Issue - meetings

Thos report details progress made by the Project Steering Group, Council and Development Consortium, in consultation with the Residents’ Development Association, to enable the re-development of the Discus Bungalows sites at St Anne’s Court/ Horsman Avenue, Regent Street and Richmond / Faber Street.  It seeks approval to accept a reduced capital receipt on the sale of the land, in view of the current economic downturn.

RESOLVED: (i)         That the contents of the report be noted, and the progress made by the Project Steering Group, Council and Development Consortium, in consultation with the Residents’ Development Association, to enable the re-development of the Discus Bungalows sites at St Anne’s Court / Horsman Avenue, Regent Street and Richmond / Faber Street.

                        (ii)        That Option 1 be approved; namely, to accept the revised capital receipt offered by the Development Consortium and, subject to agreed contractual terms, to continue to work with the Consortium to deliver this exemplar housing regeneration project in York.

REASON:      The revised receipt still represents a highly competitive commercial deal for a phased sale of the Discus Bungalow sites, particularly in the current economic climate, and the development will address the present and future needs of older residents and affordable housing needs in the City.

Members considered a report which detailed progress made by the Project Steering Group, Council and Development Consortium, in consultation with the Residents’ Development Association, to enable the re-development of the Discus Bungalow sites at St Anne’s Court / Horsman Avenue, Regent Street and Richmond / Faber Street.

All ground investigation surveys of the sites had now been satisfactorily completed and the planning applications submitted by the Development Consortium had been approved on 20 November 2008.  The development would offer a total of 196 homes, of which 60 two-bedroom bungalows and a 41 unit extra care facility would replace the existing Discus Bungalows.  Following careful consideration and discussion of the market sale element of the development in the light of the current economic downturn, social grant investment had now been agreed for all 196 homes.  It was anticipated that the contractual terms for the development would be signed by mid-February.  A draft Heads of Terms for the agreement was attached as (exempt) Annex 1 to the report.  Details of evaluations carried out by Property Services on the Development Consortium’s financial appraisal were set out in (exempt) Annexes 2 and 3.

The downturn in the housing market and the ‘credit crunch’ had affected the commercial viability of the project and the Development Consortium had predicted an estimated 11% fall in house prices since their original financial appraisal in 2007.  They were therefore unable to pay the capital receipt originally offered in the selection process.  Details of a revised capital receipt were set out in (exempt) Annex 4 and Members were asked to consider the following options:

Option 1 – accept the revised capital receipt and continue to work with the Consortium.  This would still represent a highly competitive commercial deal.

Option 2 – not accept the revised receipt and re-tender to select a new developer or ask Officers to consider other opportunities to develop the site.

Officers reported at the meeting that the Secretary of State had now granted approval for sale of the sites and that work was expected to begin within the next six weeks.  Members welcomed this news and thanked all those involved in enabling this scheme to progress, in particular, the former Executive Member for Housing Services, Cllr Sue Sunderland.

Having noted the comments of the Shadow Executive on this item, it was

RESOLVED: (i)         That the contents of the report be noted, and the progress made by the Project Steering Group, Council and Development Consortium, in consultation with the Residents’ Development Association, to enable the re-development of the Discus Bungalows sites at St Anne’s Court / Horsman Avenue, Regent Street and Richmond / Faber Street.

                        (ii)        That Option 1 be approved; namely, to accept the revised capital receipt offered by the Development Consortium and, subject to agreed contractual terms, to continue to work with the Consortium to deliver this exemplar housing regeneration project in York. ¹

REASON:      The revised receipt still represents a highly competitive commercial deal for a phased sale of the Discus Bungalow sites, particularly  ...  view the full minutes text for item 174