Decision details

The Cabinet Member with the Economy Portfolio introduced the report of the Managing Director and the Director of Economic Growth and Neighbourhood Services (previously circulated) updating Members on the proposed delivery of new homes on Neasham Road and requesting that consideration be given to the establishment of a new Joint Venture Company (JVC) between Esh Homes Ltd and Darlington Borough Council to provide the infrastructure to open the site and then build and sell homes on parts of the site, as shown on the plan appended to the submitted report; the proposed disposal terms of land agreed between the Council and the new JVC; building 150 Council owned affordable homes on the site; determining the Sustainable Code Level which the dwellings are to be built to; and utilising £2.8m of Housing Infrastructure Funding (HIF) for strategic infrastructure at Neasham Road.

The submitted report stated that Esh Homes Limited had been appointed as a joint venture partner for residential development; the partnership had already proved to be a successful model for the accelerated delivery and provision of housing within the Borough; the acquisition and disposal of land at Neasham Road had been approved by Cabinet (Minutes C102/Jan/19 refers); planning permission had been granted in August 2020 for the development of 449 homes; and outlined the proposals for the three areas of the site.

RESOLVED - (a)  That the establishment of a new Joint Venture Company (JVC) to deliver, build and sell new homes at Neasham Road, be approved, and delegated authority be given to the Assistant Director Law and Governance, to finalise the negotiations for the establishment of the Joint Venture Company.

(b)  That £8.5m, from the Investment Fund be approved, to fund the JVC, financed by prudential borrowing subject to a legal charge in favour of the Council over the Land acquired by the JVC company together with a Guarantee from the Joint Venture partner in respect of 50 per cent of the loan sum.

(c)  That the sale of the land to the JVC, be approved, conditional upon the completion of the Joint Venture Agreement.

(d)  That the Assistant Director Law and Governance be authorised to execute the sale of the land, the entering into the joint venture and associated documents accordingly.

(e)  That the Assistant Director Resources, the Assistant Director Housing and Building Services and the Assistant Director Law and Governance, be authorised, to act as directors in the JVC as part of its Executive Board.

(f)  That upon completion of the Joint Venture agreement, a secured loan facility be entered into with the JVC as a secured loan simultaneous with the land transaction.

(g)  That Area A, as shown on the plan appended to the submitted report, be developed by the JVC and Area B, as shown on the plan appended to the submitted report, be allocated to the Council’s new build affordable housing scheme on the terms and conditions as outlined at Appendix 2a and Appendix 2b of the submitted report, and it be agreed that the Director of Economic Growth and Neighbourhood Services be granted Delegated Authority to finalise negotiations in line with the terms reported.

(h)  That delegated powers be granted to the Director of Economic Growth and Neighbourhood Services, to transfer the land at Area B to the Housing Revenue Account, in line with the terms as outlined at Appendix 3 of the submitted report, and provide 150 Council owned affordable homes at an estimated build cost of £24.13m for Sustainable Code 3 level plus financial contributions towards Section 106 costs, as detailed at Appendix 4 of the submitted report, and works undertaken by the JVC, or an additional cost of £14,000 per property for 150 dwellings for Code 4.

(i)  That the termination of agreements, relating to the former allotment land to secure vacant possession and negotiate compensation as appropriate, be approved.

(j)  That the funding required to facilitate the development and to fund the additional fees, development costs and annual maintenance costs in relation to ecology,on the terms and conditions as outlined in Appendices 2a, 2b and 3 of the submitted report, be released and the £2.8m Housing Infrastructure Funding, currently utilised on Stag House Farm, be used on strategic infrastructure at Neasham Road (the external funding and commercial envelope information relating to Neasham Road, as identified at Appendix 5 of the submitted report).

REASONS - (a)  To contribute to the our Covid recovery in line with the agreed Economic Strategy.

(b)  Accelerates the building of new homes for sale by the JVC and contributes to our much-needed social housing requirement.