THIS PAPER RELATES TO ITEM 7 COUNCIL ON THE AGENDA

Report to Planning Committee

Date of Meeting: 9th June 2011

Subject: Applications to Partially Relax the Terms of Section 75 Agreement to Allow Supermarket Within Unit 4 of the Extension at Sterling Mills Outlet Village, Moss Road, Tillicoultry

Applicant: ING Lionbrook Property Fund, 60 London Wall, London

Agent: Shepherd and Wedderburn LLP, 1 Exchange Crescent, Conference Square,

Prepared by: Keith Johnstone, Principal Planner

Electoral Ward: Clackmannanshire North

1.0 Purpose

1.1. The purpose of this report is to consider two applications from the owners of Sterling Mills Outlet Village to vary the part of the Section 75 Agreement which regulates the type of retailing that can be carried out at the site, to allow a supermarket comprising 962 square metres of net convenience floorspace within part of the undeveloped extension to the Village which was approved on 30 October 2007 (Ref No 06/00427/FULL).

1.2 The applications have been submitted under Section 75A of the Town and Country Planning () Act 1997, as amended. As there are two Section 75 Agreements enforceable on the site at present, the owners have submitted two applications but essentially they are seeking the same outcome. The Council has 2 months to determine the applications and can only approve or refuse the proposed modification as set out in the applications.

1.3. The report examines the applications having regard to:

(a) the purpose of the existing Section 75 restrictions;

(b) the Development Plan position (including the predicted retail impact and sequential test which requires alternative sites to be considered);

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(c) relevant national policy guidance;

(d) the advice from an independent consultant who carried out a review for the Service of the Retail and Sequential Assessment submitted by the applicant;

(e) the information submitted in support of the applications, including the Retail Impact and Sequential Assessment and

(f) the advice from the Council's Roads and Transportation Unit.

2.0 Recommendations

2.1. It is recommended that the Council refuses the applications to vary the existing Section 75 Agreement to allow a supermarket to occupy part of the proposed extension to the Sterling Mills Outlet Village for the following reason:

1. The proposed modification contained in the applications to allow the operation of a supermarket at Sterling Mills Outlet Village would be contrary to the Clackmannanshire Development Plan, and in particular, Policies S1 (Role and Function of Strategic Shopping Centres), S4 (Supermarkets) and S5 (Other Shopping Development) of the Clackmannanshire and Structure Plan and Policy JOB6 (New Shopping Facilities) of the Clackmannanshire Local Plan, and the relevant guidance in Scottish Planning Policy relating to town centres and retailing by reason of;

(a) the proposed size and scale of the supermarket which would not be commensurate with the size of community to be served and would normally be directed to Alloa town centre to accord with Local Plan Policy JOB 6

(b) the predicted high level of retail impact on existing convenience businesses within Tillicoultry town centre and the consequent adverse impact on the vitality and viability of the town centre, having regard to the conclusions in the report titled "Review of Retail Impact and Sequential Assessment for Proposed Supermarket at Sterling Mills Outlet Centre", Keppie, May 2011.

(c) the potential availability, within a reasonable period of time, of a sequentially preferable alternative site directly adjacent to Tillicoultry town centre, subject to planning consent.

3.0 Background to the Proposals

3.1. Planning permission for Sterling Mills Outlet Village was granted in 1997 (Ref C/97/197). The approval was granted subject to a Section 75 Agreement (1998) which includes a restriction on the type of retail and service uses that could operate from the site. The Agreement also covers the Sterling Furniture site, the owners of which had submitted the above

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planning application. The restriction was considered necessary to regulate the development so that the Sterling Furniture/Sterling Mills Retail Complex maintained its function as an out of centre household and personal shopping centre and would not be in direct competition with existing town centres within Clackmannanshire, particularly Tillicoultry Town Centre. The type and range of businesses restricted by the Agreement included use as a supermarket or superstore and the full list is provided in Appendix 1 of this report.

