SDC’s £2.5 million funding failure for Ship Street site – part 3

Shepway District Council’s (SDC) bid to the Marginal Viability Fund (MVF) for circa £2.5 million to “to cover the costs of abnormal works” on the 1.67 hectare (4.13 acres) Ship Street Site (pictured) in East Folkestone has been unsuccessful according to the Ministry of Housing, Communities & Local Housing. The announcement on the 1st Feb 2018 must have been a bitter blow for SDC’s desire to develop and build 85 homes on the site.

The officers and Cabinet members  responsible for the Report C-17-37  were Dr Susan Priest Corporate Director – Strategic Development (pictured below left) Cabinet Member Councillor David Monk (pictured below)and Councillor Alan Ewart-James (pictured below). The report was brought before a Special meeting of Cabinet on the 27th Sept 2017 and resolved by a vote of 9 – 0 in favour of allowing the  Head of Strategic Development Projects – Andy Jarrett (pictured below right) be authorised to complete and submit an application to the Housing Infrastructure Fund MVF.

   

The report also sought authority to acquire the former gasworks site in Ship Street, Folkestone (East Folkestone Ward) for the provision of 85 homes. The derelict site which is part owned by SGN Commercial Services Limited who bought their part of site on the 12/06/2008 for the sum of £2,878,305 and National Grid  Property Holdings Ltd who purchased their part of the site on the 1st Feb 2001 for £214,487 is at the centre of a residential area but has remained of no interest to private sector developers owing to the complexities for its re-development and associated costs. The site will therefore remain derelict for the foreseeable future unless the Council acts.

The scheme requires significant investment in re-mediating the land which would make the scheme unviable for the Council too. The report goes onto say:

The proposal is not one that will generate a substantial commercial return for the Council and there is a risk that there could be a degree of loss.

It took over two years to agree a proposition with the two land owners: a significant reason for the extended timescales was because the landowner changed their Agents mid-way through negotiations. The negotiated position is for the Council purchase of the site to be shared between the General Fund at 70% and Housing Revenue Account at 30%. The Council would accept full liability for environmental risk. A summary of the purchase cost and other terms appears in exempt Appendix A and are considered to be acceptable given the risks and proposed timetable for construction. Appendix A was a restricted document.

Now SDC have failed to secure funding from the MVF it is not known whether a purchase of the site will go ahead. The list of those council’s who secured funding from the MVF can be seen here.

The Shepwayvox Team