Inspector to decide if developer should pay more Sidmouth community cash

How the redeveloped Green Close could look

How the redeveloped Green Close could look - Credit: Archant

A government planning inspector will decide whether a developer will have to pay a share of its profits from 36 proposed sheltered apartments to the public coffers.

The matter was the subject of an inquiry this week after Churchill Retirement Living and East Devon District Council (EDDC) could not agree terms for an ‘overage’ clause.

Churchill hopes to demolish the former Green Close care home in Drakes Avenue to make way for the development. The firm launched an appeal due to non-determination of its application.

The delay in EDDC deciding the fate of the scheme was due to officers trying to apply an ‘overage’ clause that would require Churchill to pay up if its profits exceed current expectations.

EDDC documents argue plans to create the apartments for the elderly should be worth nearly £1million to the Sidmouth community – but the developer has shown it is ‘unviable’ to pay more than £41,000.

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Churchill’s five-figure offer towards off-site ‘affordable’ housing was last year slammed as an ‘insult to Sidmouth’ by town councillors, who suggested the developer should pay at least £360,000.

Papers submitted to the appeal process from EDDC say there is a policy expectation that half of the site should be provided as ‘affordable’ housing and that there is a ‘substantial’ need for one- and two-bedroom units in Sidmouth.

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If 18 ‘affordable’ homes cannot be provided on-site, a payment of £935,201 would be expected so the properties can be built elsewhere.

Churchill said a viability assessment showed building ‘affordable’ homes on the site was ‘impractical’ and ‘unrealistic’.

It added: “It has been demonstrated that the application development is not sufficiently viable to permit the imposition of any affordable housing or planning gain contributions above £41,208.”

An EDDC spokeswoman said: “Unfortunately, the development is not sufficiently viable to pay this [£935,201] sum and, following an independent assessment of the viability of the scheme, it was reluctantly accepted that the scheme could only afford to pay £41,208 towards affordable housing.

“Under government guidance, we are required to reduce our requirements where a development is unviable and so we have no real choice but to accept this position.”

EDDC also expected Churchill to pay £22,536 for habitat mitigation, plus an £18,400 public open space contribution. The total is nearly £1million.

At the hearing on Wednesday, a representative for the developer said a viability report showed it could not offer more than £41,208 if it wanted a competitive return of 20 per cent.

He argued such developments, both locally and nationally, did not have an ‘overage’ clause like the one proposed and added that it was not in line with national guidelines.

“We need to ensure there are competitive returns for the developer and the landowner,” said the representative.

“If the developer, through his own skill or from fortuitous circumstances, makes a larger profit than intended, then the council wants to have a proportion of it and, if they are not so fortunate and make less than 20 per cent, the entire downside is to be borne by the developer.”

Town councillor Ian Barlow argued that the £41,208 contribution was only agreed to because councillors were told it was subject to an ‘overage’ clause. He added: “If they make an obscene amount of money from our community, then they should put it back into the community. They are now saying it is not plausible.

“We only deal with common sense.

“Theoretically, if someone builds a £5million-ish place and they are only giving around £41,000 back, at the end of the day, that does not seem right.”

Cllr Barlow argued that he found it hard to believe such a successful company would make an investment which was not financially viable.

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