3.2. An application by the owners, ING Lionbrook Property Fund, to extend Sterling Mills to create up to 2,463 square metres of gross retail floorspace. was approved on 30 October 2007 (Ref 06/00427/FULL). The approved Site Plan (see Site Plan in Appendix 2) shows the proposed layout of the extension which comprised 10 shop units. However, the planning permission does not regulate the configuration or size of the individual shop units so a smaller number of larger units could be developed. The planning permission was granted subject to the conclusion of a revised Section 75 Agreement (2007) which extended the same restrictions over the type and range of retailing and services that applies to the original development but also regulated parking management and a Travel Plan. The planning permission has not been implemented to date. The restriction on the types of retail business that could operate was required to ensure the development complied with the relevant retail policies contained in the current Clackmannanshire Development Plan, including Clackmannanshire and Stirling Structure Plan Policy S1 (Role and Function of Strategic Shopping Centres). The Plan defines the role of Sterling Mills as an "Out of Centre Personal Shopping Centre" for a visitor orientated type of shopping.

3.3. On 1st February 2011, new procedures under Section 75A of the Act came into force which allow a party against whom a planning obligation is enforceable, to submit an application to the planning authority to have the obligation modified or discharged. The two Section 75 Agreements relating to Sterling Mills would fall within the definition of “planning obligation“ under the above Act. The authority has 2 months to determine the applications and can only grant or refuse the proposed modifications as submitted. The option of granting the applications subject to conditions is not available. There is a right of appeal to Scottish Ministers against the authority's decision or failure to determine the application.

3.4 The site owners have submitted applications under Section 75A seeking a modification to both of the obligations which regulate the site, to permit an area up to 962 square metres of net convenience retail floorspace to be used for the purposes of a supermarket within the area of the site which has approval for the extension. The two applications are seeking the same outcome. The applicant has stated that the 'existing' and any additional new- build retail floorspace within the Outlet Village would remain restricted by the terms of the existing Section 75 Agreements. Further details of proposals are provided and discussed in Section 5.0 below

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4.0 Representations

4.1 The usual publicity and opportunity for third parties to make representations associated with applications for planning permission do not apply to the application procedure under Section 75A. Only parties against whom the obligation is enforceable have to be notified by the authority and have a right to make representations. The 33 current tenants at the Outlet Village and Sterling Furniture, in respect of the 1998 obligation, have been notified by the Service.

4.2 No representations have yet been received as a result of this notification process although representations were received in relation to earlier requests.

5.0 Planning Considerations

5.1 Although the applications are not planning applications, the planning merits or otherwise of the proposed modification needs to be assessed against the relevant provisions of the Development Plan and other planning guidance. This is examined below.

5.2 The applications were accompanied by a Retail Impact and Sequential Assessment (prepared by DPP) dated July 20th 2010. The report examines the retail capacity within the Tillicoultry area, the predicted retail impact of the proposal on existing businesses in Tillicoultry town centre and includes a sequential assessment of alternative sites for a supermarket in the area.

5.3 The Service have received comments from a shopkeeper in Tillicoultry town centre who raised concern that the predicted figures in the applicant's Retail Impact Assessment relating to turnover in existing town centre convenience shops appeared to significantly underestimate actual figures from his experience. He was concerned that the potential retail impact and trade diversion from town centre businesses could be greater than predicted in the Report. In response, a consultant was appointed to provide independent expert advice on the retail impact and sequential assessment, given the specialist nature of this type of assessment and to help satisfy any potential concerns about the robustness of the Service's conclusions. The consultants conclusions have been incorporated into the report below.

5.4 The details submitted in support of the applications indicate that, while there is no guarantee that all of the approved extension will be built, the largest unit (Unit 4) shown on the approved plans for the extension would be let to a food store operator. The Unit measures approximately 1115 square metres in gross floor area (gfa) and the applicant's agent has indicated that the net floorspace used to sell convenience goods would be 962 square metres. The store would mainly serve as a weekly shopping and top up shopping facility within the Tillicoultry and Coalsnaughton area. Comment - A summary of the current Development Plan policy position as it applies to the proposal is provided in Appendix 3 to this report. This concludes that the proposed modifications would be contrary to the strategy and relevant shopping policies in the Development Plan, namely Policies S1, JOB 6, J27 and Proposal SP2.

