Little Stanion developer set to be let off TWO MILLION pound payment toward community facilities in Corby

The developer says it cannot afford to pay the money it promised

Wednesday, 8th July 2020, 7:01 am
Roads and paths in the estate were unfinished for years

Corby councillors will tonight (Wednesday, July 8) be asked for permission to allow a housing developer to ditch a £2m payment it was due to have made to the town pay for community facilities.

JME Developments, which now owns the Little Stanion development after two previous owners went bust, was due to pay Corby Council £2.079m as a contribution toward the extra infrastructure the borough needs to cater for the people that will live there.

But at a virtual development control meeting tonight JME will ask councillors to rip up that agreement because it says it will plunge the scheme further into the red. It also says it cannot provide any affordable housing on the remaining two phases of Little Stanion which will include 189 homes, shops and a community centre.

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The two final phases of Little Stanion in three parcels of land

It cites high build costs and lower-than-projected sale prices of the homes on the estate.

Large housing developments across the country are all subject to Section 106 agreements when they are given planning permission. This means that, in exchange to permission to build, they have to make financial contributions to councils to go toward the subsequent increase in demand for local facilities including cycle lanes, parks, roads, schools, community centres and doctors' surgeries.

Although no detail is included in the report to tonight's meeting, it is thought most of the £2m would have been used to reimburse Northamptonshire County Council for cash it spent building Little Stanion Primary School. Corby Council says NCC has not responded to the request for consultation on tonight's meeting.

The original S106 agreement for Little Stanion, drawn up in 2006, was in excess of £6m to pay for a range of facilities for Corby including primary and secondary education, play areas, public art, a community centre and football pitches on the development.

That was downgraded in 2016 when the then-owner Silentpride said it couldn't afford to make the payments. Instead, the council agreed to take an £11,000 'roof-tax' on each home sold.

But now JME Developments says it cannot afford to pay that and officers at Corby Council agree that the forwarding of payment is unlikely. They will propose to members of the council's development control committee tonight that the firm should be freed of its obligation, and that power to draw up a new agreement is delegated to the council's Head of Planning Iain Smith.

The developer contracted AspinallVerdi to produce its own viability assessment that said that the costs of finishing Little Stanion will be nearly £45m, while the expected income from housing and shop unit sales is just £38.5m - a loss of £6.5m.

The 'costs' factor in a potential profit of £7.7m for JME but accounting for the balance sheet loss of £6.5m, they'd only end up with £1.2m in their pocket.

Their assessment says that if the £2.076 Section106 obligations are ripped up and the £1.34m estimated sale value of the undeveloped land be discounted, JME can still make £5.3m in profit which it says is enough to make the project worth proceeding with.

If the agreement is not reached then the final 189 homes, four shops and, crucially, a developer-funded £800,000 community centre planned for the remaining two phases of Little Stanion may not be completed and the development could stall. The community centre will replace the Welcome Centre that has acted as an ad-hoc village hall for years.

The council contracted-out its own appraisal to White Land Strategies which agreed that the fulfilment of the S106 agreement was not realistic and that the developer's viability assessment is reasonable.

If the value of the houses rises significantly in the future then Corby Council has the option to claw back some of the lost money.

A report to councillors states: "The viability assessment carried out for the council draws the conclusion that it is clear that the viability of the development is suffering due to the combination of values in this location and the costs associated with this development."

The committee members are Councillors Julie Riley (chair) Anthony Dady (vice chair) Jean Addison, Paul Beattie, Anne Brown, Bob Eyles, Lawrence Ferguson, Willie Latta, Matt Reay, David Sims, and Kevin Watt. The meeting begins at 7pm and will be available to watch online.