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Invitation to Tender Guidance Document Land at Ash Bank Road, Werrington, Staffordshire Moorlands SR9 ODX Submission Deadline: 1.00pm 4th December 2020 Tender Ref No: D21025
OFFICIAL HOMES ENGLAND
Contents Section 1: Introduction ...... 3 Section 2: The Site ...... 4 Section 3: Terms of Offer & Contracting ...... 5 Section 4: Homes England Objectives ...... 6 Section 5: Developer Responsibilities ...... 6 Section 6: Tender Submission Guide ...... 8 Section 7 – Evaluation of Bids ...... 8 Section 8 – Bid Submission Instructions ...... 10 Section 9 – Contact Details ...... 11
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Development of Homes England Land at: Ash Bank Road, Werrington, Staffordshire Moorlands ST9 0DX
Tender Ref: D21025
Section 1: Introduction This Invitation to Tender (ITT) has been prepared to provide guidance and information to interested bidders in respect of Homes England’s 4.31 ha (10.68 acres) site located at Ash Bank Road, Werrington, Staffordshire Moorlands, ST9 ODX (referred to throughout this ITT as Land at Ash Bank Road.
It is Homes England intention to appoint a single preferred development partner for this opportunity following the evaluation of tenders realised from this ITT process.
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Once you have read the information provided in this ITT and reviewed the supporting technical pack that accompanies this opportunity, you are invited to populate the bidding template provided at Appendix 1 to outline the terms of your offer.
The ITT process is being managed on Homes England behalf by Avison Young. All queries should be directed through them via the contact details provided later in this document.
Section 2: The Site Key points of note concerning the site / project are detailed below:
• Offers are invited subject to the purchaser securing full unchallenged planning approval • Site area extending to circa 4.31 ha (10.68 acres) gross, made up of 3 parcels. The parcels offer amenity / open space which could be beneficial for biodiversity net gain purposes • Predominantly former MOJ owned farmland • Part freehold (title absolute) and part long leasehold (good title) • Existing shared access from the A52 Ash Bank Road • LPA support for an indicative density of 78 dwellings across an indicative 2.38 ha (5.88 acre) net site area • Residential Allocation in the recently adopted Local Plan for 75 dwellings • Situated approximately 6km east of Stoke-on-Trent town centre
Constraints
• Potential abnormal costs associated with earthworks (cut and fill) in respect of the topography of the site. A full suite of technical documents is provided for potential purchasers to review. • Existing access into the site from the A52 will be shared with the adjoining operational MoJ owned Werrington YOI. A transport assessment has been undertaken and is included within the technical pack. • The site is being sold on a part freehold and part long leasehold basis. The title for both parts will have restrictions which prevent ground rents being charged. • Uncertainty exists on the identity of the owner of the freehold interest on which the long leasehold interest is in place. Homes England will obtain Title Indemnity Insurance to protect the purchaser against any potential future liabilities to the freeholder. • Help to Buy will not be available on the leasehold part of the site.
Technical Pack
The Technical Pack includes the following documents:
• Disposal plan • Capacity Proving Plan • Freehold and long leasehold Title Plans
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• Drainage and flood risk surveys (November 2020) • Archaeological Evaluation (June 2019) • Archaeological Evaluation Acceptability Confirmation email (Sept 2019) • Health and Safety File – Demolition (November 2019) • Preliminary Ecological Appraisal (October 2020) • Protected Species Report (October 2020) • Phase 1 Geo-environmental Desk Study (October 2020) • Phase 2 Geo-environmental Interpretive Report (October 2020) • Noise Impact Assessment (October 2020) • Utilities Statement (October 2020) • Tree Report (October 2018) • A topographical survey 3D (in CAD format) • Transport Assessment (November 2020) • Flood Risk Assessment (October 2020) • A Report on Title (November 2020) • Pre-Application Meeting Notes (March 2020) • Local Plan Hearing Statement (January 2020) • Sale Agreement • Invitation to Tender Guidance Document • ITT Tender Submission Document
Bidders should note that certain trees identified within the Tree Report referred to above have been felled. The buildings and raised pond referred to within the Ecological Appraisal as being present on site have also been demolished.
The developer will need to carry out their own searches over and above the information contained within the Report on Title which is being made available
The above information is available to download by registering on the site specific data site at http://ashbank.avisonyoung.co.uk/
Section 3: Terms of Offer & Contracting Homes England is inviting conditional offers subject to the purchaser securing full unchallenged planning approval. The scheme will need to achieve Building for Healthy Lives standards, a positive biodiversity net gain assessment and deliver policy compliant affordable housing provision.
Once offers have been received a decision will be made as to which is the most commercially favourable for Homes England.
The conditional sale will require the developer to pay a 10% deposit upon exchange of the agreement. The agreement will define both the conditions that must be discharged and a long stop date by which the developer must discharge these conditions.
