DRAFT ITEM NO:C5(d)

DECISION - MAKER: CABINET MEMBER FOR RESOURCES DATE OF DECISION: 26 SEPTEMBER 2005 SUBJECT: DISPOSAL OF SITES AT CORNER OF VALLEY ROAD AND EARLS ROAD, . REPORT OF: HEAD OF PROPERTY SERVICES AUTHOR AND CONTACT DAVID REECE - Tel: 023 8083 2796 DETAILS: Email [email protected] EXECUTIVE DIRECTOR CAROLYN WILLIAMSON Tel: 023 8083 2478 CONTACT DETAILS Email [email protected]

A. RECOMMENDATIONS

1. That approval is given to enter into negotiations with the SEEDA Brownfield Land Assembly Trust for the disposal of the Council’s two surplus sites at 27-45, and 47A Road, and to report back provisionally agreed terms to Cabinet.

2. That if terms cannot be agreed, approval is given to the disposal of both sites on the open market, and to report back all offers to Cabinet.

B. REASONS FOR REPORT RECOMMENDATIONS

Disposal to the SEEDA Brownfield Land Assembly Trust (BLAT) will enable both sites to be cleaned up and sold on to Housing Society promoting regeneration of the area in line with the former SRB objectives.

Previous extensive one-to-one negotiations with (successively) Swaythling Housing Society, Doctors Surgery / PCT, and the Gurdwara Nanaksar have failed to reach satisfactory conclusions.

If detailed terms cannot be agreed with BLAT, the next best opportunity for the disposal is to place the sites on the open market.

C. ALTERNATIVE OPTIONS CONSIDERED AND REJECTED

• Retain 27-45 Bevois Valley Road (BVR) in its vacant state and continue the current programme of eradication of the invasive Japanese Knotweed plant by spraying. This would be likely to contribute nothing to the regeneration of the area and would delay the potential for obtaining a capital receipt by many years.

• Use the sites for Council's own use. There is no identified demand and the existing car park on part of 27-45 BVR is contrary to policy.

• Retain 47A BVR in its vacant state. The Council would be burdened by the liability for potential migration of contamination on to adjoining sites. This would contribute nothing to the regeneration of the area and would delay the potential for obtaining a capital receipt.

• Sell direct to Swaythling Housing Society to develop new affordable

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housing subject to an agreed share of future liabilities for contamination. This introduces too many uncertainties and is highly unlikely to be viable for the Council with a negative consideration likely. SEEDA’s involvement would eliminate the uncertainties over contamination.

• Let no. 47A to the motor trade for say 10 years whilst taking the lead on managing the decontamination of the site. This would be prohibitively expensive for the Council (estimated in the region of £100,000) and exclude the potential for rebuilding the MoT workshop. It is unlikely to contribute towards regeneration of the area.

• Clean up both sites at SCC's cost (estimated over £250,000 including knotweed disposal) and then dispose of on the open market. This will be prohibitively expensive for the Council to pay up front.

D. WARDS /COMMUNITIES AFFECTED:

The sites are located within Bevois Ward.

SUMMARY

1. This report seeks Cabinet Member approval for disposing of the sites of 27-45, and 47A Bevois Valley Road to the SEEDA Brownfield Land Assembly Trust to promote the continued regeneration of the locality. If detailed terms cannot be agreed, the report seeks further approval to place the sites on the open market for an unconditional sale.

2. Exhaustive previous exclusive negotiations with interested parties have failed to achieve disposal. Offering both sites to BLAT is the best means of achieving a capital receipt and regeneration.

BACKGROUND & REPORT DETAILS

3. The two prominent sites are the last areas of undeveloped / derelict land on the west side of the Bevois Valley Corridor route on either side of the corner of Earls Road (see plan in the Appendix). The land was formerly included within the area of the SRB and Council-funded Bevois Valley Improvement programme which has been successful in promoting the comprehensive regeneration of the area. 27 - 45 BVR measures 1300 sq m. (0.324 ac.), and 47A BVR measures 315 m2 or 0.078 acres.

4. In October 2003 the Cabinet Member for Corporate Services authorised officers to enter into negotiations for the potential disposal of the freehold land at 27-45 BVR to the owners of the adjacent Gurdwara Nanaksar. The Gurdwara failed to obtain planning permission for their desired mixed-use development and have not submitted a satisfactory business plan as had been requested. Gurdwara has offered to buy the freehold for car parking use only which cannot be recommended, as such exclusive use is contrary to the Council’s policies to discourage use of the motorcar in areas of high accessibility.

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5. Previously on the same site the Council entered into abortive negotiations with a Doctor’s Surgery in partnership with the Primary Care Trust, and Swaythling Housing Society. Both parties withdrew their interest after failing to find viable solutions to developing the sites owing to abnormal development costs arising from the eradication of the invasive Japanese Knotweed and the levelling of the steeply sloping site.

6. 47A BVR was until recently occupied by a tenant operating an MoT workshop. The tenant has vacated but the site has significant petroleum hydrocarbon contamination, probably as the consequence of petrol spillage, leakage or disposal from both the garage repair workshop and the previous petrol filling station which closed in the 1980s.

7. Back in 2000, the former Executive Member for Corporate Management delegated power to the Head of Property Services to agree terms for the sale of no. 47A to Swaythling Housing Society to develop new affordable housing.

8. Swaythling Housing Society was granted planning consent for 5 flats and has also been allocated Housing Corporation grant funding to facilitate the development of the units for affordable housing. For this reason they still wish to purchase the site but at nominal consideration, and provided that the Council additionally accepts a share of the potentially high costs of decontaminating the site. However the amount of Housing Corporation funding is insufficient to secure viable development of 47A BVR.

