Agenda item

14.1

The Executive Director, Place submitted a report in relation to the termination of the Scowerdons, Weakland and Newstead (SWaN) Development Agreement.

14.2

RESOLVED: That Cabinet approves the termination of the Scowerdons, Weakland and Newstead (SWaN) Development Agreement:.

14.3

Reasons for Decision

14.3.1

The Development Agreement between SCC and Home Group to deliver new, mixed tenure housing on the estates is no longer fit for purpose, and any future development under the Agreement would not be financially beneficial for either party. A mutual decision to terminate the Development Agreement at No Fault would allow the Council to find alternative options for the redevelopment of the remaining land.

14.4

Alternatives Considered and Rejected

14.4.1

Continue with the Development Agreement and continue to hand land over in phases to Home Group for development: Future phases will not meet the Development Agreement’s key financial indicators and so will not be financially viable. Phases will not be handed over for development if they are not financially viable, so this option was rejected.

14.4.2

Terminate the Development Agreement at Home Group’s Fault: A failure to meet the key financial indicators (KFIs) for an individual phase is not specifically mentioned as a material breach of the warranties and obligations of Home Group under the terms of the Development Agreement. The Development Agreement sets out a procedure for addressing failure to meet the KFIs, which includes deferring phases and re-running the financial appraisal.  If the KFIs are still not met, and the parties cannot agree steps to preserve the KFIs, then the Development Agreement terminates as a No Fault Termination. This option was therefore rejected.

14.4.3

Allow the Development Agreement to ‘time out’: the Development Agreement will automatically terminate at No Fault in March 2018 (the Longstop Date). This option would mean that the Council could do nothing with the land until the Longstop Date is reached, so this option was rejected.

14.5

Any Interest Declared or Dispensation Granted

None

14.6

Reason for Exemption if Public/Press Excluded During Consideration

The report contains exempt information under Paragraph 3 of Schedule 12A of the Local Government Act 1972 (as amended).

14.7

Respective Director Responsible for Implementation

Simon Green, Executive Director, Place

14.8

Relevant Scrutiny and Policy Development Committee If Decision Called In

Economic and Environmental Wellbeing

14.1

The Executive Director, Place submitted a report in relation to the termination of the Scowerdons, Weakland and Newstead (SWaN) Development Agreement.

14.2

RESOLVED: That Cabinet approves the termination of the Scowerdons, Weakland and Newstead (SWaN) Development Agreement:.

14.3

Reasons for Decision

14.3.1

The Development Agreement between SCC and Home Group to deliver new, mixed tenure housing on the estates is no longer fit for purpose, and any future development under the Agreement would not be financially beneficial for either party. A mutual decision to terminate the Development Agreement at No Fault would allow the Council to find alternative options for the redevelopment of the remaining land.

14.4

Alternatives Considered and Rejected

14.4.1

Continue with the Development Agreement and continue to hand land over in phases to Home Group for development: Future phases will not meet the Development Agreement’s key financial indicators and so will not be financially viable. Phases will not be handed over for development if they are not financially viable, so this option was rejected.

14.4.2

Terminate the Development Agreement at Home Group’s Fault: A failure to meet the key financial indicators (KFIs) for an individual phase is not specifically mentioned as a material breach of the warranties and obligations of Home Group under the terms of the Development Agreement. The Development Agreement sets out a procedure for addressing failure to meet the KFIs, which includes deferring phases and re-running the financial appraisal.  If the KFIs are still not met, and the parties cannot agree steps to preserve the KFIs, then the Development Agreement terminates as a No Fault Termination. This option was therefore rejected.

14.4.3

Allow the Development Agreement to ‘time out’: the Development Agreement will automatically terminate at No Fault in March 2018 (the Longstop Date). This option would mean that the Council could do nothing with the land until the Longstop Date is reached, so this option was rejected.