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SALFORD DEVELOPERS EVADE £4MILLION PLANNING FEES DAY AFTER COUNCIL MAKES £22MILLION CUTS
 

Star date: 25th February 2016

SALFORD COUNCIL DISGRACE AS £4MILLION EVADED BY DEVELOPERS

The very next day after Salford City Council passed £22million worth of cuts to public services, applications for over one thousand properties have been posted on its website – with developers shown to be evading over £4million in planning fees and Section 106 payments.

At yesterday's Council cuts meeting Salford City Mayor spoke of "hard decisions" and his "heavy heart" in pushing through the cuts which will affect the city's most vulnerable people.

Full details here...


Gore Street Development Salford Gore Street Development Salford
click image to enlarge

Yesterday's meeting of Salford City Council was full of ruling Labour Party councillors and City Mayor, Ian Stewart, bleeding their hearts all over the Council chamber as they passed £22million worth of cuts to public services which will affect some of the city's most vulnerable people (for details see previous Salford Star article – click here)...

...Today, however, massive planning applications were posted on Salford Council's website for over one thousand properties in Ordsall, Chapel Street and MediaCityUK in which developers will evade over £4million in planning fees and Section 106 obligations – payments for things like extra public space, infrastructure and school places caused by new residents moving into the flats and houses.

To try and hide the massive scandal, Salford Council no longer publishes what developers should be paying to pockmark the city with huge concrete developments – it only publishes what they intend to pay, after `viability' issues have been taken into account. The get-out of `viability', that virtually every single developer in Salford is now using, basically means their profits won't be high enough if they had to pay the city what they are supposed to.

Given that the figures are now hidden, the Salford Star has estimated what each payment would be for each scheme, taken from official Salford Council figures in its well hidden Planning Obligations SPD document on `viability'.

The largest evasion of payments comes from Peel Holdings' application for 476 apartments and commercial space it's proposing to build in Phase 2 of its MediaCityUK development in two, twenty storey high blocks. This is classed as `premium value' land for which planning payments should be, according to Salford Star calculations, £2,299,080.

Peel Holdings, having done an `outline' deal with Salford City Council in 2014 for the site, will pay absolutely nothing.

Next up are plans by ECP Holdings Ltd for three huge blocks of 364 PRS (Private Rental Sector) apartments, eleven townhouses and commercial space, housed in three blocks ranging from 13 to 22 storeys high on a current car park site bounded by Gore Street, Trinity Way and Chapel Street

To build in this `mid/high value' area, the developer should be paying, according to Salford Star calculations, £1,811,362 – Salford Council is proposing to let ECP off with paying just £800,000 plus a `clawback' agreement should the developer admit to making bigger profits than it has told the planning officers...

"...as the applicant is not contributing the full amount considered by the City Council as necessary to mitigate the impacts of the development, a viability appraisal has been submitted in support of their position" states the Council planning report "The applicant's viability appraisal has been assessed by the City Council's surveying consultants.

"Despite some disagreement as to the market value of the site, it has been agreed that a contribution of £800,000 can be made to mitigate the impacts listed above without rendering the scheme unviable" it adds "It is considered that the above contribution is acceptable taking into account the public realm that the site does deliver, the removal of surface car parking and the development of a long under-utilised site and the provision of new homes."

Thus, the city losing over £1million is considered `acceptable' because a car park has been removed and there's a path going through the site?

Over in Ordsall, MMGG Properties is proposing a seven storey block stuffed with 142 apartments on the car park site of Gresham Mill on South Hall Street, near Ordsall Lane.

Salford Council officers report that "The development is likely to result in an increased use of the public realm, open space, education facilities and affordable housing in the local area" and that "Planning obligations have therefore been sought to mitigate against these impacts".

However, it adds, "An assessment of financial viability has established that the scheme cannot contribute to all the elements identified above, with a viable contribution of £55,000 agreed with the applicant".

According to Salford Star calculations, MMGG should be paying £685,902 – a loss to the city of over £630,000 – with no `clawback' agreement.

Meanwhile, on Liverpool Street, the old Skills Centre is to be redeveloped by KKI Land Ltd into five and six storey blocks containing one studio apartment, 23 one bedroom apartments, 65 two bedroom apartments and four three bedroom apartments; 93 dwellings in total.

In this `mid/high value' area, the developer should be paying £449,217, according to Salford Star calculations. But KKI Land Ltd will be paying nothing, except the unlikely possibility of a `clawback' - even though the planning officer's report states "the proposed development would require the provision of financial contributions towards open space, public realm improvements and transport infrastructure"...

It's the same get-out as all the other developers... "the submitted viability appraisal shows a developers profit to be significantly below the general profit levels normally expected (ranging between 15%-20% of GDV)" the officer states "This report has been independently reviewed on behalf of the Council by a third party. This review confirms the conclusion that should any contributions be made it would render the scheme unviable."

