Agenda item

That Cabinet approve the revised sale price of £XXXXXX for the land at Lowfield Lane, Balderton as detailed in the report, subject to confirmation from Nottinghamshire County Council on the Green Adoption at £XXXXXX; any adjustment in the offer in relation to the Green Adoption sum to be delegated to the Portfolio Holder for Strategy, Performance and Finance for decision following consultation with the Cabinet.

Reason for Decision:

In order to ensure that the Council secures the best consideration for the land which was previously purchased by the Council for residential redevelopment on the basis that it was both a largely allocated housing site and was entirely within the Newark Urban Area where the principle of residential development is acceptable.

Options Considered:

The Council could refuse the revised offer outright and request Arkwood to proceed to complete the sale on the original terms or seek to negotiate a higher sale value somewhere between the original and revised offers. Neither of these options are considered realistic, deliverable or in the Council’s interest. Arkwood has set out its position that it is entitled to terminate the contract for sale in the circumstances if the revised offer is not accepted; Officers consider this position to be justified as the viability of the development has been materially affected due to the factors set out in exempt Appendix A. The revised offer exceeds the independent valuations obtained and detailed at paragraph 2.6 above, therefore it is not considered necessary to seek to negotiate a higher sale value.

The Policy & Finance Committee report of 27 January 2022 explored the alternative option of selling the land on the open market; this option was rejected as it did not deliver the Council’s strategic aims of both housing delivery, and financial sustainability relative to the Council’s Medium Term Financial Plan provided by Arkwood’s involvement. In addition, as the Council’s wholly owned company, Arkwood does not seek as high a commercial return as other developers and is therefore able to deliver a more diverse mix of housing including lower value units which generate lower returns, but which are much needed in the community. The position on this alternative option has not changed, in particular with reference to the independent valuations referenced at paragraph 2.6 of this report. The Council’s Acquisitions and Disposals Policy allows for disposal to be negotiated with a single party such as Arkwood. There is also a risk that by going to the open market the Council could fail to secure a buyer at all if Arkwood withdraw interest.

The Policy & Finance Committee report of 29 June 2017 confirmed the land purchase based on use for strategic residential development, as most of the land was already allocated for that purpose. The proposal offers the best disposal value that can reasonably be obtained, together with associated benefits of delivering much needed housing especially considering new targets now being introduced by Government, and the Medium-Term Financial Plan benefits already set out in this report. There are no alternative uses that would offer a viable and comparable return which achieves Best Value to the Council as landowner given the constraints of the site.

The Chief Executive presented a report which sought to agree revised terms for the disposal of land at Lowfield Lane, Balderton, to Arkwood Developments. It was reported that in January 2022, the Policy & Finance Committee agreed to the exclusive disposal of land at Lowfield Lane, Balderton to Arkwood Developments Ltd, for the sum of £4.4m. Since January 2022, there had been a number of matters that had impacted on the scope and viability of the development. Give those matters, following the granting of planning permission on 11 November 2024, the Council received a revised offer letter from Arkwood Developments Ltd on 13 December 2024 which proposed a revied offer to purchase Lowfield lane.

The revised offer (attached as an appendix to the exempt report given it was commercially sensitive) was made as a result of a number of changes to the proposed scheme for the site through the planning process and wider market conditions which were outside of the company’s control. In order to demonstrate best value, the Council had commissioned two further valuations of the land which were based on the planning consent granted. These were included as appendices to the exempt report.

AGREED     (unanimously) that Cabinet approve the revised sale price of £XXXXXX for the land at Lowfield Lane, Balderton as detailed in the report, subject to confirmation from Nottinghamshire County Council on the Green Adoption at £XXXXXX; any adjustment in the offer in relation to the Green Adoption sum to be delegated to the Portfolio Holder for Strategy, Performance and Finance for decision following consultation with the Cabinet.

Reason for Decision:

In order to ensure that the Council secures the best consideration for the land which was previously purchased by the Council for residential redevelopment on the basis that it was both a largely allocated housing site and was entirely within the Newark Urban Area where the principle of residential development is acceptable.

Options Considered:

The Council could refuse the revised offer outright and request Arkwood to proceed to complete the sale on the original terms or seek to negotiate a higher sale value somewhere between the original and revised offers. Neither of these options are considered realistic, deliverable or in the Council’s interest. Arkwood has set out its position that it is entitled to terminate the contract for sale in the circumstances if the revised offer is not accepted; Officers consider this position to be justified as the viability of the development has been materially affected due to the factors set out in exempt Appendix A. The revised offer exceeds the independent valuations obtained and detailed at paragraph 2.6 above, therefore it is not considered necessary to seek to negotiate a higher sale value.

The Policy & Finance Committee report of 27 January 2022 explored the alternative option of selling the land on the open market; this option was rejected as it did not deliver the Council’s strategic aims of both housing delivery, and financial sustainability relative to the Council’s Medium Term Financial Plan provided by Arkwood’s involvement. In addition, as the Council’s wholly owned company, Arkwood does not seek as high a commercial return as other developers and is therefore able to deliver a more diverse mix of housing including lower value units which generate lower returns, but which are much needed in the community. The position on this alternative option has not changed, in particular with reference to the independent valuations referenced at paragraph 2.6 of this report. The Council’s Acquisitions and Disposals Policy allows for disposal to be negotiated with a single party such as Arkwood. There is also a risk that by going to the open market the Council could fail to secure a buyer at all if Arkwood withdraw interest.

The Policy & Finance Committee report of 29 June 2017 confirmed the land purchase based on use for strategic residential development, as most of the land was already allocated for that purpose. The proposal offers the best disposal value that can reasonably be obtained, together with associated benefits of delivering much needed housing especially considering new targets now being introduced by Government, and the Medium-Term Financial Plan benefits already set out in this report. There are no alternative uses that would offer a viable and comparable return which achieves Best Value to the Council as landowner given the constraints of the site.