Developer claims paying school and play area improvement contributions will make project 'unviable'

In 2017, Hawk Developments Ltd and Town Centre Properties Ltd were granted permission to convert Newport’s Royal Victoria Hotel into seven apartments and build 21 terraced houses behind it, between St Marys Street and Water Lane.

In a report for Telford and Wrekin’s Planning Committee, council officers note that this included an agreement to pay £72,070 and £16,800 towards education and recreation respectively, but Wem-based Hawk Developments has applied to remove these, saying the development would be “relatively finely balanced” even without them.

Officers recommend the committee grants the necessary “deed of variation”, adding that they accept the company’s justification and its case has been independently assessed.

Section 106 of the 1990 Town and Country Planning Act allows councils to enter into contracts with developers, requesting money for facilities, affordable housing or other benefits as part of the planning process. Section 106a allows councils to amend those agreements or discharge them where they “no longer serve a planning purpose”, the planners’ report says.

“The applicant has, on two separate occasions, submitted evidence to the local planning authority to demonstrate that bringing the site forward is not viable and has requested the obligations for commuted sums be removed,” officers write.

The report notes that Town Centre Properties has already transferred the 21 houses to the Wrekin Housing Group who are offering them all for affordable rent.

“This development is now considered, for the most part, to be complete and pending imminent occupations,” it adds.

“In December 2018, the applicant’s primary funder was placed into administration and placed in a position of having to re-pay borrowings with a half-completed development with no immediate finance to complete the it, resulting in a substantial loss.

“Officers accept the applicant’s justification that the section 106 agreement as approved is now unviable and needs to be reconsidered for the applicant as a willing developer to bring the site forward.

“The applicant has demonstrated that, with the omission of the commuted sums, the proposed development of the site is financially viable, albeit acknowledging that the financial viability is relatively finely balanced.”

The Telford and Wrekin Council Planning Committee is due to meet on Wednesday, November 24.