Agenda item

CO1 Redevelopment - Update


The Housing Development Manager introduced the report and stated that this was a collaborative report that proposed the demolition of the current CO1 building and subsequent redevelopment into 82 new homes. He stated that this report was being brought to the Committee early in the process, but further reports would be presented as the scheme progressed. He explained that the size of the project had been analysed and the current proposals were most financially viable and were the best fit in terms of planning requirements.

The Housing Development Manager commented that the existing use of CO1 as offices had now finished, and the proposed redevelopment would meet the Council’s aspirations in regards to place shaping. He added that the proposal would also contribute approximately £2.8million to the General Fund. He stated that the design would be compatible with the nearby Seabrooke Rise estate, and highlighted point 3.2 of the report which showed that the current building was nearing end of life and there was reduced demand for office space in the area. He stated that the team had looked at market sale for the site and private rented housing, but the team had found these options were not financially viable. The Housing Development Manager highlighted point 3.4 of the report and stated that the project was currently in the design development process, with consultants being appointed, and the same architects who designed the new Civic Offices building. He stated that they would be working to refine the design and cost plan, but would engage with residents through online consultations and in-person events before submitting a planning application.

The Housing Development Manager felt that this could be a challenging site due to proximity with the Network Rail line and the bridge, which could make demolition difficult, but stated that it was possible as much more challenging sites were regularly developed in London. He added that a detailed assessment of how the proposed site and the CO2 building would relate to each other would be undertaken, as well as a sustainable power strategy. He mentioned that the design process would be iterative, and could include some under-croft parking as well as a roof garden for residents. He drew the Committee’s attention to the table at 3.14 of the report which outlined the estimated costs involved, including £2.8million land cost and £21.6million construction cost. He explained that the team had considered all options for the site including sale of the land, private rented accommodation and TRL acquisition, but had found that the most financially viable option was through the HRA, as this provided more flexibility over a 30 year period. He highlighted 3.23 of the report which showed that there would be a small surplus from the project over this time period, but the units would be set within affordable housing levels and equivalent to other council properties. He summarised and stated that 3.29 of the report provided an indicative programme, which showed that construction would start in September 2023, if a planning application was agreed in summer 2022.

Councillor Fletcher thanked officers for providing a clear and concise report. He queried if officers would choose that site to build on, if they had the freedom. He also asked what safeguards would be implemented to ensure the project was delivered on budget. He felt that although the rent levels would be limited to below-market value, this might still be too expensive for some local residents, and queried how the team would ensure the new houses were utilised by local people. The Housing Development Manager replied that it was an iterative design process, but each Royal Institute of British Architects (RIBA) stage would be reviewed and cost plans would be controlled through consultants and the project management team as the scheme developed. He stated that there were risks associated with all developments, for example changes to the borrowing rate, but these costs would be tracked rigorously. The Assistant Director of Housing added that the new homes would be allocated using the housing allocation list. Councillor Fletcher stated that building regulations when CO1 had been built were not as stringent compared to modern day, and asked if this would increase the number of collateral challenges. The Housing Development Manager replied that there could be some challenges on the site due to building regulations, but the technical team had much experience with these types of challenges, due to their experience working on projects in London. Councillor Fletcher questioned if officers had decided on a rental price. The Housing Development Manager stated that the rent level would be decided based on the assumptions made within financial parameters. The Strategic Place Adviser added that there would be strict safeguards in place to ensure the project was managed on budget, and as this was an HRA scheme there would be high levels of demand and subsequent income. He stated that although there was still a level of risk this was lower than if the site went through the market sale process.

