Meeting documents

1 THE ISSUE

1.1 The Council Executive is asked to affirm its intentions to progress the negotiations relating to economic regeneration developments.

1.2 In particular the Council Executive is asked to agree that Crest Nicholson become the Council's preferred development partner for part of the Bath Western Riverside development.

1.3 The land required for Bath Western Riverside development is largely owned by a number of third party owners. The Council first resolved in principle to use Compulsory Purchase Orders (CPO) powers for BWR in 2000. This paper asks the Executive to confirm that resolution in the light of developments since 2000, including changes in the regulatory framework pursuant to the 2004 Act.

1.4 Council Executive at its meeting on 11 of January 2006 considered reports by Terence O'Rourke and Ernst & Young regarding the Future for Bath vision and indicated its agreement that they could form the basis of further work to be undertaken to enable development of city centre sites to proceed according to the broad principles contained therein. These reports identified a number of development opportunities. This report also recommends that the Executive confirms its willingness to use CPO powers in order to realise these opportunities.

1.5 As further work is undertaken to develop visions and business plans for areas outside the city centre, the Council Executive is also asked to express its willingness to ask Council to use CPO powers to help to bring forward suitable developments.

2 RECOMMENDATION

2.1 The Council Executive accepts Crest Nicholson as preferred development partner for Bath Western Riverside (BWR) West, subject to agreement of Heads of Terms for a Development Agreement.

2.2 The Council Executive confirms its willingness to ask Council to use its statutory powers of compulsory acquisition should other means of land assembly prove unsuccessful, or unresolved title issues remain in the context of the revised criteria which were introduced by the Planning and Compulsory Purchase Act 2004. Use of these powers would be subject to a) the developer entering into an appropriate indemnity agreement for the costs of promoting and implementing compulsory purchase powers; and b) adoption by Council of a Special Planning Document for BWR.

2.3 The Council Executive delegates authority to the Major Projects Director and the Executive Member for Economic Development to obtain all necessary further information and to resolve any outstanding actions and due diligence necessary formally to introduce Crest Nicholson as preferred development partner.

2.4 The Council Executive expresses willingness to ask Council to use its statutory powers of compulsory acquisition should other means of land assembly prove unsuccessful or unresolved title issues remain in developing key sites throughout the local authority area in order to facilitate implementation of the Vision for Bath and other emerging development plans.

3 FINANCIAL IMPLICATIONS

3.1 Costs will be incurred during negotiations of agreements with Crest Nicholson, but these will be met within existing budgets.

3.2 In not proceeding with Crest Nicholson as a development partner the Council is likely to face significant costs, for example in dealing with a number of different and unco-ordinated planning applications.

3.3 No additional costs will be incurred as a result of recommendation 2.4.

4 THE REPORT

4.2 At its meeting on 6 April 2005 the Council Executive agreed to make Crest Nicholson a party to the Co-operation Agreement that governed the Council's relationship with Grosvenor and the South West Regional Development Agency (SWRDA) to bring forward a masterplan, Development Agreement and outline planning application for BWR.

4.2 Since July 2005 The Council, Crest Nicholson and SWRDA have been negotiating and working to bring forward a more detail masterplan, for BWR (West), sharing the costs equally. Work has reached the stage where the Council is willing to enter into a development agreement with Crest Nicholson as sole preferred development partner for certain sites within the western part of the original BWR Special Planning Guidance area. This agreement would help to ensure delivery of a comprehensible development overall.

4.3 Negotiations over Heads of Terms have been proceeding and are programmed to be complete by May 2006. Negotiation of the Development Agreement would be subject to agreement of those terms.

4.4 Further information from consultants and solicitors offering advice which protects the Council's position and relating to issues pertaining to the Development Agreement and the CPO are at the attached exempt appendices 3 & 4 and appendix 1 & 2.

5 RISK MANAGEMENT

5.1 A risk assessment related to the issue and recommendations has been undertaken, in compliance with the Council's decision making risk management guidance.

5.2 It is very unlikely that any claim for compensation based on a general resolution, in principle, to use compulsory purchase powers could be maintained against the Council. In any event, if such a claim could be made the Council has been exposed to that risk since its initial resolution in 2000. The first likely exposure to compensation claims would not occur until the Council had resolved to make a compulsory purchase order for identified land on the basis of a specific scheme or schemes.

5.3 The Council will not commit to resolve to use its CPO powers unless its own costs and liabilities in promoting and implementing the CPO, with any associated claims, are covered by the developer. Such a cost covering agreement is called an indemnity agreement. The attached letter, appendix 1 makes reference to this. There should be no financial risk to the Council resolving to use its powers of compulsory purchase in principle provided that this is subject to a suitable Indemnity Agreement being in place before the CPO process itself is commenced.

5.4 The position of financial implications is noted above. A further identifiable risk is that of the co-ordination of the BWR project with that of the Future of Bath Project. The BWR project is a major critical driver of the Future for Bath due its critical mass and the Future for Bath would be less likely to come forward without the drive and control of a major development partner on BWR (west).

5.5 A risk of not having a major development partner is that there would be no development delivery vehicle which would assemble the land and physically deliver the site in a comprehensive nature.

5.6 There are regular, in-depth reviews of all relevant risk registers in line with the Council's overall risk management strategies.

6 RATIONALE

6.1 With regard to BWR CPO, this decision would rationalise the Council's earlier decision with changes to powers set out in the Planning and Compensation Act 2004.

6.2 In terms of delivering other developments pursuant to the Vision for Bath and other emerging plans, early consultation and masterplanning work that has taken forward the spatial framework element of the vision has demonstrated the importance of land assembly to deliver key objectives. The Council's Executive's explicit willingness to ask Council to use CPO powers will assist the land assembly processes.

6.3 The rationale for entering the Development Agreement with Crest Nicholson is explained in 4.2 and 4.3 above.

7 OTHER OPTIONS CONSIDERED

7.1 No other options are considered relevant at this stage. Others will emerge as work proceeds.

8 CONSULTATION

8.1 The Council's legal advisers have advised on Bath Western Riverside (Berwin Leighton Paisner) and the Council's planning department have been consulted in the preparation of this report.

8.2 The Council's legal and property advisers have consulted with the Council's Major Project's team in the preparation of this report. Major Projects have consulted with Project Board, Directors Group and the Informal Executive prior to bringing forward this report for decision.

9 EXEMPTIONS UNDER SCHEDULE 12A OF THE LOCAL GOVERNMENT

ACT 1972

9.1 The following exemption is engaged in respect of these documents:

3. Information relating to the financial or business affairs of any particular

person (including the authority holding that information)

9.2 All exemptions under Schedule 12A of the Local Government Act 1972

are subject to the public interest test. We have assessed the public interest issues in this case, and have concluded that the public interest in withholding the information outweighs the public interest in disclosure at this time.