Agenda item

Wirral Waters One, Legacy Project

Minutes:

 

Cllr Angela Davies new

Councillor Angela Davies, Cabinet Member for Jobs and Growth, said:

 

Creating new homes on brownfield sites has never been more important. Huge Government house-building targets mean we have to take every opportunity to encourage, enable and drive landowners to develop brownfield sites and build the homes Wirral residents’ need.

 

“We have been clear with every developer and landowner in this borough who has planning permissions in place: we will support you every step of the way, but we need you to build the homes you promised. The Wirral Waters One proposal demonstrates just how serious we are in our determination to get brownfield sites developed.

 

“This is an ambitious and entrepreneurial move by Wirral Council. We know we need housing to be developed on brownfield sites and at Wirral Waters in particular, to relieve some pressure from our Green Belt. It is also clear these types of schemes are always difficult for private developers to make viable.

 

“The Council has stepped in and made it work. We have secured national funding to improve local infrastructure, we have worked hand in hand with the developers to make sure the quality of the homes was at the right level, and we have pulled together a solid commercial approach to make sure the financing needed to make the scheme a reality is available.

 

“This commercial deal also ensures the Council will generate ongoing revenue from the homes which are built, which can be used to invest further into making difficult brownfield regeneration schemes more viable.

 

“An extensive amount of work has been delivered to get this scheme to where it is today. We now have a major housing development coming forward at Wirral Waters – the first of what we hope will be many such schemes.”

 

Councillor Angela Davies introduced a report which reminded Members that on 26 February 2018 (Min 88 referred) the Cabinet had considered and approved a proposal to progress the development of the Wirral Waters One Project.  Primarily this was a project to bring forward 500 residential units in a 1 and 2 bedroom apartment scheme on the East Float of Wirral Waters.  It was a joint project between Peel Holdings, Aviva (as the scheme funder) and the Council, with the Council entering into a lease for the apartments for up to 50 years.

 

Consequently, the Cabinet had instructed officers to develop a business case for the delivery of a commercially viable scheme commensurate with the Council’s level of investment.  In addition, officers had been instructed to establish a trading company, limited by shares, to hold the lease to enable the delivery of the development in the longer term.

 

Members noted that the development would be the first large scale purpose-built private rented scheme in Wirral and would significantly enhance the housing offer within the local area by providing high quality private rented apartments, on brownfield land, on a waterfront location.  The rental levels for 20% of the apartments would meet the criteria for affordable housing.  The scheme would also unlock further residential and commercial development in Wirral Waters creating a new community within the dockland area.

 

The report included a business case for the Council to participate in the scheme on an investment basis which had been assessed as having the potential to deliver an acceptable rate of return on the investment.  It confirmed that the market economy operator principle had been met by the scheme and set out the legal structure through which the development would be procured, delivered and managed over the 50 years of the Council’s lease.

 

Members were aware that the Wirral Plan had a pledge to deliver good quality housing that met the needs of residents.  The Wirral Waters One Project would bring forward a new type of housing offer but it would also by the forerunner of two further residential schemes at East Float which would enable Housing Infrastructure Funding to be accessed.  The three residential developments would together result in some 1000 residential units being delivered.  It was noted that the following pledges would also be supported by the scheme:

 

·  Inward investment

·  Greater job opportunities in Wirral.

 

Annex 1 and three appendices to the report were exempt under Paragraph 3 of Schedule 12A of the Local Government Act 18972 due to the commercial sensitivities of the information contained. They would be considered by the Cabinet in the absence of the press and public later in the meeting. Minute No. 27 refers.)

 

This was a key decision and this matter affected all Wards within the Borough.

 

Councillor Angela Davies reported that Cabinet Members were aware that local people cared about where they lived and about green open spaces.  They had listened to all the comments that had been received on the Local Plan and had agreed that brown field sites must be developed first.  The Wirral Waters proposal showed how determined they were to do this and avoid building on greenbelt land. 

 

The Cabinet considered the other options detailed in the report as follows:

 

·  Do nothing. This would result in the scheme not progressing in its present form with the risk that development would not take place.  The Full Business Case outlined that the viability of the scheme was based upon utilising the strength of the Council’s covenant through taking the lease of the development.

 

·  Direct Delivery by the Council.   This had not been an option as the land upon which this development would take place was in the ownership of Peel Holdings Land and Property (UK) Limited.  Peel was carrying out the remediation of the land in advance of the development and had outlined plans for two further residential schemes at East Float which will follow the Wirral Waters One Project. 