Councillor Redsell highlighted point 3.13 of the report and queried why the site would be challenging due to the proximity of the railway line. She felt that there were numerous housing projects in Grays, Stanford-le-Hope and East Tilbury that were close to railway lines, which had been completed successfully. She also questioned if the under-croft parking would be for residents only. The Housing Development Manager replied that if there was under-croft parking included in the scheme, this would be for residents only as the scheme would sit within its own footprint. Councillor Ononaji questioned if the Council had considered the cost of maintenance of the building over a 30 year period. The Housing Development Manager replied that the cost of maintenance was included in the financial viability assessment, which used local averages and accounted for the cost of inflation. He stated that although the team could not foresee interest rate changes, the team used accurate predictions to make a best estimate. The Strategic Place Adviser added that Thurrock used standard, national methodology to predict interest rates, and although these figures could not be exact, it utilised the best economic indicators available. Councillor Pearce questioned how long it would be until residents were living on the site. The Housing Development Manager replied that the indicative programme suggested building would start in September 2023 and would welcome residents in 2025.

The Chair stated that the Leader had recently conducted a BBC Essex interview during which he had spoken about the CO1 redevelopment proposals. She explained that the Leader had indicated the number of flats could increase to 94, which would be a 15% increase, or up to 100 flats, which would be a 20% increase. She asked if a 15% increase in the number of units would affect the financial viability of the proposal, as point 2.2 of the report suggested that the original number of 82 new flats was optimum. The Housing Development Manager replied that as the design process was iterative the number of homes could change as the design was developed. He stated that as the report had been deferred from the January Housing O&S meeting, the figures dated from then, but no detailed analysis had been carried out regarding an increase in the number of units. The Chair questioned if the report would come back to the Committee if additional houses were proposed for the site. She asked if this suggestion would affect the under-croft parking or proposed roof garden. The Housing Development Manager replied that the report would come back to the Committee before a contractor was procured, but detailed design work had not yet been undertaken. The Strategic Lead Finance added that if additional houses were agreed, this scenario would be run through the financial viability model. The Strategic Place Adviser added that the figure of 82 houses was an approximation, but a report had been submitted to Cabinet which outlined this figure. He explained that an increase in the number of houses might not significantly affect the financial viability of the scheme, but could affect the planning permissions.

Councillor Van Day asked what the smallest square footage for the houses would be, and asked if additional units would make the houses smaller. The Housing Development Manager replied that the houses had to meet the minimum space standards, which were set out by national government, and was approximately 50 square metres or 500 square feet for a one bedroom flat. The Chair questioned the build cost and felt that there could not be an overspend as there would only be a surplus of £1095 per flat per year if the project was brought in on budget. She queried if the cost of demolition had been included in the build cost and if an allowance had been made for inflation. The Housing Development Manager replied that the predicted costs included the cost of demolition, construction, contingencies, and legal fees. He added that RIBA produced cost predictions and undertook market research regarding inflation and all costs were based on their professional judgement.

The Chair asked about the timeline of the project and questioned if a report would be brought back to the Committee before the project went to Planning Committee. She felt the timescales would be tight as the next Housing O&S Committee wasn’t scheduled until summer. She also felt concerned regarding the financial viability of the project as it utilised HRA monies. She stated that there were thousands of people on the waiting list of a house, and felt that Thurrock Council should be building more homes for these people, but was worried about costs associated with the project. The Housing Development Manager explained that a report would be brought back to Committee before a contractor was procured. Councillor Fletcher felt that although the report had been well put together, he felt it was a risk and could risk HRA money. He added that he would like to see more clarification regarding the additional homes that had been suggested by the Leader during his radio interview. The Strategic Place Adviser stated that the report provided officers best current advice to both O&S and Cabinet, and stated that the detail contained within the report might change as the design process was iterative. He added that any building project could be a risk, but the project could be more flexible using HRA money as it would benefit local residents.

The Chair thanked officers for the report and the Committee agreed that a report on the project would be brought to Committee at the first meeting of the municipal year.

RESOLVED: That the Committee:

1. Commented on the proposed redevelopment of CO1 to be 100% funded through the HRA.

2. Noted that the scheme was to be directly delivered by the Council and the properties to be owned and managed by the Council through the HRA.

3. Noted that consultants are to be appointed to take the scheme through to planning submissions, subject to approval and consultation.

The Housing Development Manager and Strategic Place Adviser left the meeting at 8.01pm.

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