Agenda item

Appendix 2 to the report is exempt from publication as it contains commercially confidential information (exempt under paragraph 3, Part 1, Schedule 12A of the Local Government Act 1972 (as amended)).

Further to Minute 86 (23 January 2018), the Cabinet Member for Finance, Performance and Core Services presented a report on an approach from the housing developer, Hollybrook Limited, to work in partnership to deliver a 149-unit residential development along New Road, Dagenham, which would incorporate the Council-owned Transport House site and a large part of the Premier Inn car park site.

The Cabinet Member advised that the Transport House site was earmarked for development by the Council to provide circa 50 new homes.  The proposal put forward by Hollybrook Limited, who had acquired exclusive rights to redevelop the Premier Inn land, was to deliver a scheme across the two sites to provide a total of 149 new, mixed tenure homes which would be purchased by the Council at a fixed price on completion.  The Cabinet Member referred to the proposed terms of the Development Agreement with Hollybrook Limited, the options and risk analysis and the financial implications associated with the project, which were set out in an exempt appendix to the report, and confirmed that the projected outcomes were in line with the Council’s Investment and Acquisition Strategy.

Members spoke in support of the project and the wider regeneration proposals for the south of the Borough.  It was stressed, however, that the Government and the National Health Service must support the Council’s ambitious regeneration plans across the Borough by ensuring that the necessary infrastructure was in place to serve the new and existing communities.

Cabinet resolved to:

(i)  Approve the preferred option and tenure mix as set out in the report which would deliver 50% market rent and 50% affordable housing comprising 45 Affordable Rent homes let at up to 80% of market rent and 30 London Affordable Rent (LAR) homes;

(ii)  Approve in principle to enter into a Development Agreement with Hollybrook Developments to deliver 149 units for a total development cost of £44.5m for expected completion in 2024 subject to satisfactory due diligence;

(iii)  Approve in principle the borrowing of up to £37.7m within the General Fund to finance the entire development subject to satisfactory due diligence;

(iv)  Agree to allocate up to £3.8m restricted Right to Buy receipts, if required, to fund the construction and professional fees to support the financial viability of the affordable housing delivery;

(v)  Agree to allocate £3m GLA LAR grant funding, subject to a successful bid, to support the financial viability of the LAR tenure;

(vi)  Note that the scheme meets the Council’s Investment and Acquisition Strategy financial performance metrics;

(vii)  Agree to the use of an existing or the establishment of a Special Purpose Vehicle(s) as required within the Barking & Dagenham Reside structure to develop, own, let, sell and manage and maintain the homes in accordance with the funding terms in a loan agreement between the Council and Special Purpose Vehicle; and

(viii)  Delegate authority to the Managing Director, in consultation with the Strategic Director of Law and Governance, to agree and execute any agreements and contract documents to fully implement the project.