 

The Belong scheme was for a specialist dementia care village comprising of 12 ‘household’ units for 6 residents each, 34 apartments and a number of visitor suites, a mixed extra care facility and guest bedrooms. Urban Splash would be bringing forward a range of 1 to 3 storey houses and apartments to deliver up to 347 units.

 

The Wirral Waters One Project was seen by Peel as a catalyst for the wider developments and these plans had also been supported by the award of £6m from the Government’s Housing Infrastructure Fund which would enable further infrastructure improvements in the area.

 

·  Wirral Council Funding the Scheme directly.  This option would be for the Council to fund the scheme directly thereby removing the need for Aviva’s investment. In order to do this the Council would need to reopen its Housing Revenue Account and build the apartments directly.  This was not a viable option to pursue.

 

Councillor Chris Jones commented that the care village was going to be so important.  It showed Wirral was going places.  It was a real starter and other developments would follow.

 

Councillor Paul Stuart informed that Peel Holdings now had secured funding from Aviva and the time was now right for the Wirral Waters development as it was supported by partners and investment. The Council backed the project and looked forward to working with Peel.

 

Councillor Phil Brightmore reported that he was very proud of the decisions being made locally to build on brown field sites.

 

Councillor Janette Williams commented that the project was a perfect example of how the Council’s Commercial Strategy had come on by leaps and bounds and the development works would provide local people with jobs in the locality.

 

Councillor George Davies informed that he was delighted, that after nearly two years, this development was going to go ahead on a very sound commercial basis.  Working together commercially was the only way forward to achieve the Council’s development inspirations.

 

Councillor Bernie Mooney ireported that it was pleasing that the investors had faith in the Council’s Administration and that they were prepared to come to Wirral to invest.

 

Councillor Phil Davies informed that the agreement on the project was a milestone.  Peel Holdings had been challenged to start building work.  Partnership working was now moving forward building on brown field sites.  The Wirral Waters site was the largest brown field site in the borough.  It was the catalyst for a whole series of developments.  This would help to pave the way for other development works and help the Council achieve its housing targets.  The aims were to use every scrap of brown field site because this would relieve the pressure on greenbelt land and to use local labourers to deliver some of the key pledges in the Wirral Plan.

 

Councillor Phil Davies thanked all the officers who had worked tirelessly on the Wirral Waters project to make sure that the deal that had been reached would provide good value for Wirral Council Tax Payers.

 

RESOLVED: That

 

(1)  the Full Business Case for Wirral Waters One Project be agreed thereby approving, in principle, for the Council to enter into a lease of residential units for up to 50 years as an investment vehicle;

 

(2)  the Director of Governance and Assurance, in consultation with the Corporate Director for Business Management and the Director of Finance and Investment, be authorised to:

 

(a)  enter into an Agreement for Lease between Wirral Council, Peel Legacy (Wirral Waters) Limited and Peel Holdings Land and Property (UK) Limited, on terms that are substantially in accordance with the draft set out at Appendix 2, noting that the Agreement for Lease contains a number of conditions that must be satisfactorily met before the Agreement is deemed to be unconditional;

 

(b)  enter into a 50-year under-lease and other ancillary agreements for the residential units with Aviva Investors Commercial Assets GP Limited when the conditions within the Agreement for Lease have been satisfactorily met;

 

(c)  grant a sub under-lease to a Peel Management Company, intended as a single purpose vehicle (SPV), for it to manage the leasehold property and grant the residential tenancies from Years 0-10;

 

(d)  form a wholly owned company limited by shares to operate as a property management business; and

 

(e)  grant a sub-under-lease to the wholly owned company for it to manage the leasehold property and grant the residential tenancies from the ending of the sub-under-lease (referred to at (c) above) to Year 50.

 

(3)  the Corporate Director for Business Management, in consultation with the relevant Cabinet portfolio holder, be authorised to determine the relevant approvals granted to the Council in the Agreement for Lease as and when each condition is met to his or her satisfaction; and

 

(4)  the Cabinet be requested to note that:

 

(a)  the head-lease to be granted by Peel Holdings Land and Property (UK) Limited to Peel Legacy (Wirral Waters) Limited is to be assigned for 250 years to Aviva Investors Commercial Assets GP Limited; and

 

(b)  the Agreement for Lease grants an option for the Council to hold 350 of the residential units for the remainder of the 250 year head-lease period and that the decision on whether or not to exercise that option to acquire will be made by the Council at the relevant time.

 

Supporting documents: