Anyone who has been following the planning scandal in Salford, which has led to millionaire property developers avoiding around £20million of planning fees (see here), will have noted that the get-out in each application is the insertion of a `clawback' arrangement, whereby if profits reach a certain level, the Council gets a return.
The latest scandal is set to unfold on Thursday, when an application by Fortis Developments for 206 apartments in blocks up to eight storeys high on the Adelphi Street riverside will see planning fees, affordable housing provision and the `clawback' arrangement waived completely, unless councillors reject Council officer recommendations for approval.
Fortis should be paying £676,682 in planning obligations (Open space - £351,178; Public realm, infrastructure and heritage - £309,000; 2.5% admin charge - £16,504). The company should also be providing 20% affordable housing, or over forty homes, in line with Council policy. But, as usual, it's set to avoid all payments.
"The applicant has stated that the development would not be financially viable if affordable housing was required on site or if a commuted sum was provided in lieu of an on-site provision" states the planning officer's report "The applicant has submitted a viability assessment which has been reviewed by an independent surveyor. This review concludes that the scheme is not able to viably provide any affordable housing."
In relation to the £676,682 fees, the report adds: "The applicant has advised that the provision of the contributions outlined above would result in a developer's profit below that expected as an industry standard. The applicant's viability appraisal has been assessed by independent surveyors. The outcome of that assessment is that the developer return is below what is normally considered reasonable....In this instance the developer has confirmed that viability is such that any contribution would make the development unviable..."
While these avoidance techniques in applications are nothing new in the city. What makes this one unique and bonkers is that, as the report states, "more than 75% of the dwellings have been sold 'off plan'". In other words, 75% of the flats have sold but it's unviable? Some might say `unbelievable'!
The weird logic continues as the officer's report adds that, because `more than 75% of the dwellings have been sold off plan' a `clawback' agreement is not considered `appropriate'...
"The developer has explained that this model, where marketing costs are very high, but pre-sales fund the construction costs, allows this site to be developed" it states "The independent advice is that the costs set aside for decontamination and construction are reasonable and are more likely to increase than decrease..."
Therefore, the developer is set to pay nothing – even though three quarters of the flats have already been sold before planning permission has even been agreed. The planning lunacy at Salford Council marches on...
* See previous Salford Star article...
Adelphi Wharf flats being sold without planning permission - click here
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