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If the developer can evidence that they have taken all action within their control to discharge the conditions set out in the conditional agreement – however matters outside their influence have resulted in the conditions not being discharged by the longstop date, then the deposit will be refundable. By contrast, if the developer does not use their reasonable endeavours to discharge the conditions set out in the conditional agreement by the longstop date, then the deposit will not be refunded.
Upon discharge of the conditions, the developer will be compelled under the agreement to complete the freehold and long leasehold transfer.
Land value offers are invited subject to full payment on completion and/or subject to clearly defined deferred payment terms. Should deferred payment terms be agreed, charges will be placed on the titles as security.
Homes England will apply planning overage to the conditional sale in order that it shares the benefit of any uplift in value associated with development coverage gains on a 50/50 basis.
As detailed within the Tender Submission Form The preferred developer will be subject to financial checks and will be required to provide information as requested by Homes England. If they do not pass the financial checks their bid will not be accepted.
Section 4: Homes England Objectives Homes England’s objectives from this disposal exercise are as follows:
• To achieve the best land value possible from the site
• For proposals to come forward that are fully compliant with local planning policy and which would be capable of securing planning consent in the shortest timescale possible
• On any scheme delivered, the delivery of policy compliant affordable housing provision and delivery of all required Section 106 Agreement obligations
• For the scheme to demonstrate high standards of design embedding Building for Healthy Lives standards and biodiversity net gain
• Ground rents will not be capable of being charged on the long leasehold element of the site.
Section 5: Developer Responsibilities The following section sets out the services that Homes England’s selected development partner would be required to perform.
• To pay the agreed land value premium in full
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• In circumstances where Homes England has accepted an offer that is to be paid on deferred terms, the bidder must 1) provide a means of security (by way of charge or other security acceptable to Homes England) to secure the outstanding payment(s) and 2) must complete all staged payments in full by the earlier of i) the mid point of the construction programme (in time) or ii) the mid point of your sales programme (by volume of sales)
• The bidder must seek to discharge all conditions in the shortest timeframe possible – and by an absolute longstop date as set out in the conditional sale agreement
• Where applicable, to secure all necessary planning consents and building regulation approvals in respect of their scheme – and discharge all associated conditions that might be applied to these consents
• Where applicable, discharge payment of the scheme’s agreed S106 cost
• Pay all SDLT costs owed in accordance with HMRC requirements
It should be noted that the site is Opted to Tax – meaning VAT is payable against the purchase price tendered. Under certain qualifying circumstances, it may be possible for you to request that Homes England dis-applies VAT against the site (for example, if you are a Registered Provider). If you intend to do this, you must make this intention clear within your tender submission – along with the rationale that makes your organisation eligible for dis-applying VAT.
PLEASE NOTE: In the event that you have a legitimate claim to dis-apply VAT, Homes England would be required to repay all VAT it has claimed associated with its past spend against the site. Since this would be a non-recoverable cost to Homes England – the cost of the VAT that Homes England would be forced to repay to HMRC would be netted off your financial offer.
• Raise the level of finance required to cover the scheme’s peak funding requirement – and arrange any credit lines that may be needed to meet cost overruns / cash flow shortfalls
• In respect of the affordable housing elements of any scheme to be delivered, it will be the developer’s responsibility to identify and work with an RP partner to take on responsibility for these tenures
• Upon transfer of the freehold and long leasehold interests, coordinate effective management of the site and discharge all statutory health and safety duties
• Do not include ground rents as part of their sales / revenue strategy across the freehold element of the scheme (unless where demonstrated as absolutely necessary in connection with flatted accommodation)
Section 6: Tender Submission Guide For a tender submission to qualify as being compliant, bidders must submit the following suite of information:
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1. A fully populated version of the bidding template provided at Appendix 1
2. A colour layout plan(s) for your scheme which is drawn to scale
3. If available, drawings / images of the house types you would propose to include in your scheme (please note, this information is preferable, however not mandatory)
4. A development appraisal demonstrating sums which are consistent with the costs, values and land value, as set out in the bidding template form
5. Evidence of the sources of seed capital / equity and loan funding that you will draw from to fund your development, together with details of how any cost overruns would be funded. Please note, you do not need to provide evidence of your loan funding if you are seeking loan funding support from the Homes England administered Home Building Fund
6. Evidence of your past track record for delivery and examples of schemes of an equivalent / larger scale that you have developed. Specifically, please provide a short narrative on the history of your organisation, the overall scale of development your organisation has been responsible for delivering, the expertise and experience of your project delivery team and a case study / case studies of your previous developments
7. A programme / timetable for your scheme in Gantt chart format – covering the pre-construction, construction and sales phases of the project
Section 7 – Evaluation of Bids The formal bid evaluation process will involve:
• Determination of each bidder’s tender submission against prescribed pass / fail criteria • Assessment of the most commercially favourable land value offers
Pass / Fail Criteria
Bidders must achieve a ‘pass’ against Homes England assessment of the following themes for their bid to be determined as eligible / compliant:
• The bidder must fully populate the bidding template provided at Appendix 1 • The bidder must submit an A3 colour layout of their scheme layout • The bidder must submit a development appraisal with costs, values and land values corresponding to the input provided in the bidding template at Appendix 1 • The bidder must provide evidence of funding support • The bidder must provide evidence of their company track record and expertise of their personnel • The bidder must provide a Gantt chart format delivery programme • The bidder must confirm that they agree to achieve 8 out of 12 passes on a self-assessment of Building for Healthy Lives, as approved by Homes England.