And finally, Whit Lane has been awaiting development for over ten years. Now Keepmoat has finally submitted plans for the first two phases of the development – 267 two, three and four bedroom houses, of which only 18 will be available as social rent properties (25 will be shared ownership).

As Whit Lane is in what is deemed a `low value' area, it doesn't need to provide any affordable housing, thanks to the Council's new policies. But as it is providing 20% `affordable' housing over the three phases, Keepmoat has been let off with over £1,500,000 in planning fees (which is roughly the cost of the `affordable' housing).

Even leaving the planning fees for Keepmoat out of the equation, a total of £4,390,561 will be lost to the city, according to Salford Star calculations, at just one planning meeting scheduled for next week. This can be added to over £19million in lost fees revealed previously (see The £19million Planning Scandal in the last print edition of the Salford Star – click here).

As Salford Council's councillors and City Mayor, Ian Stewart, bled their hearts over £22million cuts yesterday, residents may well be asking why they don't toughen up when it comes to developers turning the city into a cheap Monopoly board...


Main image shows proposed Gresham Mill development Ordsall

tom nolan wrote
at 7:34:58 AM on Sunday, February 28, 2016
another useless addition to our problems Rebecca long bailey...i have emailed and phoned on many occasions for her to explain all this .. just as bad as the last one ....no reply...
 
Name Albert Clarke wrote
at 12:54:19 PM on Saturday, February 27, 2016
Maybe taxpayers can take a leaf out of developers book and instead of paying the set council tax figure , instead offer what we feel we can afford
 
Name Albert Clarke wrote
at 12:54:15 PM on Saturday, February 27, 2016
re Tesco and probably other supermarkets as well who do not pay their suppliers invoices on time. We the public, load our shopping trolly's, get to the check out, put the goods on the belt wait for it all to be scanned then say "I will pay you in the next couple of months or so", when we are refused just walk out...
 
Michael J Felse wrote
at 12:54:10 PM on Saturday, February 27, 2016
Shirley and Alice make good points. Trafford succeed by giving the developers reasons to pay the fees. Saying how new builds benefit from already in place services, roads, schools. Salford fail because developers only see their cash going to waste in a crisis disaster ridden Salford Council whose elected spineless Councillors are unable to balance books. Honestly, if you was a million pound developer would you give cash to Salford Council.
 
Name Albert Clarke wrote
at 12:53:30 PM on Saturday, February 27, 2016
Does anyone know where we taxpayers are up to on getting our monies back off Salford Reds??, I am not anti Rugby but we need the monies to finance services. I think this club is into the taxpayer to the tune of £23m.
 
shirley jones wrote
at 8:38:41 AM on Saturday, February 27, 2016
An FOI request made last year asking Trafford Council how many fees had been waived over the last 3 years, the answer was none!!NONE whatsoever! So why, if Trafford Council do not waive any section 106 fees, then why are Salford Council waiving millions of pounds of them every year? Can we not complain to someone at a higher level? At least write and ask Jim Taylor, the Chief Executive of Salford Council why he is allowing this to happen?
 
Alice wrote
at 8:38:36 AM on Saturday, February 27, 2016
This is impressive research by Salford Star and surely someone in the Council should feel guilty! Assuming the Developers need to build these properties to keep themselves in business why doesn't the Council Planning Department advise the Council decision makers to refuse permission unless the fees and 106 money is paid. It is then a matter of waiting to see who gives in. To me it seems to be a battle between the big business developers and our representatives in the Council. Sadly our representatives aren't standing firm, even though they have a legitimate and social needs argument to back their case.
 
Andrew clark wrote
at 6:58:29 AM on Friday, February 26, 2016
Sorry to say it but this sounds corrupt someone's back pocketing wads of cash for themselves at the expense of others , same old story again and again . I feel sorry for my home town and the good people who still remain .
 
Brian f kirkham wrote
at 5:01:52 AM on Friday, February 26, 2016
Something comes to mind with the Developers in my home city. I'm sure they are very clever men and women, however here's the thing...when are these organisations going to actually create a property development that IS Viable? I find it funny they pick up brownfield sites (mostly on the cheap) leave them to blight the surrounding area and THEN build on them when a Big Project comes rolling into town. Add to that the pleading poverty due to the fact they want the pavements roads and lighting sorting out - but don't want to pay for it (That is what the Development fees are for guys) and it makes you wonder why council tax goes up whilst these businesses coin it in....
 
Michael J Felse wrote
at 12:30:58 AM on Friday, February 26, 2016
None of these properties will help anyone of the 14,000 people on our housing waiting list. Salford young have been robbed of 8,000 local job opportunities, meaning these builds are not for them. Local families and pensioners are not getting any of the new properties. These are the wrong properties for Salford's need. It is clear our Labour and Tory Councillors just do not understand basic housing need of local people. I will work with anyone that can rid us of the pathetic useless Salford Council.
 
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