Decision

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.