Housing estate builder threatens to walk away over £807k contribution to community facilities
PUBLISHED: 16:01 17 November 2019
An £807,000 contribution towards community facilities from a new housing estate in Mistley could be significantly reduced - after the developer threatened to walk away from the scheme.
Rose Builders originally applied to build 70 new homes on land north of Stourview Close in the Essex village in November 2016.
However Tendring District Council (TDC) deferred a decision from its October planning committee after the firm raised concerns over the amount it would have to pay in Section 106 money, which requires developers to make contributions to local infrastructure such as schools and health services.
Rose Builders was initially told to pay £538,000 in Section 106 money, as well as give the council five homes for social housing.
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However after increasing the number of properties on the development by two, the Section 106 costs rose to £807,000.
Rose Builders said that it would be unable to build the now 72-home estate due to lack of profit.
But now officers at TDC say a "significant discount" is acceptable "given the importance of maintaining housing land supply".
Councillors are set to debate whether to approved the plans and the lower level of Section 106 money at £260,00 when they meet on Thursday, November 21.
The company said that was the maximum amount it could pay to earn a profit level of 16.67%, which is inside the government's advised guidelines of a 15-20% profit level.
A report prepared ahead of the meeting said: "Officers remain content that, given the importance of maintaining housing land supply and the special circumstances of this case where viability concerns have been proven and accepted by the council's independent experts, the grant of planning permission with a revised S106 agreement for a significantly reduced level of contribution to allow development to come forwards is acceptable in this case."