Agenda item

Granted permission to enter into separate Deed(s) of Variation to vary:

·             the Principal s106 agreement associated with planning application reference 22/2225 (Phase 1) and related Second Deed of Variation to the Principal Deed of Agreement; and

·             the s106 agreement associated with planning application reference 23/2811 (Phase 2).

PROPOSAL

Deed of Variation to Phase 1 and 2 development to secure the following changes:

·                 Alteration of the Late Stage Review mechanisms to require the provision of additional payments in lieu (PiL) upfront towards affordable housing in the local area (instead of a late stage review) within 12 months of material start.

·                 The additional PiL proposed overall is £6m; which will equate to an additional £2.106m for Phase 1, and £3.911m for Phase 2 (n.b. This is in addition to the PiL already secured for the relevant Phase 1(£2.224m) and Phase 2 (£5.34m) developments).

·                 As per the previous Deed(s) of Agreement, the additional PiL proposed to be utilised to fund the provision of additional low-cost rent affordable housing, being affordable housing that is provided that goes beyond the minimum secured through the relevant planning consents for the site(s).

·                 If at any time between a Material Start and Practical Completion of the Development works cease and subsequently no works of construction are carried out on the Land in respect of the Development for a continuous period of at least two (2) years, the agreed Late Stage Review mechanisms are retriggered.

RECOMMENDATION

(1)            That the Planning Committee resolves to enter into separate Deed(s) of Variation under Section 106A of the Planning Act to vary:

              (i)                the Principal Section 106 agreement associated with planning application reference 22/2225 (‘Phase 1’) and related Second Deed of Variation dated 25th April 2024 to the Principal Deed of Agreement dated 3rd May 2023.

             (ii)                the Section 106 agreement associated with planning application reference 23/2811 (‘Phase 2’) and.

(2)      To delegate authority to the Head of Planning and Development to agree the wording of the respective Deed(s) of Variation.

(3)      The separate Deed(s) of Variation sought for Phase 1 and Phase 2 would secure changes to the obligations secured already through legal agreements, to amend the Late Stage Review mechanisms, and to require the provision of additional PiL payment of £6m upfront; equating to £2.106m for Phase 1 and £3.911m for Phase 2 (indexed from date of committee resolution) towards the provision of additional low-cost rented affordable housing (within Use Class C3) within the local area.

Gary Murphy (Principal Planning Officer) introduced the report, stating that the application was seeking approval to vary the existing permission in relation to the development to provide an upfront fixed contribution of £2.1m (Phase 1) and £3.9m (Phase 2) in lieu of the late-stage review mechanism included within the original planning permission.  This would be in addition to the financial contributions already secured with the amendment being sought designed to enable the applicant to secure beneficial lending terms providing construction was to commence within 24 months.  In response to clarification requested by the Committee, officers confirmed that the proposed payments had been subject to a viability assessment with planning permission already granted for the overall development which had included a late-stage review mechanism designed to secure additional contributions towards affordable housing should scheme viability improve, which remained uncertain.

The Chair thanked Gary Murphy for introducing the report and subsequently invited Steve Harrington (as the applicants’ representative) to address the Committee.

The following key points were highlighted:

·                 Despite current economic challenges work had now commenced on site at Wembley High Rd for Phase 1 and Phase 2.  Whilst there were two separate planning permissions, the developments were being brought forward as one project in terms of both construction and also funding.

·                 In the process of formalising the funding position for the project the removal of the late-stage review mechanisms and provision of additional payments  in lieu upfront were felt to represent the optimum solution for both the applicant and Council as it would provide certainty at this stage of the total affordable contributions to be provided and would secure the deliverability of the project going forward.

·                 The additional sum (£6m) proposed towards affordable housing as a payment in lieu had been subject to a rigorous independent viability assessment process which had concluded that an additional payment of this amount was unlikely to be realised through the late stage reviews and as such would maximise the contribution towards affordable housing from the project.

·                 The project to date had secured more than £7.5m towards affordable housing contributions and with the additional £6m now proposed, would take the overall contribution to over £13.5m

The Chair thanked Steve Harrington for addressing the Committee and invited members to ask any questions they had in relation to the information presented with the following noted.

·             In response to further clarification being sought on the basis for the proposed variation at this stage in the scheme, the Committee were advised that this related to the applicant having been required to provide less equity at the outset as the funder’s future financial exposure would be reduced at the back end of the project.  This has consequently resulted in a reduced cost of borrowing enabling the savings arising from reduced interest payments to be passed on to the Council through the proposed additional payments in lieu, providing what was felt to be a significant benefit to all concerned through the generation of additional funding (which had been subject to a viability based assessment) becoming available at this stage for the delivery of affordable housing as opposed to servicing bank interest payments.

The Chair thanked Steve Harrington for responding to the Committee’s queries and then moved on to offer the Committee the opportunity to ask the officers any remaining questions or points of clarity in relation to the application.  Issues raised included the assessment of scheme viability and use of funding contributions, with the following responses noted.

·                 Confirmation was provided that the payments proposed in lieu of the late-stage review mechanism had been robustly tested by consultants acting for the Council and assessed as representing the maximum viable contribution.  Whilst reducing risk and exposure for the applicant, the proposals were felt to also offer greater benefit to the Council as it was considered that even in the event of the late stage reviews being triggered for Phase 1 and 2 these would be unlikely to provide additional payments in excess of the proposed £6m currently being offered in lieu

·                 In terms of use of the additional contribution being focussed on the delivery of affordable housing within the local area, members were advised this would be subject to the standard process of prioritisation focussed across the borough as a whole although enabling early delivery of the two phases was expected to assist in bringing forward wider regeneration in that part of the Wembley Growth Area.

As there were no further questions from members the Chair then moved on to the vote.

DECISION

RESOLVED to granted permission to enter into separate Deed(s) of Variation to vary:

·                 the Principal s106 agreement associated with planning application reference 22/2225 (Phase 1) and related Second Deed of Variation to the Principal Deed of Agreement; and

·                 the s106 agreement associated with planning application reference 23/2811 (Phase 2).

(Voting on the above decision was unanimous).