Report of the Strategic Director (Growth and Development) attached

The Executive considered a report of the Strategic Director (Growth and Development), which provided a high level summary of the second Development Area Business Plan for the Victoria North programme, which was being taken forward by the City Council operating in a Joint Venture Partnership with Far East Consortium (FEC).  The report also provided an update on the current position with regards to the Housing Infrastructure Fund (HIF) grant allocation of £51.6m that had been provided to the Council by Homes England for the delivery of core infrastructure works which would unlock a development platform for up to 5,500 homes in the New Town and Red Bank neighbourhoods in Cheetham Ward

The Executive Member for Housing and Development reported that following the refresh of the Strategic Business Plan, FEC have now brought forward the next formal Development Area Business Plan in line with the governance arrangements established at the outset of the partnership.  The entire Development Area site extends to circa 7 acres and was bounded by Dantzic Street, Dalton Street and the Trans-Pennine Rail / Metrolink Viaduct.  Other than a small parcel of land for which the Council had freehold ownership, FEC had acquired the freehold or long-leasehold ownership of the majority of land that the Development Area would utilise. This had been made possible through negotiation with landowners where they have been identified.  There were however, a number of parcels of land, that were either unregistered, with no known legal owner, or where FEC had only been able to register “possessory title” meaning that there was insufficient documentation to register absolute title. Without contact information available for the unregistered parcels of land, FEC had been unable to identify or contact owners to acquire the land through negotiation.  This presented a risk to the delivery of the scheme covered by the DABP2 and as such a proposed approach to mitigate against this would see the Council making a Compulsory Purchase Order for the parcels of land.

It was also reported that as part of the proposal an affordable housing contribution of 5% has been secured through the formal Planning process, however FEC would work with their panel of Registered Providers with the aim to increase affordable housing to deliver a 20% provision outside of the confines of the s106 which will allow access to grant funding from Homes England

In relation to the HIF, it was reported that since its commencement a number of packages of work had been completed.  However, as with many current construction projects, the programme had experienced a number of delays and impacts from the pandemic, cost inflation and labour and supply chain instability as well as previously unidentified contamination being found onsite. In addition, the Council and appointed contractors would be unable to prosecute in-channel flood resilience measures as originally envisaged within the project programme. This would result in on-plot solutions being required that would materially increase project delivery costs for residential development schemes as they came forward in the future. As a consequence of these unforeseen issues, the Council had been in a position of General Default against the terms of the GDA.  The intention was that, subject to Homes England approval, a variation to the GDA would be entered into, including a new cashflow, and extended programme milestone events and end date for eligible expenditure.  Homes England had confirmed their in-principle approval of variations sought by the Council and had instructed Solicitors to draft a Deed of Variation to the GDA.

Decisions

The Executive:-

(1)      Note the summarised content of the second Development Area Business Plan which will focus on the delivery of 1,551 homes at Dantzic Street and delegate authority to the Chief Executive in consultation with the Deputy Leader and the Executive Member for Housing and Development to approve the detailed Development Area Business Plan in conjunction with FEC.

(2)      Delegate authority to the Strategic Director (Growth and Development) and the Deputy Chief Executive and City Treasurer to finalise terms for the disposal of the Council’s land interests within the Development Area Business Plan and to agree any adjustments to the Joint Venture partnership documentation that helps secure the Council’s objectives and facilitates the delivery of the Development Area Business Plan.

(3)      Note the historically complex nature of land interests acquired by FEC and that a separate report on the agenda sets out a proposal to use Compulsory Purchase Powers to ensure the delivery of the Development Area Business Plan.

(4)      Note that Council Officers are currently negotiating with Homes England to secure some adjustments to the approved Housing Infrastructure Fund grant funded programme which will facilitate delivery of the Development Area Business Plan and delegate authority to the Strategic Director (Growth and Development) and Deputy Chief Executive and City Treasurer to finalise the terms of a Deed of Variation to the existing Grant Determination Agreement to reflect agreed adjustments.

(5)      Authorise the City Solicitor to enter into and complete all necessary documents to give effect to the recommendations set out in this report.