Decision details

a)    That the outcome of the options appraisal for the delivery of the East of Lutterworth Strategic Development Area (SDA) scheme be noted;

 

b)    That the comments of the Scrutiny Commission on the proposed preferred approach be noted;

 

c)     That the East of Lutterworth SDA scheme be delivered via a hybrid approach of Option 5 (Joint Venture – Enabling / Development / Operational Partner) and Option 2 (Self Development) as outlined in paragraphs 51 to 54 of the report;

 

d)    That the delivery of other growth schemes arising in the County and their possible inclusion within the Joint Venture arrangement at (c) above be considered on a project-by-project basis, and subject to further reports to the Scrutiny Commission and the Cabinet as appropriate;

 

e)    That the specific objectives for the delivery of the Lutterworth East SDA scheme as listed in paragraph 25 of the report be approved;

 

f)      That the proposed next steps for the Lutterworth East SDA project be noted and further reports be submitted to the Cabinet in March 2020 to seek approval for:

 

                               i.            the planned procurement approach and scope;

 

                              ii.            proposals for the establishment, structure and governance of the Joint Venture arrangement through a limited liability partnership;

 

g)    That the Director of Corporate Resources undertake further member and officer engagement as outlined in paragraph 102 of the report.

 

(KEY DECISION)

 

REASONS FOR DECISION:

 

Establishing a joint venture with a strategic private sector partner on a 50/50 basis to fund, develop and manage the Lutterworth scheme most closely aligns to the Council’s aspirations for ensuring control over site development whilst sharing risk and obtaining a financial return.  Once established the partnership can also be used as a vehicle for the delivery of future sites if deemed appropriate by members.  This approach was supported by the Scrutiny Commission on 6 November 2019.

 

The risks generated by self-development of the employment site to the south of Lutterworth East are clearer and more manageable and the financial rewards significant enough to offset these, therefore this area will be developed by the Council independently of the joint venture.

 

The specific objectives developed for delivery of the Lutterworth East SDA reflect the aspiration for a high-quality development in line with the Council’s Strategic Plan outcomes whilst also recognising the need to generate financial returns relative to the risks taken during development.

 

OTHER OPTIONS CONSIDERED

 

The following five options were considered:

 

Option 1: Disposal with Planning Permission

The traditional approach, used as a baseline against which other options were compared. 

 

Option 2: Self Development

The Council carries out construction of the entire housing and commercial development.

 

Option 3: Joint Venture - Enabling Partner

The Council plus one or more commercial partners. Each contributes resources (land, capital, staff and/or other equipment/assets) and a new Joint Venture business is created in which all collaborate, risks and benefits shared. The Council enters into a partnership with a development/investment partner, the site is enabled by the partnership and serviced plots sold to the market. All services to establish planning consents, removal of development issues, etc. is undertaken by the Joint Venture partnership and the Council receives a land receipt and share of the profit from enablement. 

 

Option 4: Joint Venture - Development Partner

The Council goes into partnership with a development/investment partner. The site is enabled, residential/commercial elements are developed by the Joint Venture, and the Council receives a land receipt and share of the development profit.

 

Option 5: Joint Venture - Enabling / Development / Operational Partner

The Council enters into a 50/50 partnership with a strategic partner. The site is enabled by the Joint Venture, some developed by the partnership and other plots sold to developers. Operational elements are owned/operated by the partnership over the long-term. The Council receives a land receipt and share of the development/operational profit (e.g. private rental, commercial income).