MAIDSTONE BOROUGH COUNCIL
RECORD OF DECISION OF THE EXECUTIVE
Decision Made: 18 April 2023
Heather House and Royal British Legion site
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Issue for Decision
In 2021, the Policy & Resources Committee approved the Council pursuing a comprehensive redevelopment of the site (including Heather House and the Pavilion Building). This has led to a successful planning application for a new community centre on the Heather House site and a new-build residential scheme of 11 dwellings on the Pavilion Building site. To help finance the new community centre, Officers are seeking approval for a CIL Community Contribution of £956,420. The scheme is included in the capital programme, approval is needed for the works cost and to appoint the contractor to deliver the scheme, as per the planning application, and to proceed with a tender exercise to procure a management provider for the proposed new community centre.
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Decision Made
RESOLVED: That
1. The works costs for Heather House and the Pavilion building sites be approved, in accordance with the approved planning application. 2. The Head of Mid Kent Legal Services, in consultation with the Lead Member, be authorised to negotiate and complete all necessary deeds and agreements arising from or ancillary to the application for planning permission. 3. The Director of Finance, Resources and Business Improvement, be given delegated authority, to appoint a contractor to carry out the necessary building works for the community centre and residential units; and 4. The Director of Finance, Resources and Business Improvement be given delegated authority, in consultation with the Lead Members for Leisure and Arts and Communities and Public Engagement, to approve the tender exercise for the procurement and appointment of an operator of the new community centre.
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Reasons for Decision
Heather House is the only community facility still owned and directly managed by the Council. It is located on Bicknor Road backing onto the Parkwood Recreation Ground, providing facilities to enable indoor sports and leisure activities. It is currently only used by Maidstone Boxing Club. Adjacent is the Pavilion Building, currently on a short short-term lease to the Weavering Warriors Rugby Club, that can be ended at any time, by either party, on giving two months’ notice.
Planning permission has been agreed for a new community centre on the Heather House site, and a new-build residential scheme of 11 houses on the Pavilion Building site. Comprising of 4 First Homes and 7 private rented houses, giving the best financial return. Whilst the initial approval is for 7 x private rented houses, Officers will use best endeavours to secure grant from Homes England in due course, at a level that would allow the delivery of those homes for Affordable Rent.
First Homes are discounted market sale housing, meeting the definition of ‘affordable housing’. These units must be discounted by a minimum of 30% against the market value. After the discount the First Sale price must be no higher that £250,000. First Homes are the government’s preferred discounted tenure and should account for at least 25% of all affording housing delivered.
The proposal for the Pavilion Building site is a mixed tenure scheme of 11 houses (7 for private market rent and 4 for First Home). The following table shows the schedule of new accommodation:
The Scheme
Full scheme information is detailed within the Design and Access Statement that was submitted with the Planning Application.
This project will significantly improve the image, visual appearance and public perception of the community centre and contribute towards the regeneration of the area. This scheme will see the delivery of much needed new, high-quality housing and a new modern multi-purpose community facility within the existing footprint of the Heather House & Pavilion sites.
The new 580m2 community centre, is designed to accord with the latest accessibility and energy efficiency standards, resulting in lower long-term maintenance and running costs. The facility will appeal to many clubs and organisations, providing opportunity for local community involvement of all ages. It will include one court sports/community social use hall, the height of which will be capable of accommodating badminton, a kitchen, storage, bar and social lounge area, as well as further ancillary areas that will provide for field-based sports. The community centre has been designed in accordance with guidance produced by Sports England for community halls, together with Rugby Football Union design guide for changing rooms and clubhouses. The scheme will increase more usable open space provision by repositioning the new community centre further away from the area of ancient woodland on the southern/western boundary. Establishing the required buffer zone of 15m and giving back areas of existing small underused open space taken up on the Pavilion Building development site area.
The housing is within close proximity of local facilities and transport services. The development will contribute to the surrounding built environment. The high-quality family homes all meet Nationally Described Space Standards, providing well-designed active frontage with plenty of green spaces, private parking, and rear gardens. Natural daylight has been a key consideration, which has informed the orientation of the homes, position of the gardens and location of glazing. An energy consultant was appointed to provide guidance on achieving the necessary thermal requirements and energy efficiency measures. The residential scheme will benefit from 4 photovoltaic panels per home, these will provide renewable energy from sunlight.
