Decision Maker: Cabinet

Outcome: Item Called In

Is Key Decision?: No

Is Callable In?: Yes

Date of Decision: February 4, 2025

Purpose:

Content: Decision   For the reasons set out in the report and its appendices Cabinet RESOLVED to Agree:   i)  To continue delivery of the Carpenters Estate Restoration and Regeneration scheme based on the updated strategy and viability assessment of the Carpenters Masterplan set out at 4.1-4.10 and Exempt Appendix A, noting the forecast impact on key financial reporting metrics in Table 4.2. ii)  To note the draft Section 106 Agreement for the Carpenters Estate Outline Masterplan at Appendix G and the cumulative associated financial and social obligations, as set out in this report, that the Council is committed to deliver as part of the Section 106 Agreement, including the financial contributions amounting to £15.89m, and the impact of these obligations within the context of the Council’s general exposure to this expenditure. iii)  Subject to 2.3 above, to approve the Council’s entry as freehold owner into a S106 Agreement for the Carpenters Estate Outline Masterplan in terms substantially the same as those at Appendix G. iv)  To delegate authority to the Corporate Director of Inclusive Economy, Housing and Culture, in consultation with the Lead Member for Inclusive Economy, Strategic Housing Delivery and Culture to finalise and complete the S106 Agreement and take all necessary ancillary steps and measures to implement a Planning Obligation by Agreement made pursuant to Section 106 of the Town and Country Planning Act 1990 for the site shown outlined red on the plan at Appendix H. v)  To approve the updated Vacant Possession Strategy set out at Exempt Appendix E in respect of revisions to the residential buy backs programme, as summarised at paragraphs 4.17 to 4.21 of this Report. vi)  To delegate authority to the Corporate Director of Inclusive Economy, Housing & Culture to agree to acquire, on occasion and as may be appropriate, properties currently marked as ‘not to progress at this stage’ as set out in Exempt Appendix E. Subject to having the available budget and relevant governance. vii)  To note the Property Arrangements and Major Sites Negotiations Strategy set out in Appendix F and summarised at paragraph 5.17 of this Report. viii)  To approve the updated strategy for Phase 2, Lund Quarter set out at Appendix D and the expansion of Phase 2 from 385 homes to 505 homes with an additional forecast development cost increase of £49m from £196m to £245m. ix)  Subject to 2.9, to approve a variation to the Development Management Services Agreement for Phase 2 Lund Quarter to provide for an increase in professional fees at a cost of £538k, to be met by way of transfer from the Populo Design and Build Development Management professional fees budget for Station Quarter to Lund Quarter. x)  To approve the proposal to exclude the Dennison parcel from the detailed planning application for the Phase 3 Station Quarter Delivery Strategy as summarised at 4.41. xi)  To approve the increased budget for the James Riley Point development from £78.1m to £98.3m, to cover prolongation, inflation, and increased cost estimates, split into pre-construction and construction budgets, as set out in Exempt Appendix B. xii)  To delegate authority to the Corporate Director of Resources in consultation with the Lead Member for Finance and the Lead Member for Housing Landlord and Tenant Experience Improvements to approve the Social Housing Decarbonisation Fund (SHDF) application for grant funding for JRP where match funding is required from the approved development budget and to approve entry into any grant funding agreement for James Riley Point should these be successful. xiii)  To approve the revised scope and commencement of the James Riley Point Enabling Works, without full vacant possession and with an exclusion zone around the remaining leaseholder’s flat, as detailed in paragraphs 5.37 & 5.38. xiv)  To delegate authority to the Corporate Director of Inclusive Economy, Housing & Culture, in consultation with the Lead Member for Inclusive Economy, Strategic Housing Delivery and Culture to award the contract for the enabling works at James Riley Point. xv)  To approve the expenditure under the ‘Pre-Construction Budget’ as set out in Appendix B, amending the Populo Design & Build Development Agreement Budget accordingly.   Alternatives Considered   a)  The Early Phases, including Phase 1, JRP; Phase 2, Lund Quarter; Phase 3, Station Quarter; and Carpenters Primary School are all approved under Development Management Agreements with Populo Living and, as the Council’s wholly owned subsidiary, these agreements can be amended or paused at any point, stopping further work to progress the programme of design development and delivery on the Carpenters, as set out in this report and the previously cited September 2023 Cabinet report. b)  The project could be paused or halted in its entirety or in part, indefinitely or until the Council considers it appropriate to restart the project and associated design development work. The Council could alternatively choose to dispose of phases or procure a JV partner at this point, however it should be noted that the latter would still require the associated expense on design development once a partner was in place, and through the removal of profit, would impact on project viability, and the former would relinquish control and significantly impact the delivery of affordable housing and Community Wealth Building aspirations. c)  Should the Council choose to halt progress on the Carpenters Programme this would be likely to result in the loss of specialist expertise and knowledge of the project, a significant loss of confidence and the momentum built up with residents and key stakeholders, resulting in reputational damage, and lead to considerable additional cost and delay should the project recommence, through the need to recruit and reprocure appropriate professional teams and technical specialists. d)  It should also be noted that the majority of the expense to bring forward such a masterplan is in the construction of phases or buildings, not the design development required to procure the construction. The proposed design development of the early phases within this report will enable the Council to be able to proceed with the construction of these phases, should it wish to, but would not require the Council to progress any works other than that associated with James Riley Point. It should be noted though that without Phase 2 being delivered, or an alternative delivery method being pursued which off-set the negative NPV, the Council would be left with a deficit. e)  In this case, the Council can stop the project following the enabling works, which strip the building back to the concreate frame, should the concreate not be in the expected condition, without any significant abortive costs. The Council could then choose to demolish the building completely and consider other alternatives for the site, including a new build development. Should the Council choose to proceed through the Stage 4 Design and seek a fixed price from the contractor, the Council then has the option to accept this and proceed to construction or consider the above alternatives. f)  In the case of Phase 2, Lund Quarter, additional design fees are required in order to enhance the scheme which will deliver more homes. The Council has the choice to not accept this approach and request the design team work to the original masterplan and the reduced number of homes or not proceed with the design work at all. The decision to proceed with any phase can then be determined based on market conditions and other Council priorities at the point of the required construction investment for a phase or programme of delivery. These decisions will be taken by Cabinet at the appropriate time and will benefit from a full options appraisal.