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Structure Plan Policies S4 (Supermarkets) and S5 (Other Shopping Development) sets out the key criteria that would need to be satisfied to provide support for retail development which would fall outwith the Development Plan’s strategy. These are examined and discussed below;

(a) the development would be commensurate in scale with the size of the community to be served - The applicant has stated that the proposed unit would have a gfa of 1115 square metres. Local Plan Policy JOB 6 directs retail developments with a gfa greater than 1000 square metres to Alloa town centre or to the edge of Alloa town centre. The proposal would not accord with Policy JOB 6 and as the proposed floorspace is higher than expected outwith Alloa , it is not considered to be commensurate in scale with the size of the community. The Council’s consultant has also highlighted that the proposed ratio of net floorspace to gross floorspace (962 sqm to 1115 sqm respectively) would be 86% which is unusually high for a mainstream supermarket operator. For example, the ratio for a typical "Tesco Metro" outlet is 54%. If that percentage were to be applied, this would suggest a potential supermarket of nearer 1800 sq metres of gross floorspace. If the ratio does not match the retailer requirements then further adjustments to floorspace may be required and this may result in demand for a larger gross floor area greater than specified in the application. In this regard, it is worth noting that the Traffic Statement submitted in support of the applications refers to the a gross floorspace of 1300 sqm of food retail.

The proposal would not satisfy this criteria.

(b) the development would meet an identifiable deficiency in shopping provision and would not undermine the vitality and viability of town centres in the area. - the Retail Impact assessment submitted with the applications predicts the likely retail impact of the proposal on existing stores. The retail impact is expressed as the percentage reduction in turnover below the average level of a store or centre. The value of the retail impact figures would inform whether the proposal would be likely to undermine the vitality or viability of the town centre. This is considered below;

• The applicant's assessment of the predicted average reduction in turnover in Tillicoultry town centre convenience shops would be 8%. They conclude that the proposal would not result in a significant adverse impact on the vitality and viability of Tillicoultry or any other town centre within Clackmannanshire. Thy highlight that the proposed supermarket would account for approximately a tenth of the total floorspace of Sterling Mills.

• However, the independent Consultant appointed by the Council (the Consultant) has advised that the impact is likely to be more than double at 18% (and 22% for the largest town centre store). This is considered to constitute a significant adverse impact on these existing town centre businesses and the consultant has

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advised that this would risk undermining the vitality and viability of the town centre and the applications should therefore be refused. The Consultant considers that the applicant's assessment of retail impact is too low and unrealistic and underestimates the likely diversion of trade diversion to the proposed supermarket form existing town centre businesses. The Consultant also advises that a significant proportion of trade would be diverted from existing supermarkets/ superstores within Alloa where the majority of local residents presently carry out their convenience shopping. While this diversion is not considered to have a significant retail impact on the businesses within Alloa town centre, if the levels of diversion from Alloa were not achieved, this may result in a higher level of trade diversion from businesses in Tillicoultry town centre. The retail impact on other town centres is not considered to be significant.

The proposal would not satisfy this criteria.

(c ) the development has satisfied the sequential approach. - the Sequential Assessment undertaken by the applicant concluded that the proposal meets the sequential test since there is no suitable or available alternative site particularly in or adjacent to Tillicoultry Town Centre. The Development Plan and national policy guidance in Scottish Planning Policy (SPP) require retail proposals to satisfy the sequential test (ie the location should be considered having regard to the availability and suitability of a site in the following order of priority; town centre, edge of centre, other commercial centres identified in the development plan and then accessible out of centre locations.)

Sterling Mills would be classed as an "other commercial centre" and is therefore not a priority location relative to the established town centre in Tillicoultry. The applicant identified and considered 7 potential alternative sites within the catchment in Tillicoultry, comprising 4 sites within the town centre, 1 on the edge of and 2 out of centre. These have all been discounted by the applicant due to the size of the sites and also location, access and the availability of the land. We accept the applicant’s conclusions for 6 of the 7 sites based on the proposed size of store. The exception would be the Community Centre site at Institution Place (referred to as Site 3 in their Report). This is an edge of centre site as it is directly adjacent to the town centre boundary defined in the Local Plan. Their report states that Site 3 would be large enough (unlike any of the potential town centre sites they have identified) but has been discounted for 2 planning reasons, namely;

y the applicant considers that the site is unavailable as it is owned by Clackmannanshire Council and has not been identified as surplus to requirements. Comment - The site is subject to ongoing review and may become made available within a reasonable period. Therefore, this reason would not

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be a factor which would justify discounting the site at this time.

y the applicant considers that access for parking and service vehicles would be problematic. Comment - no detailed analysis of the potential access arrangements has been carried out to demonstrate that a suitable access could not be provided to a development on this site and therefore it would obviously be premature to discount the site for this reason.

