Thursday, 8 May 2014

Victoria House Sold

Victoria House, that ugly (despite the wall paper) building welcoming visitors to Worcester Park from Sutton and Visitors to Sutton from Kingston and anywhere along the A3, has been sold to the Home Group.

A deal was formally agreed between the existing owners, Stonegate Homes and the Home Group last week. The good news is that the Home Group fully intends to go ahead with the current proposal, albeit with some minor internal alterations.

Stonegate Homes bought the site early in 2012 and set about organising plans for a new development on the site which the community broadly backed. In June last year the plans that had been developed in conjunction with the local community were approved by Sutton's Development Control Committee however a couple of months later the building was back on the market again leading to much speculation about why Stonegate Homes had put it up for sale again and whether they had ever intended to carry out the work, perhaps preferring instead to sell it on with planning permission, adding a great deal of value to the site - and profit to the sale. This depiction of events was never confirmed but was repeatedly hinted at. For example one local(ish) councillor wrote on her blog on 5th November last year:
"I can not help but feel, that whilst Sutton Council is doing its bit in marketing North Cheam, the real answer lies with Stonegate, the owners of Victoria House.  I and many other people just wish they would just get a move on, stop playing at 'Property Speculation'"
However there was an alternative version of events which also fits the known facts and was alluded to in the recent Sutton Guardian story about the building. Stonegate's land director James Fitzgerald was quoted here as saying:
"It was in doubt because the council was very hard to negotiate with on section 106 payments, there was a lot of internal fighting between the Liberal Democrats and the Conservatives, but it's on track now."
The blog has spoken to several people including Stephen Curwen, the director of Stonegate, and it seems that the council had added an addition section 106 payment to the deal after the planning approval was granted. This had been considered to be part of the main S106 payment but afterwards looks to have been redefined as an additional separate payment required from the developer as part of the planning approval agreement. For those (i.e. most people) who don't know what section 106 money is - it is basically money required to be paid by a developer to the local council to cover the costs of additional council services that will be required by users of the new development. The agreed amount forms part of the planning agreement. Now that you know what Section 106 money is, you can forget it again because it's all changing.

Mr Curwen who grew up in Stoneleigh and told the blog "Victoria House was a derelict site when I was a kid!" didn't wish to disclose how much extra money was being asked for but the blog understands it was not an insignificant sum. It was the investors who had decided not to continue with the project, forcing the site to be put up for sale again. However negotiations continued between Stonegate and the council and a figure has now been reached that has been agreed by both sides. Mr Curwen was keen to stress that all councillors he dealt with were helpful and all sides wanted the project to go ahead. He did also mention that Councillor Eric Allen was very positive and keen to help from the start.

Even though they no longer own the site, Stonegate will still be working with the Home Group on the project, so retaining a stake in the new development. They are looking to begin the work of demolition in August. Ladbrokes is staying put so the demolition will need to be done while keeping the Ladbrokes section of the building in tact.

The building itself has fallen into such bad disrepair that a window fell and smashed on the pavement without warning a few months ago narrowly missing passers-by. It will be good to see this work finally being done. Mind you with all the delays so far - I'll wait until I see the demolition actually begin before I open any bubbly white wine from a specific region in France. Although if they just leave it a bit longer it might just fall apart all by itself...

Councils and Development

It is my view that if someone is prepared to come along and pour millions of pounds of their own money into something that will greatly benefit the community and the local area, then they should be given the opportunity to make some profit from that investment to make it worth their while going to all the bother. The council shouldn't try to squeeze every last drop out of a developer, just assuming they can afford it.

Unfortunately this is not the first time Sutton Council seems to have scared off potential developers by insisting on too much from them:

In 2012 Sutherland House on Brighton Road just south of Sutton Station was similarly given planing permission but again onerous S106 conditions made the development financially unviable. Developers are now instead looking at permitted development rights to just turn it into residential flats - because this doesn't require Sutton Council to give planning permission (hence 'permitted' development). It is not the development which would have best served the community and certainly not what Sutton could have had if the council had been more reasonable.

Another one was the old Burger King site on the main road heading North out of Sutton towards Rosehill. This was bought by Travelodge as one of a number of sites to develop. But once again the conditions placed on development by the council, this time regarding the environmental conditions, left the site so low down the profitable pecking order that it hasn't been worth their while going ahead with the development - leaving just another derelict site on a Sutton high street.

Update (12th May 2014)

A few people have questioned some of the facts here and asked for more detail. Cllr Eric Allen has obliged with the following statement:
"At a meeting of Councillors and planning officers on 4th April we were advised that the Developers of Victoria House were in discussion with a social housing organisation to take over the site. The problems that the developer (Stonegate) sited for the delays in the development were the required seven affordable homes plus the payment of £390,000 in upfront charges (S106 money) on top of the £500,000+ they were obliged to spend on public realm projects. 
Stonegate wanted to either be removed from the obligation to provide the seven affordable homes (supplied at cost therefore no profit) or to have the S106 additional contribution removed. 
As this is a landmark site which currently blights the North Cheam cross roads I had no objection to the removal of the S106 money, and suggested we agree this on condition that the developers started the demolition of the building within 2 months. 
As Conservative councillor for Nonsuch, I have been fully supportive of the redevelopment and a strong advocate for renegotiating the charges imposed by the Liberal Democrat Council in order to kick start the redevelopment for the benefit of local people. It has been the Liberal Democrat imposition of almost £900,000 of financial obligation on the developer that made the project unprofitable and delayed the redevelopment. 
The commercial loss to the council in terms of Council tax is around £100,000 for every year the redevelopment is delayed."