considered by Northamptonshire Enterprise Partnerships and further opportunities for local based initiatives could stem from any successful sub-regional projects.

It is also necessary to give full consideration as to the use of structures which maximise the tax incentives to private sector developers in the undertaking of decontamination as well as the use of public sector owned land in bringing forward opportunities in return for deferred receipts.

In conclusion, the supply of brownfield sites across Corby provides a major potential future resource for new development and the wider regeneration of the area. However the costs

______

Corby Borough Council Local Brownfield Strategy – February 2012 44 associated and current levels of value create challenges over coming years but through a comprehensive and proactive approach to the associated challenges are confident that these sites will play a key role in the revitalisation of the Corby Borough.

……………………………….. Date: …………………………

Rachel Lister BSc (Hons) MRICS Thomas Lister Limited 11 The Courtyard Buntsford Gate Bromsgrove B60 3DJ

______

Corby Borough Council Local Brownfield Strategy – February 2012 45

APPENDIX I - MARKET ASSESSMENT

______

Corby Borough Council Local Brownfield Strategy – February 2012 46

APPENDIX II - APPENDIX D PROFORMA

______

Corby Borough Council Local Brownfield Strategy – February 2012 47

APPENDIX III - SITE EVALUATION PROFORMA

______

Corby Borough Council Local Brownfield Strategy – February 2012 48

APPENDIX IV - DELIVERY PERIOD FOR THE SITES

______

Corby Borough Council Local Brownfield Strategy – February 2012 49

APPENDIX V - PLANS IDENTIFYING VARIOUS CLUSTERS

______

Corby Borough Council Local Brownfield Strategy – February 2012 50

APPENDIX VI - PRELIMINARY VIABILITY ASSESSMENTS

______

Corby Borough Council Local Brownfield Strategy – February 2012