Otterpool Park Update: £18.9 million for land/property acquisitions

Folkestone & Hythe District Council Cabinet meeting on the 14th Nov will  recommend to full council that it borrows an additional £10 million (the annual interest cost of borrowing a further £10m will be about £250,000 in a full year) to enable the council to purchase land/property for the Otterpool Garden Town project and to progress the scheme to the point where development can commence.

On 18 July 2018 cabinet resolved to authorise the purchase or enter into options in respect of certain properties adjoining the A20 at Newingreen in order to facilitate the development of Otterpool Park Garden Town. This part of the Cabinet meeting was held behind closed doors – agenda items 19 & 20

Since then, further masterplanning work suggested acquisition of an additional property adjoining the A20 has become necessary to deliver the new road connection. The cost of this can be covered from within the existing approved £3.675 million budget. In accordance with the previous authorisation (minute 20.2 c) the Head of Strategic Development Projects (now the Chief Strategic Development Officer) after consulting the Leader has entered into negotiations to purchase the property.

At this point then the Council have spent £5.2 million on the land at Otterpool. £3.675 million for the options/land/property we wrote about in late September and now need a further £10 million to purchase further land/property, meaning thus far £18.875 million is the sum of money envisaged to progress the development. The majority of properties which have been or will be acquired, will not be needed by the council for 8 – 10 years, nevertheless it is considered that authority should be given for officers to acquire appropriate land and buildings.

         John Bunnett Corporate Director – Place and Commercial & Andy Jarrett, Chief Strategic Development Officer

The arguments in favour of securing further land now and granting delegated powers to acquire land can be summarised as follows: –

• The owners’ lives have been disrupted through the council’s plans and through no fault of their own; many of them have found the uncertainty upsetting and feel it has left them unable to plan their future. As stated above in some cases the properties will not be needed for 8 – 10 years, although the properties are not blighted in any statutory sense the council’s plans may make it more difficult for them to sell. It is a matter of fairness that the council should enable them to “get on with their lives”.

• Whilst the properties immediately essential for the development of the town have been identified already, acquisition of further properties will make the development easier, for example in relation to the proposed secondary school.

• Securing further land is contemplated in the initial collaboration agreement with Cozumel Estates Ltd.

• It will avoid having some properties surrounded by new development which will look incongruous.

• Delegated powers will enable speedier decisions to be made on the acquisition of properties that become available for purchase. It should be appreciated that the council will receive a rental income from the properties. It is unlikely this income will cover all the costs of borrowing and managing the properties however it will mean that some of these costs are offset.

• In the long run the costs should be neutral, as the value of the property will be retained and it can ultimately be re-sold if for any reason development did not take place (assuming purchase is at market rate).

The contrary arguments are:

• If the council acquires properties this will entail further borrowing.

• The rental income may not cover the borrowing costs albeit that some will be offset.

• There will be certain costs involved in managing the properties.

• Some works may need to be undertaken to put some of the properties in a condition where they can be rented out.

• The properties may not be needed for 8 – 10 years.

The Council will wish to obtain some return on the properties. Non – residential properties can be let out on agricultural or business tenancies. So far as the residential properties are concerned the advice the council has received is that it could let them out through either a company or offer non – secure tenancies itself.

The houses will be acquired under S227 Town and Country Planning Act 1990 (as amended) for the purposes of development and not for the provision of housing accommodation. Consequently the houses will be managed separately from the council’s social housing stock (which they will not form part of) and there will be no implications for the housing allocations policy. Non – secure tenancies are not subject to ‘Right to Buy’ legislation.

Masterplan for Otterpool Park

If the budget (the further £10 million) is authorised by the council it is suggested that authority to authorise the acquisition of individual plots be delegated to the Corporate Director – Place and Commercial John Bunnett (former Ashford Borough Council Chief Executive)  in consultation with the Leader of the Council Cllr David Monk, the Cabinet Member for Finance – Cllr Malcolm Dearden and the Cabinet Member Property & Environmental Health – Cllr Dick Pascoe prior to authorising any purchase a report will be produced for the decision taker setting out the financial consequences of any particular purchase.

The Shepwayvox Team – Dissent is NOT a Crime