DISPOSAL OF THE SITES

9. A favoured option for the disposal of the sites is through a new initiative from SEEDA called the Brownfield Land Assembly Trust (BLAT). Its objective is to identify and acquire small, derelict sites in urban regeneration areas for recycling into the social housing land market. Such sites are likely to have specific development cost constraints, which means that they are not deliverable by Housing Associations or developers by conventional methods in the residential market. Both sites fit the model and SEEDA has confirmed a keen interest in acquiring them.

10. Initial indications are that BLAT will be able to offer a nominal sum for 47A and less than £100,000 for 27 - 45 BVR. These figures have regard to the significant abnormal development costs arising from site contamination and steep relief, and reflect the market value for the land.

BLAT is currently evaluating the costs of delivering decontaminated sites ready for development and intends making formal offers for the sites. BLAT is in preliminary discussions with Swaythling Housing Society about a potential forward sale for development of affordable housing.

11. If detailed terms cannot be agreed with BLAT, placing the sites on the open market may reveal genuine interest from any private sector residential developers who might be better placed than housing associations to overcome the abnormal costs and physical constraints of developing the land.

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12. If the sites are sold on the open market, there are two options for their disposal.

a) Building Agreement:

Advantages: it would allow the Council to exercise control over the form and timing of new development which could contribute to the regeneration of the area. Capital receipt could be higher than through unconditional sale.

Disadvantages: A Building Agreement may limit the market for such small sites and would increase the likelihood of abortive sales for both sites. A capital receipt could take much longer to achieve.

b) Unconditional Sale:

Advantages: Maximises interest in the site on the open market and reduces significantly the likelihood of an abortive sale. The Council would not bear the costs of liability for the site contamination. A capital receipt is likely to be achieved more quickly.

Disadvantages: The sites though sold, could remain a vacant eyesore for an indefinite period, as there is no guarantee redevelopment would take place. A capital receipt would be potentially smaller than with a Building Agreement.

Given the previous protracted and abortive disposal negotiations, the particular difficulties in achieving viable development, and the priority to secure disposal, it is recommended that an open market disposal should be by way of option b), unconditional sale. Separate offers may be considered for each site.

PLANNING IMPLICATIONS

13. Planning Policy: The existing Local Plan allocation for 27-45 BVR is housing. Planning permission will only be granted where development provides no more car parking than the Local Plan maximum standards. Reduced parking in this area of high accessibility is encouraged to help reduce traffic congestion.

14. 47A Bevois Valley Road is also currently allocated for housing and has the benefit of full planning consent for a scheme of 5 flats obtained by Swaythling Housing Society.

POLICY FRAMEWORK IMPLICATIONS

15. The development of 47A Bevois Valley Road for affordable housing would contribute towards the Housing Strategy priority to meet the need for affordable housing in the City as well as contributing to the targets within the Medium Term Plan & City Performance Plan. Disposal on the open market will not necessarily meet these objectives. Income from the investment portfolio forms part of the Councils revenue income, which is included in the Medium Term Plan.

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LEGAL IMPLICATIONS

16. The Earls Road long stay car park is subject to a car parking order under the Road Traffic Regulation Act 1984. There are well-established procedures under the Act for lifting the current car parking order involving consultations and advertising. In the event of objections, the Council’s Appeals Panel would make a final decision. If the order is lifted, disposal could then proceed under Local Government Act 1972 powers.

17. The open space land at 27-45 BVR is held under the Local Government (Miscellaneous Provisions) Act 1976 but is no longer used for open space purposes. The land may be appropriated to and disposed of under Local Government Act 1972 powers.

FINANCIAL IMPLICATIONS

18. Both sites are General Fund properties; their disposal would generate a 100% usable capital receipt, which will be taken into account as part of the overall exercise of preparing the Capital Programme.

On balance it is considered that the quick receipt of capital is financially better than retaining the low income from the advertising hoardings, and incurring the costs of treating the knotweed and securing 47A BVR against trespass. There is no car park income derived from the free 24 hour car park. As income is low with little prospects of growth, the disposal can be recommended on financial grounds.

If marketed on the open market, provision for the cost of in-house marketing plus advertising, estimated at £1500, would need to be made from the proceeds of sale.

CONSULTATION AND CONCLUSIONS

19. Council’s Parking Manager: would support the closure of the Earls Road long stay car park as the car park has a small number of spaces and would be expensive to bring it up to an acceptable standard. The loss of the spaces is offset by on-street spaces already created opposite, adjacent to shops.

20. The Head of Leisure Culture and Tourism: has no objection to the disposal of the open space land which is no longer used for amenity purposes.

21. The Council’s Ecologist: Although it is one of few open spaces in Bevois Valley, the nature conservation value of the site, based on current records, is not sufficient to warrant objection to development.

22. Housing Enabling Team: Would support the BLAT initiative with onward disposal of 47A BVR to Swaythling Housing Society, to retain the social housing grant funding allocated by the Housing Corporation to this scheme, to implement the current planning consent and deliver additional affordable homes in the city to meet local needs.

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23. Neighbourhood Renewal Team: Would support the BLAT proposal as it will enable the regeneration of this derelict site and continue the rejuvenation of the Bevois Valley area.

24. Environmental Services: Voluntary remediation is recognised by central government as being the most effective way to deal with land contamination as far as costs to the taxpayer is concerned.

Appendices: Appendix - PLAN Documents in Members Rooms None BACKGROUND PAPERS - None

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APPENDIX PLAN

A

27 - 45

NTS

Land at 27 to 47A Bevois Valley

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