Report of the Strategic Director (Growth and Development) attached

The Executive considered a report of the Strategic Director (Growth and Development), which provided an update on the advancement of This City, the successful application for £10m of brownfield grant funding and the opportunity to scale up the delivery of around 1500 new low carbon, mixed tenure homes.  The report also sought approval to progress procurement of a private sector funding partner based on the conclusions of a comprehensive market testing exercise which had assessed the merits of potential investment and delivery partnership models.

The Executive Member for Housing and Development advised that the purpose of This City was to act as a commercial entity, capable of delivering much needed Manchester affordable rent housing to the people of Manchester.  The objectives of This City aligned with the Our Manchester Strategy 2016-2025 as well as the recently refreshed Housing Strategy (2022-2032).

Phase 2 of the original Business Plan (as approved by the Executive in December 2021) envisaged procurement of an investor partner to scale up funding to enable the delivery of a larger scale of new homes and to lessen the requirements of Council financial risk – particularly in relation to borrowing via Public Works Loan Board.  Soft market testing had confirmed that there was interest from the market to invest capital into the residential Private Rented Sector and appetite to fund the delivery at scale of the This City Phase 2 pipeline.  Any financial proposal, land transaction and commercial arrangements would be subject to approval by the Executive at a later date following the conclusion of negotiations with the preferred partner.

Given the timescales required to comply with the Brownfield Land Funding conditions and in parallel with the negotiations to find a preferred partner, site investigations and preliminary design works needed to begin during Spring 2024.

It was estimated that a budget of £0.75m would be required for this work, to develop all of the potential schemes through the initial stages to RIBA stage 1 design.  This work would support the discussions with the ultimate partner on the sites, and the site investigation works would be required by the Council to support any development on the sites, not just the This City proposals.  The intention would be that the works would form part of the Council’s investment into the final delivery vehicle for the sites.

It was also proposed to broaden the use of the existing £2.4m budget allocated to initial works on the Postal St site, approved by Executive in September 2022, to cover all the initial phase 2 sites and therefore enable it to be used for the site investigations and preliminary design work.

Through the development of the This City proposition and refinement of the business case, a number of key risks had been highlighted, and a mitigations tracker has been developed.

Councillor I Robinson (Ancoats and Beswick Ward) commented on the progress of construction of the homes at Rodney Street and the positive impact these will have for the area once completed and with people living in them.  She also welcomed the proposals surrounding the regeneration of Grey Mare Lane.

Decisions:-

The Executive:-

(1)      Note the progress made to deliver the aspirations of This City to ensure a pipeline of viable mixed tenure homes.

(2)      Approve the proposal to undertake a competitive process to secure an investment partner to accelerate the delivery of the pipeline of low carbon mixed tenure homes.

(3)      Delegate authority to Strategic Director (Growth and Development) in consultation with the Executive Member for Housing and Development to finalise the selection and appointment process of the investment partner.

(4)      Delegate authority to Strategic Director (Growth and Development) to negotiate and agree the detailed terms of the contractual, commercial and ancillary arrangements between the Council and the investment partner with the outcome of the process and final terms to be reported to a future meeting for approval

(5)      Delegate authority to the City Solicitor to do all things necessary or incidental to give effect to the recommendations as set out in this report.