Agenda item

Report of the Executive Director of Growth, Planning and Housing and the Executive Director of Finance and Resources

8.1       Barbara Brownlee, Executive Director for Growth, Planning and Housing, presented the report. She explained that the Luton Street development is the first major housing development scheme forming part of the Church Street Regeneration Programme. It proposes to deliver 168 residential units of which 59 will be affordable housing.

8.2       Barbara Brownlee then outlined the scheme background including the vehicle for its delivery. She explained that in December 2014 the Council awarded the Developer Bouygues Development UK (BYUK) preferred bidder status as developer for the development of the Luton Street site. An Agreement for Lease (AfL) was exchanged with the developer in August 2016. The AfL states that the Council will grant a long lease to a residential investor who will contract with the developer to deliver the development. In December 2018 the developer approached the Council stating that they had been unsuccessful in agreeing terms with a residential investor to provide funding for the development of the private sale homes. To safeguard the delivery of the project and ensure a start on site in 2019, a number of delivery scenarios between the Council and developer were considered in which they would jointly participate as residential investor.

8.3       The Executive Director for Growth, Planning & Housing advised that Council Officers are seeking Cabinet approval for the Council’s wholly owned housing company to enter into a Limited Liability Partnership (LLP) with the appointed developer at a future date. Further to third party professional advice, the LLP is deemed to be the most effective and transparent corporate entity to ensure the delivery of the scheme, whilst offering the Council a robust and efficient governance and commercial structure in which to operate with potential for generating tax efficiencies of up to £2.3m.

8.4       Councillor Robathan stated that it is important that the Council progresses the scheme without delay and that residents see this to be the case. She noted the third party professional advice that entering into a LLP is the best arrangement for delivering the regeneration in a challenging development environment.

8.5       RESOLVED:

1.     That the financial details of the transaction contained in Appendix 4 to this report be exempt from publication by virtue of paragraph 3 of Part 1 of Schedule 12a of the Local Government Act 1972, as amended, in that they contain information relating to information relating to the financial or business affairs of any particular person (including the authority).

2.     Cabinet approved the principle of the Council’s wholly owned housing company, Westminster Housing Investments Limited entering into a Limited Liability Partnership for the delivery of the Luton Street scheme only.

3.   Cabinet to delegate approval of all final commercial terms and legal agreements to the Cabinet Member of for Finance, Property and Regeneration.

          Reasons for Decision

1.     The decision will create an efficient vehicle for the successful delivery of the Luton Street Scheme.

2.     The vehicle structure will provide the best value for money for the Council.

3.     Approval of the entity is required under the Council’s Financial Regulations.