Minutes:
The Committee considered the undernoted report:
“1Relevant Background Information
1.1 Following previous Committee decisions to market for sale, free of restrictions, lands at McClure Street the Strategic Policy & Resources Committee at its meeting of 19th August 2011 approved appointment of an estate agent to progress a disposal at an asking price in the region of £450,000 with a further report to be brought back for approval of terms of any proposed disposal.
1.2 The site was marketed (for sale board, advertised in local papers, targeted mail shot of brochure) from October 2011. Despite an extensive campaign only one bid was eventually received in March 2012 from Apex Housing Association at a figure substantially below the guide price quoted.
1.3 In addition to the depressed state of the property market the development opportunities for this site remain very limited. Despite having previously received lucrative bids to purchase in the past these offers were predicated on receipt of planning for general housing. Notwithstanding these offers Planning Service advice was that these plans would not be granted permission. A further planning assessment for the site confirmed current planning policy would preclude such general housing development.
1.4 In keeping with dBMAP and current planning policy guidelines the Apex proposal is to develop social housing units that addresses a requirement for any development to pass an exceptions planning test for this designated open space and to deliver “substantial community benefits”
1.5 With the failure to secure any other interest in the site officers met with representatives from Apex in an attempt to find a way forward that would secure an enhanced disposal price in the absence of any competitive bidding process. This resulted in agreement to request Land & Property Services to undertake a valuation based on the Council’s planning assessment for the site.
1.6 Land & Property Services have provided a valuation of £240,000 reflecting social housing development and on this basis Apex have agreed to progress the purchase of this site, subject to Committee approval and planning.
2 Key Issues
2.1 Despite exhaustive efforts made to attract bids for this site the only bid secured was from Apex Housing Association at £150,000 for the development of 16 social housing units. A combination of current planning designation (open space) which requires any development proposals to deliver “substantial community benefits” and the continuing effects of the economic down turn which has hit the property market in Northern Ireland particularly hard has impacted on the market value of this site.
2.2 Current dBMAP designation as “open space” and development constraints of PPS8 very much restrict the development potential of the site and hence the pool of potential bidders. Having been marketed for over a year officers initiated a meeting with Apex representatives to discuss a way forward that would secure the best price for the site and deliver another social housing project on former Council owned land. Apex agreed to the proposal that Land & Property Services would provide a valuation of the site as the basis on which to progress a purchase.
2.3 In addition to the negative property market and planning factors, the narrow linear shape of the site presents its own development challenge. Over and above these recognised limitations Apex also claimed development potential was further eroded with development abnormals totalling £267,000, proximity to a railway cutting and the presence of twin NI Water mains in McClure Street. On this basis Apex estimated only 16 social housing units could be developed on the site.
2.4 In order to address the issues raised in maximising a return from this disposal further planning advice was sought to counter the claims made by Apex and to provide a scheme proposal that would achieve full potential from development of the site with 22 social housing units. This planning advice was provided to Land & Property Services and formed the basis of reaching their assessment of £240,000.
2.5 Apex have now agreed to make an offer to purchase on the basis of the assessment provided by Land & Property Services but still have reservations in respect of the housing density they can secure at planning. To this end they have sought to subsequently reduce the premium agreed for any housing units for which they fail to achieve planning consent. The Council will retain the right to approve the scheme that Apex submits to Planning Service in the first instance in order to ensure Apex seeks to maximise the number of units on the site and hence the full premium secured.
2.6 The land is currently a long narrow wedge of informal open space that is poorly used and attracts fly tipping with ongoing maintenance issues. Should this disposal proceed Council retain and manage a further area of open space on McClure Street (directly opposite the site being sold) together with McClure Street playground as Council community facilities retained in the vicinity.
3 Resource Implications
3.1 Financial
Capital receipts can be utilised in furtherance of the Belfast Investment Fund, capital projects and other corporate priorities.
Ongoing annual costs associated with the maintenance of this open space will cease upon completion of the sale.
3.2 Human Resources
Staff resources in Estates Management Unit and Legal Services required to conclude the disposal.
3.3 Asset and Other Implications
Disposal and development of this land with resultant redeployment of the capital receipts towards other Council priorities should represent a better use of resources.
Subject to planning it is likely that the Apex proposals for the site will provide between 16-22 social housing units.
Provision of additional social housing to address a need identified by NIHE with associated regenerative benefits for the general area.
4 Equality and Good Relations Implications
4.1 There are no equality implications at this stage.
5 Recommendations
5.1 Members are requested to approve the disposal of this land as set out above and subject to terms agreed by the Estates Manager and Legal Services.”
The Committee adopted the recommendation.