Agenda item

To consider the attached report (C-026-2019-20).

(1)   The Cabinet noted the outline business cases for the proposed development of the following sites through Qualis Commercial:

            I.        St John’s Road

          II.        Epping Sports Centre – Hemnell Street

         III.        Bakers Lane Car Park

        IV.        Cottis Lane Car Park

          V.        Civic Offices – Conder Building

        VI.        Roundhills Site

(2)  The Cabinet noted that the transfer of these sites would be proposed on the understanding that the full business cases (to be presented at March Cabinet) achieved a minimum value to EFDC of 6% return on investment (in the form of land and loans) per annum from a mix of rental dividend and other financial returns and Qualis to provide a standard capital development return that as a minimum was 12%.

(3)    The Cabinet noted that if a full business case failed to prove operationally and financially viable (as set-out in recommendation 2), that land ownership would be transferred back to the Council at the value it was originally transferred, with any fruitless or transactional costs falling to Qualis.

(4)  The Cabinet noted the work undertaken by White Young Green to produce a development and design brief for the St John’s site.

(5)  That Cabinet approved a £500k working capital loan to Qualis Group for the next stages of work to be undertaken.

The Interim Strategic Director gave a short presentation on the redevelopment of the St John’s Road site.

In the July 2019 Cabinet meeting the Council set out its intention to set up a group of wholly owned Council Companies.  Work has been progressing well and the companies are now registered.  One of these companies (Qualis Commercial) would be able to undertake development projects directly for the council.  This approach would provide the Council with additional capital value and a long-term revenue income source.

The set-up work had identified that it would be beneficial for the Council to consider Epping Town sites as a package rather than individually. This would enable greater flexibility in terms of achieving commercially viable schemes that would:

•           promote the sustainable development in the town and surroundings

•           maximise the financial and business benefits

•           ability to aggregate the sites together to address car parking requirements and public realm areas.

The St. Johns site remained a priority and it was expected that the full business cases for the sites set out in this report would be brought forward for approval by the Cabinet in March 2020.  The Roundhills site will provide residential development in Waltham Abbey and would also be brought forward as an early scheme for Qualis Commercial.

At a meeting of the Cabinet in December 2018 it was decided that a development brief would be prepared for St John’s which would satisfy the needs and desires of the Council and the local populous, by accommodating the need to provide residential accommodation, a leisure centre incorporating a swimming pool, together with a cinema and associated retail provision. These goals were to be achieved in such a way as to be sensitive to the heritage of the site, complementary to the existing High Street and economically viable.  Consultants White Young Green (WYG) were commissioned to undertake this work.  The outcomes of this work were summarised in the report.

Councillor Holly Whitbread asked if the old sports centre would remain open while the development and building of the new Leisure centre was happening. She was assured that it would be.

Councillor Neville asked about the indicative values noting that on Hemnal Street there was 100% affordable housing, but it seemed that all the other sites had no affordable housing. He was told that there would be a mix of affordable housing in each scheme.

Councillor Patel asked when would the hoardings start to go up and when would we see actual images of what the development would look like in practice. He was told that the hoarding would go up in the next few weeks and the architects were still to do their detailed work so initial images to come after March.

Asked about parking for the proposed properties Councillor Rackman was told that it would be in accordance with the Local Plan.

Councillor Chris Pond asked how would residents of the new developments be precluded from owning cars as no parking space would be provided. And the prospect of having 400 new developments on the combined sites, seemed very dense for Epping. Councillor Philip replied that these sites were covered in the Local Plan, this may be slightly different but not significantly so, and the area covered from one end of Epping to the other was not so dense compared to the acreage. As for the other point we were caught with Climate impact dichotomy of providing more housing for our residents but bearing in mind the significant problem with the climate we had to make some hard decisions.

Councillor Janet Whitehouse asked about the permission for the hoarding coming to a sub-committee and about dealing with a homeless man who was living in that area. She was told that officers were aware of that situation and it was in hand. As for the permission for the hoarding, that would go to where ever the planning rules deemed that they should go.

Councillor Brookes asked about the new Leisure Centre, where undoubtably people would come from a long way away. What was the plan for Cottis Lane car park, was it decking? She was told that the current plan was to deck part of the Bakers Lane car park, with Cottis Lane being residential accommodation and no parking. But, we would have to wait for the full planning application to come forward. They were still considering the whole package rather than just one site.

Councillor Kaufman expressed concern about the 25,000sq. feet of retail space – they were looking at a lot of new shops, which could overshadow the existing High Street and limited parking.  Councillors needed more detail to substantiate the predictions being made.

Councillor Jon Whitehouse asked about the anticipated completion date for the Leisure Centre and what facilities were to be provided in the centre. It also seems that it was talking about double the amount of residential units that were to be provided as mentioned in the Local Plan; had the transport model been updated to take this into account, and what about provision for blue badge parking. He was told that they were hoping to be further advanced by the end of the year once the applications had gone through the planning process, but they could not put any dates to this now. As for parking they would have to look at the whole development and the Local Plan. And, for the facilities to be provided, this was an ongoing discussion still being had.

Councillor Caroline Pond asked about the Library, had there been any discussions with ECC about this. She was told that the Leader and the Chief Executive have had discussions with the appropriate portfolio holder, but had nothing further to report as yet on this.

Councillor Wixley suggested we look to installing diving facilities in the new pool.

DECISION:

(1)   The Cabinet noted the outline business cases for the proposed development of the following sites through Qualis Commercial:

            I.        St John’s Road

          II.        Epping Sports Centre – Hemnel Street

         III.        Bakers Lane Car Park

        IV.        Cottis Lane Car Park

          V.        Civic Offices – Conder Building

        VI.        Roundhills Site

(2)  The Cabinet noted that the transfer of these sites would be proposed on the understanding that the full business cases (to be presented at March Cabinet) achieved a minimum value to EFDC of 6% return on investment (in the form of land and loans) per annum from a mix of rental dividend and other financial returns and Qualis to provide a standard capital development return that as a minimum was 12%.

(3)    The Cabinet noted that if a full business case failed to prove operationally and financially viable (as set-out in recommendation 2), that land ownership would be transferred back to the Council at the value it was originally transferred, with any fruitless or transactional costs falling to Qualis.

(4)  The Cabinet noted the work undertaken by White Young Green to produce a development and design brief for the St John’s site.

(5)  That the Cabinet approved a £500k working capital loan to Qualis Group for the next stages of work to be undertaken.

Reasons for Proposed Decision:

The Epping Town sites are all located in important town centre locations, redevelopment will deliver considerable community and economic benefits for residents, businesses and visitors to Epping. It is imperative that the Council, as owners, now determine the future of the assets/sites, in the wider public interest. The Roundhills site provides a good opportunity to provide additional housing in the District.

Other Options for Action:

There were a number of potential alternative options available to the Council to include the sale of the core sites on the open market.  Alternatively, the Council could seek another private sector development partner. These marketing approaches would see a loss of direct control, potentially incurring further delay, and the risk that any new owner/partner would not produce a scheme, which fully realises the community benefits sought.  There would also be a lost opportunity for the council to achieve a new long-term income stream and additional asset capital value.