This application was for a Deed of Variation to the S106 Agreement in connection with the 2016 planning application for the conversion of the hotel into 7no. Apartments, two and three storey rear extension to hotel, erection of 21no. terraced dwellings with associated parking and landscaping at the Royal Victoria Hotel, St Marys Street/16 & 17 Water Lane, Newport, Shropshire and the demolition of 16 and 17 Water Lane.
It sought to remove an obligation to pay commuted sums in respect of education sum of £72,070 and a sum of £16,800 towards recreation. In support of their application, viability assessment information had been provided previously to confirm that bringing this site forward would not be viable and that the requirement to pay the sums should be removed.
Viability information had been submitted and had been assessed by the Council’s independent viability consultant, CBRE. Were the commuted sums to be paid, the return to the developer would not accord with that set out in the NPPF. The development had been hampered by constraints including the need to deal with the Grade Two listed building façade. It was therefore concluded that the provision of the commuted sums was not viable.
The Planning Officer referred to a late consultation response from Newport Town Council which made points including: that the Section 106 agreement was initiated at the time of the first application in 2016/17 and these costs were always going to part of the ongoing costs of the development and it was disingenuous to now reduce these very modest contributions which were for community benefit. Secondly, why should the developer be absolved from its responsibility bearing in mind the impact of the development together with the impact on local infrastructure, schools and recreation and thirdly, that this could set an unwelcome precedent for future development. The Town Council’s representation also referred to the setbacks suffered by this development and that it was a continuing eyesore and dangerous structure which could result in a possible fatality and the destruction of the façade. The Town Council stressed the need for urgent action, enforcement if necessary and consideration of compulsory purchase as an option. The Town Council made reference to a dangerous structure notice on one section of the façade and the lengthy process required should a compulsory purchase order be required after service of an urgent works notice. The Planning Officer confirmed Officers’ view that the benefits of the development coming forward would significantly and demonstrably outweigh harm arising out of the loss of the funding. The recommendation was put to members to approve the proposed variation of the s106 agreement.
During the debate, some Members raised concerns that the site was an eyesore and that everyone in Newport wanted it resolved, caution was needed to ensure that approval of this application did not open up opportunities for other developers to renege on an already-agreed S106 package, the building was vulnerable to falling down and that this needed to be guarded against, the developer was holding the Council to ransom to an extent and that a 21 dwelling development should have helped with viability and reducing the commuted sums would increase the viability. Other Members felt that completing the development would help open up the public right of way which ran through the site which was important to many residents of Newport.
The Planning Officers confirmed that removal of the commuted sums would increase the return to developer to bring it more into line with margin allowed for profit under the NPPF and put them in a better position to move forward with the development. Alternative legislation could be used to lead to a compulsory purchase order if required. In terms of setting a bad precedent, Officers confirmed that this would not happen because a full viability assessment would be required in respect of each individual application and each assessment would be independently scrutinised.
Upon being put to the vote it was, unanimously:-
RESOLVED – that all required commuted sums to the Deed of Variation to the S106 Agreement be approved.