Otterpool Park Update: Places for People pull out of Otterpool deal

Otterpool Park, the controversial development where Folkestone & Hythe District Council, via its company, Otterpool Park LLP, wish to build up to 10,000 homes, has spent north of £75m; and not a sod of earth has been turned, or a single house built.

In late 2015 the Council purchased land from the Champney Brothers for £5m; and in Feb 2020 completed on the purchase Folkestone Race Course from Cozumel Estates Ltd, owned by the Reuben Brothers for £25m.

It has been known for quite a while, the Council, via its wholly owned company, Otterpool Park LLP, have been negotiating with Places for People to come on board the project as a joint venture partner. There was to be an announcement by the Council in December.  However we can now reveal that Places for People have pulled out of the deal, and they’ll be no announcement in December.

Places for People are the second joint venture partner to pull out. Previously there were detailed discussions with the Crown Estates with the aim of them becoming a strategic partner in the scheme. These discussions resulted in the Crown Estates deciding the scheme was unviable, according to the Leader of Folkestone & Hythe District Council, Cllr Jim Martin (pictured).

It was on the 4 April 2023 that the Council’s planning committee granted Outline Planning subject to the conditions set out in the Draft Planning Conditions and the securing of the obligations as set out in the s106 Draft Heads of Terms

The s106 agreement has NOT been signed although outline permission has been granted, nothing can go ahead until the s106 is signed. The evidence is pointing to the fact this will not happen anytime soon. 

There are those whose opinion is that the project is borderline viable at present. Least one forget the viability report made it clear the project would cost £2.7bn. However, this will have risen to north of £3bn. 

With no partner in place to push forward the development; the LLP will now need to find potential new partners. The Council via its company, will as we understand, begin searching for new partners in the new year.

Meanwhile, we know the the the Council is seeking to renegotiate the land agreements it has with the farmers, who own land around Otterpool. We understand Savills have been engaged to accomplish this, but it has not all been plain sailing.

On 14 February 2023 former Cllr Susan Carey speaking about Otterpool  said

“looking ahead to Otterpool, I wonder whether we should be looking to sell that project, so it is not similarly bogged down, in endless reviews, because we have our skills as Cllrs, and a Council, but we are not property developers, and maybe we need to actually take the profit that will come to us for the district to use for services for local people.

Perhaps it is time to listen to former Cllr Susan Carey, as the project has cost north of £75m.

The first loan facility to Otterpool Park LLP was for £119m, broken down as £44m for land acquisition and £75m for working capital. Then in April 2023 another £80m was agreed, broken down as £49m for accelerated land acquisitions and £31m for inflationary cost pressures on infrastructure provision. So more than 40% of the £199m loan facility has been spent and no infrastructure or house has been built.

Spending more money on the project which has already been deemed “unviable” by Crown Estates, does not bode well for Otterpool Park LLP finding another partner. Surely, throwing good money after bad cannot be considered to be value for money.

As always we’ll leave you to make up your own mind.

The Shepway Vox Team

Journalism for the People NOT the Powerful