Our assessment of this issue is that Site 3 identified by the applicant in their assessment represents a potentially more suitable supermarket development opportunity in terms of the sequential test. Specifically, it is located on the edge of Tillicoultry Town Centre and would be preferential in land use planning terms given its potential to regenerate the area by enhancing the vitality and viability of the existing town centre and to result in linked trips by shoppers to other town centre businesses. The Consultant concluded that this site would be ideal for "a small supermarket given its location at the heart of the town and relationship to the existing town centre facilities. It would be likely to have a positive impact on the town centre". It is understood that an agent for an existing convenience store in Tillicoultry has already expressed an interest in the site suggesting the possibility of a replacement store rather than solely an additional store.

The proposal would not satisfy the sequential test nor this criteria.

5.5 In conclusion, the proposal would undermine the vitality and viability of Tillicoultry town centre and would not satisfy the sequential test since a sequentially more suitable site could reasonably exist. Consequently, the proposal would not satisfy the tests set out in Development Plan Policies S4 and S5 to justify an exception to the strategy and policy guidance.

Other Material Considerations

5.6 Scottish Planning Policy, 2010, (SPP) provides national planning policy guidance on town centres and retailing. The most relevant points are;

y The sequential approach should be used to select locations for retail uses including proposals to expand existing developments.

y Applicant should demonstrate that more central options have been thoroughly assessed the impact on existing centres is acceptable.

y Development Plans should identify a network of centres and explain the role of each centre in the network. Any significant changes to the function or role of centres should be addressed through the Development Plan.

y Investments in a centre should be supported where it would not undermine town centres.

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Comment - It is considered that our conclusions on the applications are consistent with the relevant objectives and guidance in the SPP.

5.7 The inclusion of a supermarket at Sterling Mills could have an impact on the traffic frequency and patterns which were previously agreed in the assessment of the application for the extension. The applicant was asked to submit a Transportation Statement (TS) to address any potential impact due to the proposed modification on the functioning of the access to the site, Moss Road and parking demand within the site. Roads and Transportation have reviewed the Statement and have offered the following advice;

• the conclusions in the TS are considered to be suitably robust relating to trip generation, the risk of increased congestion on Moss Road and junction capacity. The proposed modification would not be likely to result in any significant additional adverse impact on the surrounding road network.

• a zebra crossing should be considered at the existing pedestrian crossing point opposite Sterling Furniture due to the likely increase in pedestrian demand crossing Moss Road. Comment - The provision of a "zebra" crossing would have to be installed in any case as a condition of the planning permission for the extension.

5.8 The applicant has indicated that the introduction of a supermarket operator would help bolster the existing trade at the Outlet Village helping ensure the long term future and viability of the centre and result in the implementation of the approved plans for an extension to the Outlet Village. Comment - This would not outweigh the Development Plan position having regard to the potential significant adverse impact on the vitality and viability of Tillicoultry town centre which is predicted to arise. There is also no guarantee that beyond a supermarket the applicant would construct the entire extension.

5.9 The applicant has indicated that they have received interest from a food store operator for the unit. Comment - we consider that the sequentially more suitable site could be available within a reasonable period and would be likely to have a positive impact on the vitality and viability of Tillicoultry town centre. As stated above, it is understood that there is also market interest in the sequentially preferred site adjoining the town centre.

