DD124 Appointment of financial viability consultants in association with the planning application for '115-129a Scrubs Lane'.

In June 2018, OPDC granted planning permission for: "Demolition of existing buildings and redevelopment of the site to provide a new building ranging from 6 storeys (25.1 metres above ground level) to 22 storeys (80.4 metres above ground level) in height over a new excavated basement, comprising 750sqm (GIA) of ground floor commercial floorspace (use class A1/A2/A3/B1) and 164 residential units (use class C3), with basement car parking and plant space, landscaping and associated works." at 115-129A Scrubs Land, London, NW10 6QU ('North Kensington Gate South').

BNP Paribas were appointed by OPDC to advise on the FVA submitted in support of the consented scheme. That scheme was a build-for-sale scheme and provided 30% affordable housing with a mix of shared ownership and London Living Rent units.

City & Docklands have indicated that they intend to submit a S73 application for minor material amendments to the extant consent, to increase the number of residential units from 164 to 203 through to the height and massing of the building. The applicant is also seeking a change in tenure from build-for-sale to build-to-rent. OPDC and City & Docklands had a pre-application meeting in October 2019 and an application is expected in February 2020.

London Plan policy 3.12 requires new developments to provide the maximum reasonable amount of affordable housing in residential developments, taking account of their individual circumstances including development viability, the availability of public subsidy, the implications of phased development including provisions for re-appraising the viability if schemes prior ti implementation ('contingent obligations'), and other scheme requirements. Draft London Plan policy H4 and draft OPDC Local Plan Policy H2 seek to deliver 50% of new homes as affordable housing.

The applicant has indicated that the affordable housing offer will not qualify for the 'fast-track route' of the threshold approach set out in draft Local Plan policy H6. It will therefore be required to follow the viability tested route by submitting a financial viability appraisal undertaken in accordance with the Mayor's Affordable Housing and Viability SPG.

The appointment of viability consultants is required to assist OPDC in undertaking a robust assessment of the FVA submitted in support of the application, in order to support OPDC in negotiating the maximum amount of affordable housing that the scheme can deliver.

The use of external consultants provides the expertise necessary to ensure that the decisions issued by OPDC are robust and are less susceptible to legal challenge. Legal challenges could result is delays to the delivery of development on this key site with implications for the delivery residential development along Scrubs Lane.

Consultants will suitable experience and qualifications are required to provide the necessary expertise and ensure OPDC meets its statutory duties with regard to the assessment and determination of the planning application. The expenditure on external consultants for this work is expected to be up to a maximum of £20,000. This cost will be funded by the applicant via a written undertaking which will be secured prior to the work commencing.

The key deliverable will be a report to OPDC commenting on all aspects of the applicant's FVA including the land value adopted, the appropriateness of construction and others costs adopted by the applicant, the appropriateness of residential and non-residential sales/rental values adopted by the applicant, and whether the target profit level sought is reasonable.

Under section 149 of the Equality Act 2010, in making these decisions "due regard" must be had to the need to eliminate unlawful discrimination, harassment and victimisation as well as to advance equality of opportunity and foster good relations between people who have a relevant protected characteristic and those who do not. Protected characteristics include age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation (and marriage or civil partnership status for the purpose of the duty to eliminate unlawful discrimination only).

Securing appropriate financial viability advice in relation to 115-129A Scrubs Lane planning application will contribute to the delivery of the regeneration objectives for Old Oak and Park Royal, as set out in the Opportunity Area Planning Framework and the draft OPDC Local Plan. Ensuring the development provides the maximum viable amount of affordable housing will increase the housing supply for people in housing need and on low incomes.

Key risk and issues

The contract will be managed in accordance with OPDC standard risk management procedures. If consultants are not appointed to assist with the work, there is a risk that OPDC's assessment of the applicant's FVA would not be sufficiently robust owing to the complexity involved in undertaking financial viability assessments and the range of factors that need to be considered. There is also a risk that maximum viable amount of affordable housing will not be secured.

Links to OPDC strategies and priorities

The delivery of the 115-129A Scrubs Lane site represents a critical objective of the OPDC draft Local Plan for Scrubs Lane which supports the delivery of a range of mixed used development along Scrubs Lane by contributing to the delivery of 1,2000 new jobs and a minimum of 2,600 new homes including 1,950 new homes within the first 0-10 years.

Impact assessment and consultations

The planning application will be subject to public consultation in accordance with the Town and Country Planning (Development Management Procedure Order) 2015.

OPDC consulted on Regulation 19(2) of the OPDC draft Local Plan in June-July 2018 before going through public examination between April and July 2019.

The expenditure requested in this decision will be met by the Planning Directorate in the first instance but the costs will be recovered in full from the applicant.