Financial Commitments
The financial summaries for both sites are shown at Exempt Appendix 1 & 2. There is a negative NPV of -£756,223 on the new community centre, however, a high NPV of £1,412,927 on the residential element of the scheme. The amalgamated scheme for both the community centre and residential site is positive, based on a private market rent and First Homes sale. This demonstrates a financially viable scheme and meets our minimum financial criteria.
The procurement exercise has provided a scheme cost for the entire development, details of the costs from the preferred contractor are detailed in the exempt appendix.
The Council have submitted a successful bid for Land Release Funding, for the proposed redevelopment of the entire site totalling £100,000. This will go towards the demolition costs of both buildings. The Land Release Fund is a cross-government initiative between the Ministry of Housing, Communities and Local Government and One Public Estate which is delivered in partnership by the Local Government Association and the Cabinet Office.
The financial model assumes a successful CIL bid of £956,420; that won’t be determined until the summer. In the event that this is unsuccessful, monies from the £5m Infrastructure funding in the recently adopted capital program, will be utilised to provide subsidy to the community centre.
The Policy & Resources Committee report from February 2021 (attached background paper) detailed that income from the new housing, could provide cross-subsidy for the new community centre. However, this will no longer be the case as the profitability of market sale has been eroded by build cost inflation. Meaning that private sale is no longer the most attractive tenure for the non-First Homes units.
Contract Procurement
A procurement exercise has been undertaken to source a single contractor, to enable maximum efficiency to be gained from running the community centre and residential builds concurrently.
The tender documentation was issued via the Kent Business Portal as an open tender invitation on 31 October 2023. Completed tender documentation was returned by three contractors. The final analysis of the tender return was carried out by FFT in February.
Based on the tender submission, Officers have a preferred contractor they believe is the most competitive and advantageous of the three tenders received. The preferred contractor submitted a build programme estimating start on site in November 2023, completion of the new community centre in November 2024 and houses in June 2025.
A tender exercise to procure an operator for the community centre is the next step. Officers are looking to grant a 25-year lease (contracted out of the landlord and tenant act 1954) on a fully repairing and insuring basis, to an organisation to operate and manage the facility, for the benefit of the local community. The Council would expect that the facility would be available to hire at reasonable rates to the wider community, for example private parties through to community activity groups.
Officers intend to proceed via a formal tender approach, contacting potential interested parties to inform them of the tender exercise and encouraging them to make an application. The tender exercise would seek interest from suitably experienced organisations who can manage and maintain the building in a way that will benefit the whole community. Officers will require that the tender bids show detailed information regarding the day-to-day operation of the building, planned activities / use and included details of opening hours. The submissions will need to show an understanding of compliance with Health and Safety and all other statutory regulations. It is anticipated that the tender pack will be published on the Kent Business Portal in the summer of 2023, with an estimated period of eight weeks from tender start to the lease being awarded.
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Alternatives considered and why rejected
Option 1: the preferred option, to appoint a contractor to build out the entire scheme, comprising of the new community centre and 11 houses, as per the planning application and to procure a managing agent for the operation of the community facility.
Option 2: Do nothing, leave Heather House community centre and the Pavilion building site to slowly decay. Whilst keeping the Rugby club on a short-term lease. This is not recommended as there would continue to be uncertainty as to the future of the building and site.
Option 3: Demolish both Heather House and the Pavilion building. The potential loss of a community centre could impose a significant and negative impact on the existing users and surrounding neighbourhood and lose the opportunity to bring about social change and improve the quality of life in the local area.
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Background Papers
Heather House and Pavilion building, Policy and Resources Committee February 2021. (please note that this report is restricted).
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I have read and approved the above decision for the reasons (including possible alternative options rejected) as set out above.
Signed:_______ Leader of the Council.
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Full details of both the report for the decision taken above and any consideration by the relevant Policy Advisory Committee can be found at the following area of the website
Call-In: Should you be concerned about this decision and wish to call it in, please submit a call-in form signed by any three Members to the Proper Officer by: 5pm on Thursday 27 April 2023. |