Conclusions

5.10 The applications to partially relax the Section 75 Agreement to allow a supermarket to operate at the Outlet Village have been considered on their planning merits having regard to the relevant Development Plan, national policy guidance, the advice from the consultant on retail impact and sequential assessment and advice from Roads and Transportation. The location of a supermarket at Sterling Mills would be contrary to the retail strategy and hierarchy set out in the Development Plan. The proposal would

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not satisfy the requirements set out in Policies S4 and S5 which would justify an exception to the hierarchy, principally since the site is not considered to be the sequentially most suitable site, if a supermarket of the proposed size was to locate in the area. The potential economic benefits to the Outlet Village outlined by the applicant have been considered in our analysis but these have to be balanced with the potential adverse impact on Tillicoultry town centre and the objectives and strategy of the Development Plan and SPP to promote and sustain the vitality and viability of town centres. Consequently, we consider that the applications should be refused.

6.0 Sustainability Implications

6.1. The recommendation would accord with the retail strategy in the Clackmannanshire Development Plan which supports the role of town centres for convenience shopping. The potential availability of a sequentially more suitable site would support the vitality and viability of Tillicoultry town centre which would contribute to sustainable economic growth.

7.0 Resource Implications

7.1. Financial Details

7.2. The full financial implications of the recommendations are set out in the report. This includes a reference to full life cycle costs where appropriate. Yes ;

7.3. Finance have been consulted and have agreed the financial implications as set out in the report. Yes ;

Staffing

7.4. None

8.0 Exempt Reports

8.1. Is this report exempt? Yes (please detail the reasons for exemption below) No ;

9.0 Declarations

The recommendations contained within this report support or implement our Corporate Priorities and Council Policies.

(1) Our Priorities 2008 - 2011 (Please double click on the check box ;)

The area has a positive image and attracts people and businesses ; Our communities are more cohesive and inclusive ; People are better skilled, trained and ready for learning and employment

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Our communities are safer Vulnerable people and families are supported Substance misuse and its effects are reduced Health is improving and health inequalities are reducing The environment is protected and enhanced for all ; The Council is effective, efficient and recognised for excellence

(2) Council Policies (Please detail)

Clackmannanshire Development Plan.

10.0 Equalities Impact

10.1 Have you undertaken the required equalities impact assessment to ensure that no groups are adversely affected by the recommendations? Yes No ;

11.0 Legality

11.1 It has been confirmed that in adopting the recommendations contained in this report, the Council is acting within its legal powers. Yes ;

12.0 Appendices

12.1 Please list any appendices attached to this report. If there are no appendices, please state "none".

Appendix 1 - List of Business Uses restricted by Section 75 Agreement at Sterling Mills Outlet Village.

Appendix 2 - Location Plan

Appendix 3 - Summary of development plan position in relation to the proposed modifications

13.0 Background Papers

13.1 Have you used other documents to compile your report? (All documents must be kept available by the author for public inspection for four years from the date of meeting at which the report is considered) Yes ; (please list the documents below) No

• Scottish Planning Policy

• Clackmannanshire Development Plan

• Planning Applications C/97/197 and 06/00427/FULL

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• Retail Impact and Sequential Assessment Report, DPP, July 2010

• Transportation Statement Relating to Proposed Supermarket Use at Sterling Mills Outlet Village, Tillicoultry, Dougal Baillie Associates, May 2011.

• Review of Retail Impact and Sequential Assessment for Proposed Supermarket at Sterling Mills Outlet Village, Tillicoultry, Keppie, May 2011.

Author(s)

NAME DESIGNATION TEL NO / EXTENSION

Keith Johnstone Principal Planner, Extension : 2614 Services to Communities

Approved by

NAME DESIGNATION SIGNATURE

John Gillespie Head of Community & Regulatory Services

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APPENDIX 1 - LIST OF BUSINESS USES RESTRICTED BY SECTION 75 AGREEMENT AT STERLING MILLS OUTLET VILLAGE.

Post Office

Hairdresser

Supermarket/Superstore

Baker

Butcher

Fishmonger

Greengrocer

Newsagent

Delicatessen

Chemist/Pharmacy

Bookmaker

Dental Surgery

Optician

Travel Agent

Estate Agent

Drycleaners

Off Licence

Video Hire

Bank

Building Society

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APPENDIX 3 - SUMMARY OF DEVELOPMENT PLAN POSITION IN RELATION TO THE PROPOSED MODIFICATIONS

1.1 The proposal is to allow an area of 962 square metres net convenience goods floorspace within Unit 4 of the approved extension to Sterling Mills Outlet Village (ref 06/00427/FULL). Unit 4 has a gross floor area (gfa) of 1115 square metres. The proposed size of the food store would fall within the definition of a supermarket, as defined in the Development Plan.