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• The bidder must confirm that they agree that their proposal and planning application will achieve at least 10% biodiversity net gain as approved by Homes England. • The bidder must confirm that they agree to the whole planning application being approved by HE prior to submission. • The bidder must submit their tender by the tender close date described in the document • The bidder must submit their tender in accordance with the submission instructions described in this document
At Homes England’s discretion, we may seek to engage in a clarification process with bidders if further information is required or else we are not satisfied with the response provided.
For example, we may seek to engage in clarifications if we are not satisfied by the accuracy of your abnormal cost appraisal, your suggested approach to securing a planning consent or the evidence of your sources of funding.
If, following the outcome of this clarification process, we continue to have concerns in respect of the robustness of any areas of your bid – you will be scored a ‘fail’ and your bid will not be considered further.
Homes England’s decision in this regard is final. By submitting a tender, bidders are recognised as being in acceptance of this principle.
Land Value Assessment
Only bid submissions that have achieved a ‘pass’ in line with all of the criteria set out above will have their land value offer evaluated.
Land value offers are invited subject to full payment on completion and/or subject to clearly defined deferred payment terms.
Recognising that some bidders may have elected to bid on deferred payment terms, Homes England will seek to equalise all offers by calculating the NPV of each offer based on a 3.7% discount factor rate and using the date on which this bid competition closes as the base date for calculations.
The highest unique (NPV adjusted) land value offer would be treated as the ‘best offer’ against the unconditional land value assessment.
Following this, Homes England will assess the ‘conditional’ offers submitted by bidders. As with the unconditional offers, the conditional land value offers will be subjected to an NPV adjustment.
The highest unique (NPV adjusted) land value offer would be treated as the ‘best offer’ against the conditional land value assessment.
Once the best NPV adjusted conditional offer and best NPV adjusted unconditional offer have been determined, Homes England will determine which of the two forms of offer are the most commercially preferable.
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This will involve Homes England taking account of the timescale and likelihood of the developer who has the best conditional offer successfully being able to discharge all of their requested conditions. Alongside this, Homes England will consider the time input and expense to the Agency associated with retaining management control of the site whilst the developer seeks to discharge their conditions.
On reflection of these points, Homes England will determine which offer is the most commercially advantageous.
In this regard, please note that Homes England would not necessarily be bound into accepting the highest offer.
Bidders should also note that any offers in respect of overage will not be accounted for in the land value assessment process.
Homes England’s decision in this regard is final. By submitting a tender, bidders are recognised as being in acceptance of this principle.
Bidders should note that once a bid has been accepted, there will be no deductions negotiated for unforeseen planning obligations. In this respect the LPA advised in response to the formal pre-application request submitted by Homes England that in addition to Affordable Housing at 33% there would be contributions to Education, and for off-site play. The current formula for play contributions is as follows:- Play - £517.72 per bedroom and Playing Pitches - £646.02 per bedroom. Parties must satisfy themselves in respect of the Section 106 obligations applicable to the site and the development proposed.
Bidders should also note that any AHP assumptions are at the bidder’s risk and grant funding will not be part of the assessment of land value.
Section 8 – Bid Submission Instructions The bid deadline for this site opportunity is 1.00pm, Friday 4th December 2020.
Bids must be submitted in an electronic format to the following email address:
Under no circumstances should bidders submit their tenders to an alternative email address (for the avoidance of doubt, this includes the Homes England project manager and the site’s agent)
This is to ensure that all submissions are dealt with in an equal, fair and legally compliant way. Tender submissions will only be accessed after the agreed deadline has passed by Homes England’s Central Procurement Team – who will convene a Tender Opening Panel as part of the process of opening each tender submission received, and which will ensure that the opening of tenders are independently witnessed.
Your emailed submission should include the following reference in the title field:
Tender Ref: D21025 Land at Ash Bank Road, Werrington, Staffordshire ST9 0DX
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Bids submitted late, or not following the procedures set out above, will be deemed as non-compliant and the tender submission will not be included in the evaluation process.
Section 9 – Contact Details Should bidders wish to seek clarity on any aspect of this opportunity or ITT, then queries should be directed through to Homes England’s appointed agents, as follows:
Andrew Moss BSc (Hons) MRICS Principal [email protected] 07836 207619
Charles Davis MSc MRICS Senior Surveyor [email protected] 07775706389
Date
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[email protected] 0300 1234 500 gov.uk/homes-england
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