Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: Yes
(Director of Strategy, Innovation and Resources) on behalf of (Director of Customer and Commercial Services)
Consideration was given to the sale of Council owned land to the east of Manorside, Flookburgh, in order to facilitate the development of an adjacent allocated residential development site.
Following the housing stock transfer in 2012, The Council had retained freehold ownership of a small area of housing amenity land at Manorside, Flookburgh. The land to the immediate east of the land had been allocated for residential development within the Council’s 2013 Land Allocations Development Plan Document (LADPD). The key to the delivery of the planning allocation was to secure appropriate vehicular access. The allocated site could potentially be accessed from Manorside or from Market Street (B5277).
A prospective developer was in the process of finalising an ‘option to purchase’ with the owner of the allocated housing site. The developer had also approached the Council with a request to purchase the land at Manorside under the terms of an ‘option to purchase’ in order to facilitate vehicular access to the development site.
The Council’s property agent, Lambert Smith Hampton (LSH) had been tasked with leading negotiations with the developer. LSH had attempted to reach agreement in accordance with the principle of ‘ransom value’ in the context of the extent of alternative access options to the development site. If access to the development site could only have been achieved over the Council’s land, negotiations for the sale/right of access would have started at 50% of the increase in value of the development site (half of the difference between residential development land value and existing use value). This arose from the basis that value could not have been unlocked without the agreement of both parties, the allocated site landowner and the Council as ‘ransom’ landowner, so any benefit should be shared equally. This approach accorded with relevant case law and the ‘best consideration’ requirements of s123 of the Local Government Act 1972.
Pre-application advice from the Council’s Development Management Team had confirmed that the allocated site could ‘in theory’ be accessed directly from Market Street (B5277) or from Manorside, subject to County Highways approval. This advice led to the negotiation approach to move to the assessment of 50% of the construction cost saving of utilising the proposed access route from Manorside, versus the alternative option of access from Market Street.
Following evaluation of the respective costs, by LSH, it was provisionally agreed that Manorside was the cheaper of the two access options.
Note – The valuation was detailed in Appendix 1 in Part ll of the Agenda which was excluded from inspection by members of the public in accordance with Section 100B(2) of the Local Government Act 1972, copies of the appendix to this report are excluded from inspection by members of the public as they contain information as described in Schedule 12A of the Act, as amended by the Local Government (Access to Information) (Variation) Order 2006, as follows:-
- Information relating to the financial or business affairs of any particular
person (including the authority holding that information). (Paragraph 3)
The developer subsequently agreed to the valuation and was looking into entering into an ‘option agreement’ to purchase the land from the Council. The ‘option agreement’ would run for a maximum period of three years.
Established local authority policy on the sale of small ad-hoc areas of land was generally that:-
· Each case should be treated on its own merits; and
· A sale would usually be approved where:-
1. The land was not required for service provision;
2. The land had no conceivable development potential (existing or future) either in isolation or in conjunction with adjoining council retained land; and
3. Disposal would not result in and adverse effect on retained council property.
None of the above three reasons was present to resist the decision to dispose of the land.
Part of the subject area of land was temporarily let to a local resident on a garden tenancy basis. The arrangement could be terminated upon three months’ notice.
(1) the sale of Council owned land to the east of Manorside, Flookburgh, for the sum, as per the valuation by Lambert Smith Hampton and as noted in the Part II Appendix 1 to the report, to facilitate residential development of an adjacent area of land which has been allocated for housing in the South Lakeland Local Plan Land Allocations DPD be authorised.
(2) the negotiation and documentation of the terms of the sale be delegated to the Operational Lead for Delivery and Commercial Services in conjunction with the Lead Specialist for Legal, Governance and Democracy.
Reasons for Decision
(1) To assist in the delivery of the Council Plan priorities for Housing and Communities:
Creating balanced communities by delivering affordable homes to meet need (through the facilitation of the adjoining allocated development site) with:-
a) new affordable homes to rent (Adopted local policy will require ten affordable homes on the adjoining site, including five affordable rent units); and
b) a range of housing to attract and retain young people.
(2) To assist in the achievement of the Council Performance Indicators:-
a) The number of completed permanent dwellings each quarter within South Lakeland; and
b) The number of new affordable homes for rent provided this quarter.
Alternative Options Considered and Rejected
To sell the land upfront without an ‘option agreement’. The adjoining allocated development site did not yet have planning consent and the developer had not yet completed due diligence site enquiries and investigations. Consequently the upfront sale of the subject land by the Council would increase risk to an unacceptable level from the perspective of the developer. The developer would also be reluctant to expend significant upfront capital outlay.
To offer the land for sale on the ‘open market.’ This option would not be appropriate in this instance as the proposed developer purchaser had control of the adjoining allocated development site. The subject land would have little value in existing use without the potential to serve as a vehicular access for the adjoining development site.
Publication date: 11/09/2020
Date of decision: 10/09/2020
Decided at meeting: 10/09/2020 - Delegated Executive Decisions
Effective from: 21/09/2020
Current call-in Count: 0