1.2 Clackmannanshire and Stirling Structure Plan

• Policy S1 (Role and Function of Strategic Shopping Centres) - the policy defines the role of Sterling Mills as an out of centre visitor orientated type of shopping distinct from the personal shopping role of Alloa and Stirling town centres and not any other type of shopping including for convenience shopping. It also states that the defined function and role of the shopping centre will be protected through; the restriction of further out of centre shopping except for that specified in Proposal SP2; and by appropriate improvement or redevelopment initiatives. Comment - the proposal would be contrary to objectives of this Policy since it would alter the defined and distinct function of this shopping centre within the network of centres within Clackmannanshire to the detriment of convenience shopping role of the existing town centre.

• Proposal SP2 (New Shopping Provision) - provides support for the extension of the visitor orientated personal shopping at Sterling Mills which meets the criteria in Policy S5. Comment- the proposal does not accord with this Proposal since it would comprise convenience shopping rather than visitor orientated personal shopping.

• Policy S4 (Supermarkets) - supermarket development will only be supported where; it would be commensurate in scale with the size of the community to be served and will not undermine the vitality and viability of the centres; and the development has satisfied the sequential approach favouring town centres then edge of centre sites then out of centre sites. Comment - we have concluded, for the reasons set out in Section 5.4 of the report, that the proposal would not accord with this Policy.

• Policy S5 (Other Shopping Development) - shopping proposals not explicitly planned for within the above policy framework will only be permitted if a number of criteria can be met. These comprise; a sequential approach has been applied demonstrating no suitable alternative sites are available within the town centre; the applicants have demonstrated that the form and design could not be adapted to make it appropriate for town centre or edge of centre sites; the proposal meets an identifiable deficiency in shopping provision; the applicants have demonstrated that development would not undermine the vitality or viability of town centres; it is within an urban area and accessible by public transport; a retail impact assessment has been

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carried out if over 2500 square metres in gfa. Comment - we have concluded, for the reasons set out in Section 5.4 of the report, that the specified criteria have not been met to justify approval as an exception to the Development Plan position.

1.3 Clackmannanshire Local Plan

• Policy JOB6 (New Shopping Provision) - the policy directs retail developments in excess of 1000 square metres gross floor area (gfa) to Alloa Town Centre or an edge of centre site in Alloa if no suitable town centre site exists. The policy directs retail developments below 1000 square metres gfa to Alloa or other town centres in Clackmannanshire as defined by the Local Plan. Retail development on out of centre sites will not be permitted unless it can be demonstrated that no suitable town centre or edge of centre sites exist and the impacts would be acceptable. New shops outside established shopping centres which would significantly detract from the vitality and viability of any town centre will not be permitted. Comment - the proposal would have a minimum gross floor area in excess of the 1000 sqm threshold and would not accord with this Policy. We have concluded, for the reasons set out in Section 5.4 of the report, that the exceptional circumstances set out above have not been satisfied.

• Policy J27 (Sterling Mills Outlet Centre) - the policy covers the Sterling Mills and Sterling Furniture outlets. The Development Guideline provides support for a Phase 2 expansion of personal and household shopping in accordance with Structure Plan Policy S5. The permission for the extension (ref 06/00427/FULL) complies with this policy. Comment - the proposal would be contrary to the terms of this Policy.

1.4 The strategy of the Structure Plan seeks to direct all shopping development to the identified hierarchy of centres as set out in Policy S1. The proposal for a supermarket at Sterling Mills would therefore be contrary to the strategy and Policy S1 as well as Policies JOB6, J27 and Proposal SP2.

1.5 Policies S4 and S5 set out the circumstances where an exception to Development Plan policy framework could be justified. We have concluded that the proposals would not satisfy these circumstances and consequently would be contrary to the Development Plan.

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