Agenda item

The report proposes the establishment of a Limited Liability Partnership delivery vehicle for the delivery of housing development to further the Bath Quays regeneration.

Cllr Matt McCabe, Cabinet Member for Built Environment, Housing and Sustainable Development, introduced the item, moved the officer recommendation and made the following points:

·  There is an affordable housing crisis across B&NES, we have 6,000 people on the waiting list, 500 of whom, at any one time, are in crisis.

·  The market is unable to deliver affordable and social housing in the quantum we need.

·  Given this situation, we signed up to the Housing Mission Delivery Board’s cross-party Housing Accord.  In doing so, we committed the Council to take an innovative and collaborative approach to delivering more affordable housing. The aim is to find greater efficiencies in delivery that allow us far more opportunities to invest in, particularly, Social Homes.

·  Advice provided from Bishop Fleming concluded that the most efficient model for the Council and Aequus Group is to incorporate a Limited Liability Partnership (LLP) for the development of the Bath Quays North site.

·  The primary purpose in forming the proposed LLP is to:

o   regenerate the Site which has stalled following the demise of its development agreement with Legal & General;

o  increase housing supply; and

o  to promote the development of energy efficient homes.

·  Any profit created by the regeneration of the site, which is subsequently received by the Council should be used to either further regeneration activity in the Council area and/or provide additional subsidy for social housing on future sites.

Cllr Lucy Hodge seconded the motion and made the following points:

·  The Council is again stepping in to address a market failure and build new homes where possible on brownfield sites. Through use of our own building company, Aequus Construction Limited, the Council is focusing on developing two sites north and south of Bath Quays Links to deliver around 160 new homes – all EPC A rated.

·  An LLP is a business structure which in this case will create a separate legal entity around the development. This then sits outside the Council to mitigate risk and associated costs. The sort of risks we are thinking about are typical to any city construction site, for example increasing construction costs (due to delay or materials inflation), archaeological discoveries, and occasionally unexploded munitions. There is a cost implication to setting up an LLP which is justified here by the scale of the development.

·  The LLP will allow these two developments to be brought forward to deliver about 160 new energy efficient homes in the city centre, helping to regenerate the area whilst mitigating any risk to the Council.  It also reduces the Council’s tax liability which will enable continued investment in the provision of social housing on future sites.

Cllr Joel Hirst stated that there has been a market failure to provide affordable housing, especially for young people.  The Council has a responsibility to innovate to provide new homes.

RESOLVED (unanimously):

(1)  To agree to the establishment of a Limited Liability Partnership (LLP) between the Council and the Group.

(2)  To approve the proposed membership agreement of the LLP set out in Attachment 1 of the report.

(3)  To delegate to the Director of Capital & Housing Delivery the authority to take all steps necessary to form the Limited Liability Partnership for the regeneration of the Bath Quays North plots 6 & 7 and Bath Quays south (collectively referred subsequently as the Site) in the proportions provided for in attachment 1 of the report.

(4)  To agree to loan the LLP the Site development costs.

(5)  To agree in principle to the use of the existing Aequus Development Loan Facility and the Aequus Working Capital Facility by the LLP.

(6)  To delegate to the Director of Capital & Housing Delivery in consultation with the Leader, Cabinet Member for Resources and S151 Officer authority to transfer the Site to the LLP.

(7)  To delegate to the Director of Finance (S.151 Officer) in consultation with the Executive Director of Sustainable Communities, the power to approve the Full Business Case to develop the Site and enter into a loan agreement with and take security for the loan from the LLP.