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Cabinet:
 
(1)           
agreed to the renegotiated Heads of Terms
(HoTs) for a Deed of Variation to the
Development Agreement as outlined in this report;

 
(2)           
noted the splitting of the land payment apportioned
to the Fellowship Square (FSQ) site and Willow House and the
associated risk of the likely reduction in the Willow House land
receipt as detailed in Appendix 1 (exempt) of the
report;
 
(3)           
noted the change in tenure for Willow House to be
delivered as a 100% Build To Rent (BTR) scheme with previously
assumed affordable housing at Willow House to be swapped to Block H
at FSQ utilising already secured GLA grant - resulting in 46%
Affordable Housing (AH) across the scheme; and
 
(4)           
delegated authority to the Strategic Director of
Place in consultation with the Deputy Leader (Housing and
Regeneration), the Strategic Director of Resources and the
Corporate Director of Governance and Law to enter into the Deed of
Variation to the Development Agreement.
 

Options & Alternatives Considered

LBWF has the right to seek alternative delivery
partners for phases that have not commenced. This option would
involve significant additional costs of reprocuring, delays to
overall delivery by undertaking a lengthy re-procurement process
and the risk of not finding an alternative partner due to the
challenges involved with taking on a partially developed site. A
positive partnership relationship has been developed between LBWF
and Countryside and this is considered the best route forward to
maintain delivery of the FSQ programme and ensure completion of the
remaining phases. Therefore the option of seeking alternative
delivery partners has been rejected due to the time required to
reprocure, additional costs involved and likely unsuccessful
result.

Due to the challenges Countryside have reported of
delivering Willow House on the original DA terms, LBWF have the
right to test the DA in court to hold Countryside to the original
terms. However, with Countryside demonstrating their continued
commitment to the overall delivery programme and including delivery
at risk, this option has been rejected. Additionally there would be
significant, unnecessary, legal fees associated with this
process.

LBWF could resist revising the HoTs and continue with the terms in the current DA.
This has been rejected as this would mean there would be no
guarantees of when any land payment would be received, and the
Willow House site could be stalled indefinitely.

Current Countryside market value appraisals for
Willow House, detailed in Appendix 1 (exempt) of the report, have
been verified by LBWF’s development consultant and although
is comparable against similar schemes on a unit basis, may not be
achievable if the site was tendered to a different developer. Due
to constraints of the Willow House site, a mixed tenure development
with family sized homes would reduce viability therefore it is
agreed a one and two bed development is more suitable in order to
maximise the number of homes and deliver the highest market value.
Additionally, Countryside are able to leverage economies of scale
in their supply chain and are delivering the adjacent Patchworks
site which will reduce the preliminaries and site setup costs which
other developers would not benefit from.

The revised terms provide improved financial terms
for LBWF by guaranteeing a fixed land payment and timing of
payment.

Although there is a risk the Willow House land value
could decrease, it is acceptable on the basis that Willow House can
be redeveloped, delivering much needed housing, whilst
simultaneously unlocking the remaining blocks at FSQ which can also
deliver affordable housing.

Agreeing to these terms does not obligate LBWF to
acquire the 50 homes in Block H.

By not agreeing to these revised terms, uncertainty
will remain on the land payment date and delivery of remaining
housing at Fellowship Square and Willow House. Therefore, Cabinet
is recommended to approve the HoTs to
enable a Deed of Variation to the FSQ DA to be executed.